Master Crypto Triangular Arbitrage With Coygo's New Trading Bot
Master crypto triangular arbitrage with Coygo’s new trading bot
If you’re looking to run your own triangular arbitrage bot on Binance, Coinbase Pro, Kraken, Gemini and other crypto exchanges, you’re in luck!
(P.S. Need a reminder on how triangular arbitrage works? See our other post: Cryptocurrency Triangular Arbitrage: How Does It Work?)
Here at Coygo we’ve been on a mission to provide the industry’s best solutions in cryptocurrency arbitrage tooling and to make these advanced concepts simple and accessible to any trader. First we introduced our Arbitrage 2.0 experience for manual DIY arbitrage with Real-time spreads, One-click trading and Rapid transfers. Then we went a step further and created a suite of fully-automated crypto arbitrage trading bots, with strategies for inter-exchange arbitrage between two exchanges that don’t rely on transfers or withdrawals.
Our number one request from our users has been to support crypto triangular arbitrage, so today we’re happy to announce that Coygo Terminal’s trading bots now support a fully automated and configurable triangular arbitrage strategy that can identify and react to triangular arbitrage opportunities between Bitcoin, Ethereum and any other cryptocurrencies within 25 milliseconds or less. The bot strategy’s official name within Coygo Terminal is “*Arbitrage: One exchange, three pairs (triangular), one starting asset*”.
By the way, if you’re interested in inter-exchange crypto arbitrage between two exchanges instead you can check out our other post: How to Profit From Crypto Arbitrage Trading. We’ve got bot strategies for that as well!
Why choose Coygo’s triangular arbitrage bot?
There are a number of reasons why Coygo Terminal’s trading bots offer a solution with their own unique set of benefits to crypto traders:
Security — Don’t trust the cloud
Coygo Terminal is a bit unique in that your exchange account credentials are only stored encrypted on your hard drive, not our servers. Coygo never has access to your exchange accounts.
Arbitrage opportunities only exist for a short amount of time so speed is key to success. Coygo Terminal establishes real-time websocket connections directly between your machine and each exchange for the fastest possible data access. Our servers don’t act as a middleman.
React in milliseconds
Coygo Terminal’s trading bots are extremely efficient and can identify & respond to opportunities in milliseconds, allowing you to compete with high-frequency traders. All calculations and order submissions are done directly on your machine, so the more powerful your machine is the faster your bots can perform.
Simple & configurable
Configuring your triangular arbitrage bot is made simple with easy explanations of each configuration value and how it will impact the trading bot’s execution. The interface will help you find the available trade pairs that support triangular arbitrage.
Account for trading fees
The bot takes your trading fees into account and will ensure that you’ve chosen a “Minimum % overvalued” that accommodates those fees.
Paper trading with Test Mode
Test your crypto trading bots with simulated trading, or “paper trading”, by running your bots with Test Mode enabled. This allows you to test different bot configurations before using them with your own exchange accounts.
Sequential or parallel execution strategies
If you’re mainly only holding your starting asset, you can use the ***Sequential ***execution strategy to submit each order after the previous. If you’re holding all three assets and want to act on the opportunity as quickly as possible, you can submit all orders simultaneously with the Parallel execution strategy.
Coygo Terminal supports most major exchanges and is always looking to support more. Today’s list of supported exchanges includes Coinbase Pro, Poloniex, Binance, Kraken, Bittrex, Gemini, Bitfinex, bitFlyer, and KuCoin.
How do I configure a triangular arbitrage bot with Coygo Terminal?
I’ll show by example here, below is a screenshot of the triangular arbitrage bot’s configuration screen:
Screenshot if the triangular arbitrage bot’s config
So how exactly does the triangular arbitrage bot work?
Each trading bot strategy within Coygo Terminal has an explanation available to help traders understand exactly how the bot executes. Below is the explanation for our triangular arbitrage bot (heads up, this gets a bit technical):
Intra-exchange triangular arbitrage on one exchange
Submit buy and sell orders in parallel or sequentially
Find cross-rates in either path, Buy Buy Sell or Buy Sell Sell
Respond to triangular arbitrage opportunities within milliseconds
Find triangular arbitrage opportunities that start and end with a balance in the “Starting asset”. Orders are submitted to three markets (trade pairs) when the cross-rate is overvalued. This allows you to perform arbitrage immediately on one exchange.
Orders are submitted in either of the following paths if the cross-rate is overvalued:
Buy on “Trade pair A”
Buy on “Trade pair B”
Sell on “Trade pair C”
- (1 / “Trade pair A” ask) x (1 / “Trade pair B” ask) x (“Trade pair C” bid)
Buy on “Trade pair C”
Sell on “Trade pair B”
Sell on “Trade pair A”
- (1 / “Trade pair C” ask) * (“Trade pair B” bid) * (“Trade pair A” bid)
Orders can be submitted using two different execution strategies:
Submit one order at a time, waiting until the previous orders has been accepted before submitting the next.
Introduces a higher execution risk as order books can change while your orders are being submitted.
Allows you to run the bot while only holding a primary balance of “Starting asset”, as well as at least a small amount of the other two assets as well.
Submit all three orders at once.
Can reduce execution risk as the bot knows the state of all three order books while submitting orders.
Requires you to be holding enough balances of all three assets to accommodate order sizes while running the bot
For example, when you are
Trading on Kraken
“Trade pair A” is ETH-BTC
“Trade pair B” is LTC-ETH
“Trade pair C” is LTC-BTC
In this example, before running a bot with this strategy type:
If using the Sequential execution strategy, you must be holding BTC on Kraken and at least a small amount of ETH and LTC as well.
If using the Parallel execution strategy, you must be holding enough BTC, ETH and LTC on Kraken to cover order amounts.
When a favorable overvalued cross-rate is detected, orders will be submitted. An overvalued cross-rate is considered favorable when it’s overvalued by a higher percent than the “Minimum overvalued %”. Order amounts will attempt to avoid slippage by avoiding orders larger than the top of the order book.
DISCLAIMER: Execution risk is always present when trading. There is no guarantee that your orders will fill at the expected rate. Profit is not guaranteed, trade at your own risk.
Try Coygo Terminal today for free!
You can try Coygo Terminal for free today by starting a free trial. We’d love to hear your thoughts, feedback from traders like you is what helps us ensure we’re building the best possible solutions for our customers. Coygo Terminal provides real-time tools for arbitrage and order book analysis, helps track your portfolio across exchanges, simplifies transfers between exchanges, and a whole lot more.
Good luck & stay safe!
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