While the price of Ethereum has been fluctuating just like many other coins, it is still one of the most reliable cryptocurrencies. Many retail traders in this industry rely on an Ethereum trading bot which is a powerful tool for those interested in working within the crypto industry and focus on dealing with ETH, the native token of the biggest blockchain network in the world.
ETH and arbitrage
Investors without prior exposure to interexchange trading may not be familiar with the term “arbitrage”. It is one of the basic trading principles. You purchase assets and commodities in one place and seek a better deal somewhere else. This approach is the fundament of the contemporary international trade and allowed many European nations to become obscenely strong economically during the Renaissance.
Today, arbitrage is slightly more complicated and harder to pull off. For one, the speed of trading is instant meaning that you need to act quickly before other traders allow prices to consolidate. The second issue is that monitoring dozens of positions across multiple exchanges can be a challenging task even for professionals.
An Ethereum arbitrage bot is a specialized tool designed by WunderTrading to improve the efficiency of this particular strategy by incorporating contemporary cloud computing into the mix.
How does arbitrage work?
Ethereum is a crypto asset highly demanded in multiple regions where the rate of adoption is comparatively high. For example, Japanese, Singaporean, and the US markets have high trading volumes and prices may differ during any given day. People in Japan may pay top dollar for any ETH while US traders may want to dump their assets due to various circumstances.
In this exact example, you may purchase ETH in bulk in the US and sell it at a much higher price in Japan. This scheme was used by Sam Bankman-Fried, the CEO of now infamous FTX, when they actually tried to make money. Arbitrage was the way they made the required initial capital to expand their operations.
Ethereum trading bot is the easiest way to get into arbitrage without learning the intricacies of the strategy of analyzing thousands of buy and sell orders on multiple exchange platforms. It works like this:
- You set up a new account with WunderTrading and set up an arbitrage bot as instructed by the help section of the website.
- Connect multiple exchange accounts (more than one) so that the bot can start searching for discrepancies in prices across several platforms.
- Dedicate the necessary capital on both exchanges for trading and launch the bot. It will work automatically without your involvement.
Note that it is important to ensure that you do not risk more than you can afford to lose. Even the best Ethereum trading bot will not guarantee profits. A myriad of different factors may affect the market and create numerous lose-lose scenarios where any decision will be unprofitable.
Monitoring the overall situation in the global economy is also important. When it comes to international arbitrage, prices of the foreign currency exchange can dramatically affect the effectiveness of your investment strategy. In our previous example, all profits will be wiped away if the Japanese Yen falls against the US dollar which happened many times during this year.
Where to get an Ethereum trading bot for crypto?
WunderTrading is a great automation vendor with a solid catalog of products appealing to the audience of contemporary retail traders who enjoy using advanced instruments. The platform offers a wide range of solutions including GRID, DCA, custom scripts, and, of course, arbitrage trading.
The platform is integrated with TradingView and fetches market data as well as inputs from scripts directly from this popular analytical website. You can connect multiple accounts on exchanges like KuCoin, Kraken, Binance, and many others.
One of the biggest advantages of this particular vendor is its basic plan that costs literally nothing. You can set up a free Ethereum trading bot in a couple of minutes without investing a single dime. This feature is great for newcomers without any prior experience with script-writing, automation, and retail trading.
The main takeaway
Modern Ethereum trading software is a money-generating tool characterized by relatively low risks, easy setup, and accessibility. Smart retail traders try to dedicate at least some portion of their portfolio to arbitrage and work with multiple exchanges to further protect their assets in custody. With WunderTrading, you can do this for free using the default plan.
ETH is expected to grow significantly in 2023 thanks to the finalization of the merge with the Beacon network and the release of staked ETH. Getting into the crypto market now is a good idea for people who want to capitalize on high trading volumes that will be observed in the first quarter of 2023.