Triangular arbitrage is a trading strategy that exploits the price discrepancies between three different currencies in the foreign exchange market to generate profit. The strategy takes advantage of inconsistencies in exchange rates between currency pairs involving three currencies.
Here's how it typically works:
A, B, and C.A/B, B/C, and C/A.A/B * B/C * C/A ≠ 1, there's an opportunity for arbitrage.However, it's worth noting that such opportunities are often short-lived and require quick execution due to the efficiency of the foreign exchange market. Additionally, the market tends to adjust rapidly to eliminate arbitrage opportunities. Therefore, traders employing this strategy often rely on automated trading systems to execute trades swiftly.
We can try to create an arbitrage bot that trades of the Bitso Exchange
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