I already told you about the best cryptocurrency trading bots. In this ranking I place in the first position Cryptohopper , considering it as one of the best – if not the best – trade robots on the market. This is still my opinion – and that of many people – until today. ????
That said, Cryptohopper has released a new type of bone that I think will interest you enormously. This is the referee bone.
What is an arbitration bid? In fact, it is a bot with which you can buy cheaper cryptos on one platform and sell them more expensive on another platform.
Arbitration is a technique that is widely used by holders and in different cryptocurrencies.
Many of you have asked me how I have succeeded in making a profit through automatic trading (and therefore through bots). I plan to make a self-study video soon, but in the meantime I think a self-study article is just as good. I’m also going to talk to you specifically about the cryptohopper arbitration bot.
So today we will see how we can easily and step by step configure your arbitration bid.
You can like that, start very quickly to generate a profit thanks to your arbitration bid.
To fully understand arbitration and to understand what an arbitration robot is capable of, it is necessary to first explain the minor errors in the market. These “loopholes” constitute the price differences for a specific asset between the different market places.
➡️ Bringing back to the crypto-sphere can translate into buying a cryptocurrency in an exchange such as Binance for example, and selling at a higher price on the stock exchange Cracking. In this way one can profit from the price differences between the different market places.
Although this is a common practice, you should bear in mind that this is not the only way for a trader to make substantial arbitrage transactions.
There is another way to implement this trading strategy, it is called triangular or intra-trade arbitrage. This practice means that three different cryptos are purchased to take advantage of market failures on the same stock market. If it is still unclear, don’t worry, we will explain this phenomenon in more detail in the section below.
The different types of arbitration bone
As explained in the previous sections, there are two types of trading strategies for arbitrage that a tenderer can use: inter- and intra-trade arbitrage. Let’s see exactly what it consists of:
???? Intra-exchange (or foreign exchange arbitrage).
Arbitration between different stock exchanges is certainly the best known and most intuitive trading method. You must be aware that the prices displayed for cryptocurrencies differ from one exchange platform to another. It is this price difference that traders use. It simply consists of buying a cheaper crypto on an x platform and selling it more expensive on another platform.
Arbitration between different trading platforms is a trading method that has proven to be incredibly effective in the cryptomarket. That said, it can be time consuming to do it manually. That is why the use of a bone can be so useful. You can multiply your winnings automatically, without doing the research and without having to stay behind your screen. Yes, yes, that is also the reason why bots are bots. No wonder.
???? The Inter-trade arbitration bot (or triangular arbitration).
So far we have seen how we can benefit from the fact that the same prices are not displayed from one stock market to another. Now let’s see how we can arbitrate on one platform.
Keep in mind that this is also a common practice. With this technique, a third crypto is used as a bridge between the two cryptos that you want to buy / sell.
For example, your arbitration bid finds an arbitration option between the BTC and the ADA and will have found it through a third crypto.
To take an example, let’s say we can sell BTC for ADA for a value of 0.015 BTC (notional value for the example only). We also see that we can also buy ADA for cheaper XRP, for example at 0.012 BTC.
So this gives as a diagram:
1 —> The bot buys XRP with BTC
2 —> Then buy the bot ADA with XRP
3 —> Finally, the bot will sell ADA at BTC.
Ultimately, your bitcoin wallet will just get bigger with this exchange. Imagine performing the operation dozens of times a day. Also keep in mind that you exchange relatively large amounts: you generate all major profits.
So this is a great opportunity for those who want to earn money by trading but don’t really know how to do it. Or it is also ideal if you want to make a profit without complex trading with fundamental or technical analysis.
If you are interested, here are the steps that are explained one by one to configure your bot CryptoHopper.
In this section you will learn how to operate your arbitration bone in just a few minutes.
But before I get started, I want to emphasize something that is essential for your referee to be operational. The bot only places arbitration orders if you already have funds on the trading platforms that you will use. If one of the scholarships has no money for the two pieces, the order can be canceled.
After you have registered, you can start setting your bot.
- 1st phase. Go to “View all your Hoppers” and click on “Add a new Hopper”. There you see the page below. You must click on “Create Arbitrage Bot”.
- 2nd phase. In Basic settings → Basic settings you can name the bot and set the maximum number of times to open buy and sell orders.
- 3rd phase. There, in the Exchanges section, select the exchanges in which the arbitration botch works. Activate and enter the API keys for each exchange on which you want to exchange your bot (minimum 2). You can also trade in the “paper trade” mode to test the bot and its profitability. Paper trading is a good way to test the effectiveness of your bone. Simply put, it is virtual trade.
- 4th step. Cryptos and quantities. In this section you can define the maximum amounts that the arbitration bot uses for each crypto and the amount per transaction.
For example, if you set your BTC amount to 0.1, the bot will only trade 0.1 BTC of the total BTC in your wallet. Regarding the sales percentage, this is the percentage of the BTC amount that is negotiated with each transaction. Suppose your BTC amount is 0.1 BTC and your sales percentage is set to 15%, which means that the size of each arbitrage transaction is 0.1 * 0.15, which results in 0.015 BTC through arbitrage transaction.
It is a safe way to set limits on your bone.
- 5th step. After the transaction has been selected and registered, you must select all markets where your arbitrage bid can look for opportunities.
- 6th phase. Exchange the arbitration settings. In this section you can: Select the minimum profit that your arbitration bid is trying to achieve in each transaction:
- Set the maximum opening time for an arbitration order.
- Maximum number of simultaneous arbitration orders.
- Use the buy and sell percentage to set the lowest demand, the highest bid and the newest values.
- 7th phase: Market arbitration parameters. This section refers to intra-exchange or triangular arbitration. Here you can configure the specific parameters for this type of arbitration.
This bot can work together with the foreign exchange arbitrage bot and searches for market arbitrage opportunities on the stock exchanges you selected. Regardless of whether you have selected two or nine exchanges, the arbitrage bot works tirelessly to discover any loopholes in the market to increase the value of your portfolio.
- Final step. Go back. In this section you can return / retry canceled orders. If you want to retry the failed commands and activate this option, these commands are moved to the backlog to try again later. However, if this function is deactivated, the failed orders will be canceled completely.
And there you go !!!!!!! That’s all! Your arbitration bid is functional !!
It can be a bit difficult to understand all the different concepts in the beginning, I agree. It took me some time to get to know my bone well. But it becomes easy pretty quickly.
This small self-study is coming to an end. I hope I have been clear enough that you can quickly take advantage of these trading methods.
I recommend you cryptphopper but know that you can also do it manually. That said, it will never be as effective as a robot, let’s be clear about that.
Cryptohopper also works with a monthly subscription. You can use your trading bone from $ 19 per month. But this is reimbursed quickly with a few good operations!
If you have any questions about this topic, don’t hesitate to tell me in the comments or by email!