#Training

Price discrepancies occur more often in the market than it seems. When one asset is traded at different rates across various pairs, a careful trader can use this to their advantage.

▪ Triangular arbitrage is a strategy where a trader exploits price differences between three different assets in the market.

It is based on exchanging the first asset for the second, the second for the third, and the third back to the first. This process is repeated until the price difference is eliminated.

✅ Example:
Start with USDT → buy BTC.
Exchange BTC → for ETH.
ETH → back to USDT.

If the USDT/BTC, BTC/ETH, and ETH/USDT rates are not perfectly balanced, you can end up with more USDT after completing the cycle than you started with.

🟢 Triangular arbitrage increases activity in the markets, boosting liquidity and making trading less risky.

In markets with low liquidity, traders may face difficulties in executing necessary trades. The inability to buy or sell assets at desired prices can lead to losses.