Hi guys.
I've been interested in arbitrage for quite some while now. And am looking to make a bot to find and trade arbitrage opportunities on the crypto market. Since the crypto markets are quite new and easily accesable there are lots of oppurtunities for arbitrage.
For the people who don't know what arbitrage is here's a example.
There are 2 exchanges exchange A and B. Exchange A sells BTC for 30000 USD and exchange B sells BTC for 31000. If you would buy 1 btc on exchange A and sell it on exchange B you get a profit of 1000 USD minus fees.
The only obstacle im facing is that I don't know anything about coding. So I will be using open source software and lots of time to understand everything about the code.
The reason I made this post is to reach out to my fellow logikfx members and maybe find someone who knows lots about coding so I can ask some questions from time to time. I would also love to hear your opinion about arbitrage and trading bots in general.
Sup Mika, I've seen a few guys attempt this, and these are the main areas of concern:
Getting a skilled enough developer to adapt to changes on each broker platform (if not, 1 missed trade can lead to huge losses)
Crypto exchanges are not regulated, and therefore are unreliable. Not uncommon for funds to lock up, or delays in withdrawals.
Packet loss or connection to server errors are common on volume spikes... again eliminating arbitrage window of opportunity (especially when prices are volatile enough to provide a discrepancy across platforms)
Transaction/ Gas fees - slowly eats away at capital, as arbitrage would classify in the HFT category
Depending on what coin you're trading... there are delays in wallet transfers if miners dismiss your block. So, if you're planning to buy at X --> transfer to Z ---> and sell on Z... be aware, transaction times are not instant.
Considering all of above, the mispricing has to be substantial to cover that risk, which is a lot rarer now, than it was say 5 years ago (not impossible though)
Any developer/ coder who's able to code a successful arbitrage bot, and debug on demand is not going to be cheap to hire - so I recommend to continue learning yourself, being aware of the massive risks outlined above.