Intra-Exchange Arbitrage Bot
For Premium and Professional users. Feature is in BETA.
In addition to the Inter-Exchange Arbitrage strategy, CryptoHero allows a user to implement an arbitrage strategy within the same exchange using our Intra-exchange arbitrage bot (ITAB).
Intra-Exchange arbitrage works by using the Triangle Arbitrage strategy.
Intra-Arbitrage works best on 5min Trading Frequency. Also, we recommend experimenting with a range of take profit for your coins to find out which setting works best. A range of 1% to 3% is good.
A triangle has three points. Essentially, this is what a triangle arbitrage means - three trades to compete an intra-arbitrage strategy. A triangle arbitrage is split into three trading "points" (of a triangle).
Point 1 - Trading the actual pair
Point 2 - Trading the pair where the Quote currency is the same as the Base currency in Point 1.
Point 3 - Complete the arbitrage by selling the asset bought in Point 2 for the same Quote currency as the pair bought in Point 1.
Let us illustrate what triangle arbitrage is with an example.
- User buys 1 BNB with 300 USDT (BNB/USDT pair)
- User buys 4.41 AAVE for 1 BNB (AAVE/BNB pair)
- User sells 4.41 AAVE for 305 USDT (AAVE/USDT pair)
At the end of the third trade, the user has gained 5 USDT as profit.
The key advantage of Intra-Exchange Arbitrage is that no transfer of funds is needed as arbitrage trades take place within an exchange and there is no need to maintain two sets of assets in two exchanges (like inter-exchange arbitrage).
You cannot access ITAB if your current exchange is Paper
Setting up ITAB is simple (well, what do you expect from CryptoHero). Go to the Bots page and click the New Bot button, then select Intra Arbitrage.
Next, select the Trading Pair that you would like to run on.
Long requires only the Quote currency of the trading pair. However, CryptoHero also allows you to activate the "I also hold the Base Currency" option. By holding both Base and Quote currencies, the chance of arbitrage succeeding is higher. We strongly recommend that you activate this option.
Short requires only the Base currency of the trading pair. For Short, the bot will sell the asset first as part of the triangle arbitrage initiation. However, CryptoHero also allows you to activate the "I also hold the Quote Currency" option. By holding both Base and Quote currencies, the chance of arbitrage succeeding is higher. We strongly recommend that you activate this option.
This strategy will require both Base and Quote currencies. This strategy is also the fastest to find a triangle-arbitrage opportunity.
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 or 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 if you are running Long/Short
Exchange 1: 100 USDT if you are running Long strategy
Exchange 1: 10 ABC if you are running Short strategy
In order to capture fleeting intra-arbitrage opportunity, all order types are set as Market 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.
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.