Arbitrage strategies have been some of the most reliable money-makers for many retail traders since the beginning of the crypto era. For instance, the infamous founder of FTX Sam Bankman-Fried made his enormous starting capital by using arbitrage-trading Bitcoin across the pond and exploiting the price difference between Japan and the US.
When centralized exchanges were smaller in scale and did not have the same international presence as many have now, price convergence simply was not a big risk. Today, a retail trader must use advanced solutions, such as an arbitrage bot that can work autonomously and quickly, to exploit the same difference. The interconnectedness of the ecosystem leads to near-instant price convergence across geographically separated markets.
WunderTrading is a premier supplier of various automation solutions that can be used by individual retail traders and institutions to increase the efficiency of their financial activities. You can set up a fast arbitrage robot that can make money reliably. However, it is important to understand why this approach works today and how you can jump on the hype train in 2025.
Automated trading strategies in a nutshell
According to various surveys, up to 65% of all retail traders are using automation to at least some degree. Many institutions automate 100% of their operations in the market and equip their personnel with the best instruments available in the automation industry. WunderTrading has a solid audience of over 120 thousand traders operating 40 thousand robots and reaching over $500 million in monthly volumes.
The sector is growing at a steady pace and allows many investors to rethink their approach to allocating capital. While it can be a good idea to hunker down and hold to a couple of coins that seem to be doing well, proactive trading can be better when it comes to profitability optimization and risk management. It is especially true in the crypto market considering the volatility and unpredictability of many assets.
Take TradingView automated trading as an example. Technical analysis (TA) is the only reasonable method of forecasting cryptocurrency price action simply because fundamental approaches rarely work outside of key players like Bitcoin, Ethereum, Litecoin, Ripple, and others. Politics and investment sentiment do not affect smaller coins to the same degree making market conditions chaotic.
Automation is all about following a strict algorithm based on repeating patterns that appear in the market all the time. Here are some of such patterns that can be identified and automated:
- Price retracements (corrections) occur regularly as the market always overreacts to events and abnormalities. After a new peak or a dip, you can expect a temporary countermovement that may or may not turn into a new trend. Exploiting this feature of the asset market is quite important.
- Following volumes and price action to spot when the market is overbought or oversold is another reliable approach. Indicators like the Stochastic and Relative Strength Index (RSI) help you notice good opportunities for entry when the market is preparing to turn around.
- Tracking trends with simple moving averages is another standard approach in TA. Many experienced analysts can finely tune settings for fast and slow moving averages to correctly predict price action and make informed decisions.
WunderTrading is a great destination for users interested in creating a TradingView crypto trading bot. Note that investors must have a firm grasp on TA strategies and use various instruments like indicators and graphical tools as efficiently as possible to achieve success using alerts from this popular charting platform.
What is the connection between automation and arbitrage?
The biggest risk, which many experts call the only risk, in the art of arbitrage is price convergence. If you make a simultaneous trade on different platforms to secure the difference between asset prices, it can go through but prices may change to equalize at a certain level.
Here are the reasons why price convergence is an even bigger deal than a couple of years ago:
- The interconnected nature of the digital crypto market allows users from various platforms to instantly receive information from multiple sources and adjust their orders accordingly. You will rarely stumble upon a situation where the difference holds for long enough to exploit manually.
- Arbitrage traders compete against each other to make the trade faster than others. At any moment, a variety of digital assets are tracked by teams of experienced professionals who are ready to exploit even the tiniest price discrepancy!
- Automation is affordable and easily accessible. With simple automation tools available for cheap or even free, it is quite hard to enter the market and make money without using similar instruments. A successful arbitrage trader needs a good robot!
Let’s go back to the example of a TradingView alerts bot. One of the problems here is that many market participants are using similar or even exactly the same tools to forecast price changes. Price convergence may occur while you are setting up a trade manually losing precious seconds instead of securing the difference instantly.
Different forms of arbitrage automation
You can use the product lineup at WunderTrading to create a variety of arbitrage systems that can deliver great results. Here are some of the options you can explore:
- Standard or Pure Arbitrage is an old-school strategy that relies on the speed of execution among all other factors. An investor buys a coin on one exchange and simultaneously sells it on another if the price on the first platform is lower than on another. You must react quickly to leave your competitors in the dust. Automating this strategy by connecting a system for crypto bot trading with TradingView is a great solution.
- Triangular Arbitrage is hugely popular in the US due to the growth of the DeFi sector. The abundance of digital assets allows CEXes to create pairs that do not use USD-based stablecoins as references. You don’t have to trade BTC for USDT. Pairs like BTC/ETH or BTC/SOL can be used too. If three pairs sharing the same assets (i.e. BTC/USDT, ETH/USDT, and BTC/ETH) are tracked, investors can find discrepancies in prices and create three-way orders to capitalize on them.
- Statistical Arbitrage is a complex strategy that analyzes price action and trading volumes of multiple assets to identify correlations and form a diversified portfolio. It is a time-tested approach that has been around for ages. WunderTrading offers one of the finest automated crypto strategies for US traders — a powerful AI-assisted statistical arbitrage robot that can manage hundreds of positions and identify excellent opportunities for money-making with an impressive level of consistency.
Arbitrage comes in all shapes and colors. You can create a portfolio that uses various arbitrage methods to make money reliably despite the high risk of price convergence. However, you must have a relatively big investable capital to make this low-profit system work well.
Do you have to engage in arbitrage?
US retail traders have access to some of the most reliable centralized exchanges in the world including the likes of Coinbase and Binance. These platforms offer diverse spot markets and access to all sorts of futures contracts. It means that you can build unique strategies that utilize this flexibility and sophistication.
Due to reliable TradingView integration, feature-rich products, and fast-paced development, WunderTrading can be your best friend in the world of crypto if you are looking into ways to become an arbitrage trader!