The 788 rule is a term commonly associated with cryptocurrency arbitrage trading. It refers to a simple arbitrage strategy where traders aim to exploit price differences between different exchanges or markets.
The "788" in this context doesn't refer to a specific technical rule but rather serves as a mnemonic for the steps in the process. The goal is to buy low on one platform and sell high on another to make a profit.
Here’s a breakdown of how the 788 rule generally works:
Buy (7): Purchase a cryptocurrency on an exchange where it is priced lower compared to others. This is often done by scanning multiple exchanges for price discrepancies.
Transfer (8): Move the cryptocurrency to another exchange where the price is higher. Since transfers take time and might involve fees, this step needs to be done carefully to avoid delays and high costs.
Sell (8): Sell the cryptocurrency on the second exchange at a higher price, thereby locking in a profit from the price difference.