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Kucoin Binance Arbitrage: High-Profit Strategy

arbitrage trading

Because both Kucoin and Binance are popular exchanges, implementing Kucoin Binance arbitrage trading is a high-profit trading strategy.

One of the major challenges of crypto arbitrage trading is the ability to do fast and secure transactions, but while implementing Kucoin binance arbitrage, you don’t need to worry about secure or fast transactions.

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Both of these two exchanges are popular and trusted enough for a secure transaction. Not only that, these two exchanges have high trading volumes, so finding an opportunity to execute your transaction isn’t a problem.

In this post, I will be introducing you to the kucoin binance arbitrage trading strategy; how you can profit higher on it; and what associated risks exist.
So, let’s get started.

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What is Kucoin Binance arbitrage trading?

Kucoin Binance Arbitrage is an exchange arbitrage trading strategy in which you profit by spotting a cryptocurrency asset’s price difference between the Binance exchange and the Kucoin exchange and leveraging the difference by buying from the exchange with the low price and selling to the exchange with high price.

This is just like normal crypto trading in which the goal is to either “buy low and sell high” or “sell high and buy low.” The only difference is that instead of buying a contract for a difference in price, arbitrage is done rapidly for discrepancies in the price of different crypto assets.

Eligibility for Kucoin Binance Arbitrage Trading.

Before you can implement Kucoin Binance arbitrage trading, you must meet the following requirements:

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  • You have some capital set aside.
  • You must be a verified Bianance user.
  • You must be a verified Kucoin user.
  • You must have fast payment method
  • You must know how to buy and transfer coins across different exchanges.

What Brings Kucoin Binance Arbitrage Opportunities?

The following factors contribute to Kucoin Binance  Arbitrage opportunity:

  • Crypto to fiat exchange rates differences
  • Differences in the liquidity across different exchanges

How to Complete Kucoin Binance Arbitrage trading.

Now that you understand how kucoin binance arbitrage trading works, let’s take a look at how you can start it. Take the following steps to start kucoin binance arbitrage trading.

Step 1: Fund your wallet.

The first step to doing any crypto arbitrage trading is to fund your wallet with USDT or any other stable coin. Because this is an arbitrage between Binance and Kucoin, you can either fund your Binance wallet or Kucoin wallet. If you have enough capital, you can even fund both of them. This is because you may not know which exchange arbitrage opportunity will pop up first.

If you are looking to fund your binance wallet, the video below can come in handy.

Step 2: Find an asset to trade.

Once you have your crypto wallet funded with USDT or any other stable coin, the next thing you need to do is find a coin that has an arbitrage opportunity across the two exchanges.

I use coinmarketcap to spot my own arbitrage trading opportunities. What I simply do is search for the name of a coin and then compare the price difference of the coin between Binance and Kucoin. If it is something with a high spread, I then bid on it.

For instance, in the image below, I have searched for Solana on coinmarketcap and have navigated to the “market” tab. You can see there is a small difference in the price of Solana on binance and on kucoin.

image showing the price of solana on binance and on kucoin

So, what you simply do is look for coins with a higher price spread across binace and kucoin and start trading them immediately.

 Step 3: Trade the Spread.

Once you have spotted an asset with a high price spread, you start trading either by buying on binance, and then transferring it to Kucoin and selling it immediately or vice versa.

Important: you need to be very fast with your transactions when you spot an arbitrage trading opportunity. If you hesitate, the market can normalize and you will end up losing or not making any profit.

How to Increase Your Profit on Kucoin Binance Arbitrage Trading.

Because the price difference between the crypto assets across the two exchanges is not going to be very high, there are certain things you need to do to increase the profit.

1. Trade with high capital: if you can afford a capital as high as $5000, you will have the chance to make a higher profit. To be honest, it will not be encouraging if you are doing crypto arbitrage trading with $50-$100. If you trade with a small account, you will be making a profit of something like $5–$8.

2. Do several transaction:

Because this trading strategy usually returns a low profit, you need to perform as many transactions as possible so that your profit can sum up. For instance, if one trade gives you $10, completing a similar trade 10 times in a day will compound your profit to $100.

3. Use a low-cost network for your transactions:

Another way to maximize the profit you make in this crypto arbitrage trading is to use a low-risk network. Because you are not buying these coins for future appreciation, you need to make sure you reduce the amount you spend on transactions so that it will not cut into your profit.

Conclusion.

I believe with this, you have learned what kucoin arbitrage trading is and how you can begin your journey toward it. One cool thing about this trading strategy is that it is  low-risk endeavor. The only challenge you may encounter with this trading strategy is a loss due to transaction fees.

Before I drop it, I must point out that the risk involved due to transaction fees should never be underestimated.  These risks, when neglected, can cut into the capital of any trader, and you don’t want to be a victim of that.

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