Inter-Exchange Arbitrage Bot
For Premium and Professional users. Feature is in BETA.
Inter-Arbitrage works best on 5min Trading Frequency
CryptoHero allows a user to implement an arbitrage strategy between two exchanges using our Inter-exchange arbitrage bot (IEAB).
Inter-Exchange arbitrage works by finding a lower-priced coin on one exchange and selling it for a higher price on another exchange.
To run this bot, you will need to connect at least two exchanges (excluding Paper).
You cannot access IEAB if your current exchange is Paper
Setting up IEAB is simple. Go to the Bots page and click the New Bot button, then select Inter Arbitrage.
In the Asset tab, simply select the two exchanges that you would like to execute the arbitrage.
Next, select the Trading Pair.
Please ensure that you have both base and quote currency in both of the exchanges. For example, if the trading pair is ETH/USDT, you need to have ETH and USDT in exchange 1 and 2.
Inter-Exchange arbitrage works by buying and selling trades almost simultaneously in order to capture the arbitrage opportunity. In order to allow the near-instant reconciliation of buy-sell on both exchanges, it is necessary for the user to have assets stored on both exchanges.
Like all other bots in CryptoHero, you can give the arbitrage bot a maximum fund allocation based on the selected Trading Pair quote currency. For example, if you are trading ABC/USDT and ABC coin is at 10 USDT each, a Fund Allocation of 100 USDT will cause the bot to buy 10 x ABC and sell 10 X ABC. Please make sure that you have the equivalent quote currency worth in value for the base currency.
So, based on the example above, you will need
Exchange 1: 100 USDT and 10 ABC
Exchange 2: 100 USDT and 10 ABC
You may ask why do I need assets in both exchanges? This is because we never know if the price of a coin is higher or lower in exchange 1 versus the other. So, there is a chance we may either buy or sell a coin in exchange 1 and do the reverse trade in the other exchange.
In order to capture fleeting arbitrage opportunity, we recommend using Market order type. However, if you are sure that the arbitrage opportunity is always present, you may experiment with the Limit order type.
Premium users will only be able to run on 15minute while Professional user will be able to run on 5minute. A 5 minute frequency will provide higher arbitrage opportunities.
This represents the minimum profit that the arbitrage opportunity must present in order for the bot to execute the trades. This percentage is dependent on the asset. Please study the price gaps for the asset and determine a realistic minimum profit to configure.
To run an arbitrage opportunity well, you need to understand the concept of order layer (or order depth). Essentially, it means whether the bot will execute your entire Fund Allocation by filling the order through multiple layers in the order book or just filling out on the first layer.
First Layer Only setting prioritizes your profit and will not use your entire Fund Allocation. Users should consider First Layer Only if the liquidity for the asset is good.
Multi mode aims to use up your entire Fund Allocation. You run a higher risk of your arbitrage trades entering into losses.
The backtest feature is not available for arbitrage bots as arbitrage opportunities require real time market data (the "at the moment" data) to execute. Using historical market data will give very different result.