Lessons learnt While Arbitrage Trading

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Lately I have been focusing on different means to earn money, and someone talked about arbitrage trading and how you could make a lot of money from it. I won’t lie, it’s possible, I have been lucky some few times and I have been unlucky some few times. But either way, I learnt my lessons, so I am putting it out there for anyone so they learn from me.
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One thing I have come to realize is that, in arbitrage trading, lots of maths needs to be done so as not to make mistakes, if you get your calculations wrong, you will end up losing more than you are making. So you have to always do the maths, to know if it’s worth trading. If you are arbitrage trading on a DEX market for instance, where you have to select a price order to buy or sell, some times the tokens are usually paired with the DEX market place native token, so you have to be careful to use the best exchange with the best price.

This way you can get maximum great profit, after doing that, you also need to look out for the transaction fees, what rate are the transaction fees so you don’t go paying more than you are making. Most times the profit made from arbitrage trading is usually small, but the good news is that, you can make the transaction as many times as possible, as long as you are accumulating those 0.75% - 1% interest after trading. You are practically just buying from one source and selling to another at a higher price.

Some platforms charge 2% transaction fee, some charge 1%, some charge lesser while some don’t charge in % but have a fixed charge fee regardless of how much you are transferring, this is something you have to consider before making those trades, so you don’t end up making 0.6% profit and spending 1% in transaction fees. If you are making 3% and you are spending 1% in transaction fees, that will bring you to 2% net profit. That is okay, if you repeat this process for as long as you can, then you are good to go.

A recap, don’t forget to do your maths before trading, don’t forget to compare transaction fees and don’t forget to be patient and careful while doing it, because it might get overwhelming sometimes, so you don’t end up making mistakes somewhere.

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11 comments
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I have done it on hive engine a good few times when i can see a gap in token price.

It's a handy way to make some profits if its done right.

There was a time when land plots were selling at 400 hive and the buy market wa set at 300 hive.

It was easy to set a couple of plots at either side of the orders and buy for 310 and sell for 390.

Make 80 hive every time and reset your orders.
Only if the ap is there to be had.

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Yeah, it can be very interesting to do, did some with BNB some few days ago.

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There is a danger of being left holding an asset that cannot be sold at the same price). But you know this yourself...
!ALIVE

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The best part of this for me is that it was between two assets that i wont to hold long term. Hive and land plots so i didn't mind which i ended up with when the markets moved.

My only goal was to multiply them for free using the markets and have more to hold.

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Several times, I did the math with the recent market prices and see the profit. However, when I made the trade, the market prices were already changed and I got a loss as the result.
So, please beware of the market price when you calculate and when you trade for the best profit :)

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yeah experience that too sometimes, especially when transfer time gets too long

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