Crypto asset arbitrage can make you a profit. This method can also make it easier for you to send money for transactions. However, you need to be careful when arbitrating.
In the world of crypto-asset trading, arbitrage is a method of sending crypto-asset balances from one platform to another. This method is used in transfers with the same type of crypto asset.
So, the arbitrage method, or so-called arbit is a method of moving from one platform to another. In terms of arbitration, remittances are called withdrawals (WD). While the receipt is called a deposit (Depo).
This method is commonly used by traders to find the difference in price or exchange rate between different platforms. For example, comparing a crypto asset price, such as Bitcoin or Tether (USDT) on Indodax and other platforms.
However, there are several drawbacks to arbitration. You need to pay attention to the points below so that you can optimally reduce risk in arbitrage.
Before that, first consider how to deposit or withdraw below:
How to Arbitrage
- Prepare Two Accounts
First, what you need to set up are two accounts on two different platforms. You can transfer the balance to your own account. Actually, you can also transfer balances with different account holders. So, you can also send money to your friend’s account.
If you don’t have an Indodax account, you can register here.
After that, you prepare an account on another exchange. There are many reliable exchanges overseas. You just have to choose.
- Send The Crypto
You need to enter a balance. Then, on the platform select wallet or balance. After that, copy and paste the wallet address of your destination platform.
You have to pay attention to the instructions. Send a balance with a nominal that you think is sufficient. So that later losses can be smaller when there is a delivery failure and other risks.
- Check The Transfer Status
In the blockchain and cryptocurrency systems, everything is transparent. You can check the delivery status. There are many websites that can check the status of crypto submissions. For example Blockchain.com.
Copy and paste the transfer address into the search engine on the website. There will be shown your transfer status.
- Receive The Balance
After receiving a number of confirmations. Your balance has been sent. You can trade or exchange your money from different platforms or accounts.
Beware of This
Trading using the arbitrary method by finding price differences is one of the methods often used by traders. It’s just that you need to observe the price difference carefully.
The arbitration policy is usually also listed on the platform. Don’t let you ignore the policy.
Not only that, below are other things you need to pay attention to if you are trading using the arbitrage method:
- Transfer fee
Transferring crypto assets also costs money. Each crypto asset has a different policy. Usually a cut. For example, sending USDT is subject to a 5 USDT discount. Likewise with other crypto assets, the discount varies.
So, you have to pay attention to the cost of this discount. Do not let the discount be greater than the difference in price or profit. Later, in fact you don’t even get profit or you can lose.
- Transfer Timeline
You should also look at the policies for each crypto asset regarding the delivery time. Each crypto asset has a different delivery time. Some are fast and some are old.
Well, don’t let the delivery take a long time. Because later, if it’s been too long, the crypto asset will actually drop in price. So, you just can’t profit or you can lose.
You Must Have Trading Plan
Then, what about when you have a loss?
You need to make a plan before trading. Make sure you put together a trading plan. If you can’t use the arbitrage method, you can use another method.
So, make sure that you have a plan before trading. Make sure your profit planning. Make sure you also use cut loss management when prices fall so that your losses don’t increase.