Trading on the stock exchange is certainly a big risk, but even here you can find a way with minimal losses. One of the lowest-risk ways to earn money on the stock exchange is arbitrage trading.
Arbitrage trading, or in other words, stock trading — is a transaction whose purpose is to profit from the price difference for the same trading asset.
In simple words — it is a method of trading with minimal risks when a trader makes a profit regardless of the direction of price movement.
The main feature of arbitrage trading is time. It is necessary to act very quickly because fractions of seconds play a big role in this process. Therefore, by practicing this strategy, provide yourself with a powerful PC.
The principle of arbitrage trading
Everything is simple here: you bought bitcoin on the X exchange and sold it for more on the Y exchange. That is, the main goal of arbitrage trading is to make a profit on the difference in the exchange rate of an asset on different platforms.
Advantages and disadvantages of arbitrage trading
Advantages:
- minimal risks;
- the strategy is suitable for most assets;
- it is not necessary to conduct a deep analysis of the market;
- full automation of trading.
Disadvantages:
- a small income due to a small risk. To get a good profit, you need a lot of capital;
- quite a complex strategy compared to conventional trading strategies. We do not recommend that beginners start with this strategy;
- with manual arbitration, you may not have time to sell the asset.
Arbitrage trading is a great opportunity to earn small amounts with minimal risks.
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