A Different Kind of Arbitrage

Arbitrage as defined by Wikipedia is "[...] the practice of taking advantage of a Price-Difference between two or more markets". The common way of using Arbitrage to gain profits is e.g. to buy a financial instrument on one exchange, transfer the asset to another exchange and sell it there at a higher Price.
Looking at Cryptocurrencies, there are a lot of Opportunities to take advantage of Price-Differences between Crypto-Exchanges, because there is no central Instance that controls the Price.
My CryptoArbitrageBreakout Indicator (Part of my CryptoArbitrage Toolkit for TradingView) can detect sudden increased Arbitrage between to Exchanges.
Another Strategy for using Price-Differences between Exchanges would be to detect Divergences or Lag between Price Movements on two Exchanges.
For example: The price on Exchange A is moving up, while the Price on Exchange B is going down. With the help of my CryptoArbitrage Toolkit you can detect Patterns that make use of those diverging Movements. In some cases the Price on Exchange B could revert and follow the Direction of the Price-Movement on Exchange A.
Have a look at the Example - I detected a pattern on the 5 Minute Ethereum/ US Dollar (ETHUSD) Chart. Each time the Price for ETHUSD was falling on CEX.IO while the Price was rising on POLONIEX, the Price started to rise on CEX.IO too.


Sometimes those Patterns don't work all of the time, but with the Backtesting-Feature of my Toolkit you can find out if the Probability is high.

There is a lot of exploratory Work to do and you will need to do a lot of Research because there are so many combinations of Exchanges, Cryptocurrencie, Timeframes and other Marketconditions.

But on the other Hand - there are so many Opportunities out there to make Profit with this Approach!

The Toolkit won't do the Thinking for you, but it will save you lot's of Time and will help you spot those Divergences you would have overlooked otherwise.

Head over to my shop to buy the Toolkit.