Why should I use Bitsgap for arbitrage trading?
The arbitrage is the practice of taking advantage over of a price difference between two or more markets for the same currency pair. The arbitrage occurs when a currency is purchased from one market and simultaneously sold in another market at a higher price. This method is considered to be a low-risk profit for the trader.
The volatility, withdraw and deposit fees, transferring speed are the most common problems in crypto-currency markets that do not allow classical arbitrage method to be used in action. You must ensure the instant order execution from one market to another for this method to work. The Bitsgap Team has implemented a solution which allows all users to execute buy and sell orders on two markets simultaneously.
Therefore, this requires a pre-setup from the user to begin utilizing arbitrage possibilities and make profits in the almost risk-free environment
How exactly does the Bitsgap arbitrage service work?
Our system calculates the potential deals between all supported markets and visualizes the result in profit based on fiat currency. The profit calculation depends on the user's balance available on two markets. Upon completing the arbitrage transaction, the system will send a request for two simultaneous operations: buy order in Buy Market (1st Exchange) and sell order in Sell Market (2nd Exchange).
After the execution of these two transactions, the user receives income in the form of fiat currency in Sell Market and cryptocurrency in Buy Market. Thus, increasing its overall portfolio. Having a fiat- and a crypto- currency in at least two markets preferably in even volume, will provide the best variation and experience in arbitrage trading through Bitsgap.
This setup will ignore the most common problems of transactions, time and reaction which are critical in classical arbitrage method.
What do I need to have before entering in Bitsgap arbitrage trading?
As mentioned above, our system allows you to make arbitrage transactions that differ from the classical arbitration method due to equal funds distribution of between several markets. To proceed with arbitrage trading through Bitsgap, you need to have (a) at least two markets connected to the account, and (b) for these two markets you have fiat- and a crypto- currency available for trading.
For the best result, we strongly recommend having the same value of crypto and fiat currency assigned for both exchanges. It will help to calculate all possible arbitrage deals between the two markets, as well as the most accurate potential profit forecasting. Find exchange with historically lower price and have your fiat assigned there. Then send your crypto to exchange where the price tends to be higher.
Even fund distribution of crypto and fiat currency will allow you to see many more deals than if you had a fiat in one market and a crypto coins on the other.
Please note, that for a guaranteed transaction, you must have at least 15 USD worth value in Fiat and 15 USD worth value in the crypto coins, otherwise there is a chance that the market will not accept the transaction as it is below the minimum specified amount quoted by the involved market.
The next chapter Navigation in arbitrage trading interface will show and explain the arbitrage interface.