How Do Trading Bots Automate Triangular Arbitrage?
Trading bots automate triangular arbitrage by constantly monitoring price data for three currency pairs on an exchange. When a bot detects a profitable price discrepancy, it automatically executes the three required trades in rapid succession.
This automation is crucial because these opportunities are often small and last for only a few seconds. The bot calculates potential profits after fees and executes faster than any human could, maximizing the chances of a successful trade.
Glossar
Trading Bots
Algorithm ⎊ Trading bots are automated software programs that execute buy and sell orders for cryptocurrencies and derivatives based on predefined quantitative algorithms and market signals.
Bots
Automation ⎊ Represents the deployment of programmatic agents to execute predefined trading logic across cryptocurrency and derivatives exchanges with sub-second latency.
Triangular Arbitrage
Arbitrage ⎊ Triangular arbitrage, within the context of cryptocurrency derivatives and financial markets, exploits temporary price discrepancies across three distinct markets or exchanges for the same underlying asset or related instruments.