The most stable way to make money in the currency circle---arbitrage!
Everyone must collect it!
How to arbitrage better?
Here we mainly focus on spot arbitrage, and there are several directions of thinking:
1) Increase the number of arbitrage opportunities
Therefore, it is necessary to monitor the price difference between each trading pair on the same exchange and different exchanges
2) Increase the price difference of a single arbitrage
Generally speaking, the price difference of mainstream coins will not be very large, but the price difference of altcoins will be relatively high, so altcoins can be made. But both have their own advantages and disadvantages:
Mainstream coins: There are a lot of funds that can be accommodated, such as BTC, you can open a depth of 100 million without any problem, and the slippage is very low. But usually the price difference is very small, and even if there is a return, it is very slow.
Altcoins: The funds that can be accommodated are limited. Some will return within 5 minutes if you do not open the price difference, and sometimes the slippage will be very high. At the same time, the platform's loan quota is also limited (sometimes there is no opportunity to open when there is no coin) and because altcoins sometimes pull the market without martial ethics, the contract side must be able to balance the margin, otherwise there may be a liquidation (such as the DOGE incident). The advantage is that if there is an opportunity spread or the funding rate will be very high (I have done a spread of 30% before), and at the same time, because of the fast return, the utilization rate of funds is very high.
3) Improve the utilization rate of funds
On the one hand, it is to do currencies with fast return, and on the other hand, it is possible to open leverage appropriately. For example, when BTC is in a positive premium, you can open 2x leverage to go long in spot and 2x short in futures. Since the probability of BTC rising or falling by 50% at once is very low, the risk is also controllable. In this way, it is equivalent to magnifying the funds, and the disguised utilization rate of funds is expanded. Of course, when using leverage, you must keep in mind [high returns and high risks], control risks, and prevent liquidation. Of course, it does not mean that liquidation will definitely lose money, because if the unilateral liquidation continues to go unilaterally, it actually makes more money, but if it comes back after the liquidation, it will be a big loss.
3) Reduce transaction costs at all links
This is the magic of the eight immortals crossing the sea. You can find the key account manager of the exchange and open a higher level of VIP, so that the transaction fee will be very low and the loan amount will also increase. Therefore, large funds have greater advantages in this arbitrage model and can negotiate many preferential policies with the exchange.
