Have you ever heard of the term arbitration? For crypto asset traders, this term may already be familiar. However, how to conduct the arbitration in Indodax? To find out, read in full the following review.

Based on the definition in the Big Indonesian Dictionary (KBBI), arbitrage is the simultaneous buying and selling of the same goods in two or more markets to profit from the price difference.

Meanwhile, in practice, arbitrage is a method or method used by traders to profit from the price difference between digital assets in two different markets.

Why did that happen? This is because digital assets have different prices in each market. So that you as a trader can do arbitrage properly, let’s see the explanation below.

Arbitration at a glance

Before discussing how to conduct arbitration on Indodax, it is essential that you first know what arbitration is. Arbitrage is a trading strategy aiming to take advantage of a price imbalance in two different markets or markets.

In this case, the party conducting the arbitration is referred to as the “arbitrageur” or “arbitrator.” These arbitrageurs also have many challenges in the arbitration process. Among them is that there will be price differences, and they are also required to have the ability to trade assets quickly.

Why must it be fast? Of course, other arbitrators can monitor price differences or spread quickly so that arbitrage opportunities may be taken promptly.

An arbitrageur will usually arbitrage by buying this digital asset on a market that sells it at a low price. In this regard, arbitrators generally have several accounts on several different exchanges.

Types and Examples of Arbitration

The types of arbitration are generally divided into two, namely Exchange Arbitrage and Triangular Arbitrage. Get acquainted with these two types of arbitration before you learn how to conduct an arbitration at Indodax.

Exchange Arbitrage or Exchange Arbitrage

Exchange arbitrage occurs when an arbitrageur purchases the same crypto asset on one exchange and then sells it elsewhere. In this case, the arbitrator will take advantage of the rapid changes in crypto prices. This gap or difference in crypto prices—which also makes prices on various exchanges not always the same at the same time—is then used by traders to buy and sell their crypto assets for profit.

For example, when the price of BTC on exchange A is IDR 130,000,000, the cost of BTC on Indodax is IDR 131,000,000. In this case, an arbitrator can buy 1 BTC on exchange A, then sell 1 BTC on Indodax for a profit of IDR 1,000,000—before the transaction fee.

Triangular Arbitrage or Triangular Arbitration

In this second type of arbitrage, traders usually find a price difference between as many as three crypto assets. Then, they also exchange it with each other in a triangle or triangular. As for this one type, it usually seeks to take advantage of price differences across currencies.

Suppose a trader starts with BTC, then uses it to make ETH purchases. Then, the ETH is used to buy BNB. Next, he will sell this BNB to get more BTC from his initial capital.

How to Arbitrate at Indodax

Want to get more profit immediately? Check out the arbitration guide on Indodax below.

• Set Up Two Accounts

In the first step, you must set up as many as two accounts on two different platforms. In this case, you can transfer the balance to your account.

However, in truth, you can also transfer balances with different account owners. That way, you can also send money to a friend’s account.

You can register at the following link if you don’t have an Indodax account yet.

Then, you need to set up an account on a different exchange—no need to worry because you can choose trusted exchanges abroad, which are very large in number.

• Send money

At this stage, you need to enter a balance of a certain amount. Then, on the platform, you choose wallet or credit. Then, copy and paste the wallet address of your destination platform.

Here, you have to listen to the various instructions. Then, you send the balance with the nominal that is considered sufficient. The goal is that the loss will be smaller in the event of a delivery failure due to other risks.

• Check Transfer Status

Everything is transparent or promotes transparency in blockchain and cryptocurrency systems. That way, you can also check the status of the shipment.

You can use several websites to check the status of crypto shipments. Blockchain.com, for one. Now, you need to copy and paste the transfer address into the search engine on that website, and your transfer status will be shown there.

• Receive Balance

After you receive several confirmations, your balance has now been sent. You can also trade or exchange your money from different platforms or accounts.

Pay Attention to This During Arbitration

How do you know how to do arbitration at Indodax? In addition to generating abundant cash, this crypto arbitrage can actually make it easier for you to send money for transactions. However, of course, caution is still needed when conducting arbitration.

The things you need to pay attention to is the price difference between the two exchange platforms. The reason is, you are indeed looking for profit from the difference in prices in the two markets.

In addition, you also need to pay attention to the arbitration policy stated on the platform. You in this case need to pay attention to the policy and do not ignore it.

Here are also some other important things you need to pay attention to when arbitration.

• Shipping costs

Of course, there will be shipping fees on crypto assets and each asset has its own policy, one of which is a discount. For example, sending USDT will incur a 5 USDT discount. Likewise with other assets.

Therefore, it is important for you to pay attention to the cost of the discount so that you do not lose because it turns out that the discount is greater than the difference in price or profit.

• Delivery time

In the crypto asset policy on the exchange, you also have to pay attention to the delivery time. The reason is, there are differences in delivery times for each crypto asset, both fast and long.

Therefore, you must know that the delivery time must be fast because if it is too long, the price of the crypto asset will actually drop and it will only make you lose money.