Earning On Arbitrage
Trading with FuturoCoin can be tricky. It requires a lot of experience, knowledge, and intuition from you. Still, there is a relatively easy way to make money from cryptocurrencies. You can take advantage of arbitrage.
FuturoCoin tries to teach people about cryptocurrencies and terms related to them. You can learn more about the crypto world at FuturoCoin Academy. Today, the cryptocurrency is showing how to earn money, using a simple solution.
Arbitrage: what’s that?
Trading cryptocurrencies requires knowledge, experience, intuition and a little bit of luck. If you don’t have any of these qualities, perhaps earning on transactions is not for you. You have probably already tried doing some research on the matters that interest you. But remember that, not everything you find online, is true and sometimes can be misleading, it may cause more damage than benefit. It’s good to have a reliable source of information to avoid making any mistakes during trading or analyzing the market. We are here to help you gain more knowledge about cryptocurrencies.
So, what is the arbitrage? It may be associated with dispute settlements. In economics though, it is something different. It’s buying and selling assets, usually on different platforms, and making a profit from the unavoidable differences in prices. Simply put, arbitrage means earning from prices fluctuations.
How does it work? Let’s illustrate it with an example. The price of FuturoCoin changes quickly, so it is really easy to profit from it. There are many cryptocurrencies exchanges in the industry, where prices are different. You need to find the occasion and buy on one platform at a lower price and sell on the other at a higher price. For instance, if FTO costs $3.87 on CoinDeal, and the same currency is worth $4.21 on BitBay (prices from 18th February), you just have to buy on CoinDeal and sell on BitBay. Easy, right?
It’s called the simple arbitrage. There is also the triangular arbitrage. The second one takes advantage of the price differences between three different coins.
The risk of arbitrage
So, you may ask yourself, why doesn’t everybody make money from arbitrage? Because there is some risk involved in the process. You have to take many factors into consideration.
You must remember about fees. There is a transaction fee, a transfer fee, wallet fees, network fees, etc. So, if the income from FTO price fluctuations is too little, you may lose money instead of gaining it. Only if you count everything, you can earn from arbitrage.
So, that’s it. We hope that after reading this article, you will know how to use the arbitrage strategy to earn money on trading with FuturoCoin.