Arbitrage trading in Nigeria is a hot topic these days. Despite the government’s ban on certain types of trading, such as crypto, many people are still making a lot of money through trading. In fact, Nigeria is one of the highest adopters of cryptocurrency trading in the world.
If you’re interested in arbitrage trading, there are different types to choose from, including crypto, forex, and stocks. While forex trading is allowed for select entities like banks, crypto trading is still not approved. But don’t worry, we’ll provide you with all the information you need to get started.
Whether you’re interested in dollar or crypto arbitrage trading, it’s important to have a good understanding of the financial markets and the asset you want to trade. You’ll also need access to different trading platforms or exchanges to buy and sell the asset.
For crypto arbitrage trading, you can use trading bots or software to automate the process of identifying and executing trades. Keep in mind that some exchanges have restrictions on high-frequency trading, so be aware of their policies.
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For forex arbitrage trading, you’ll need access to different forex brokers and monitor the exchange rates of different currency pairs. You can use software or trading platforms that offer real-time data and trading signals to help you identify opportunities for arbitrage trading.
Arbitrage trading can be a profitable business, but it’s important to do your research, understand the risks involved, and start with a small amount of money. We hope this information helps you get started with your arbitrage trading journey.
What is Arbitrage Trading
Arbitrage trading involves taking advantage of price differences between two or more markets to make a profit. In the case of cryptocurrency arbitrage, traders buy cryptocurrencies on one exchange where the price is low and sell them on another exchange where the price is high. The same applies to forex and stocks trading.
There are different types of arbitrage trading, such as spatial arbitrage, statistical arbitrage, and triangular arbitrage. In spatial arbitrage, traders take advantage of price differences between two different exchanges or markets. In statistical arbitrage, traders use complex algorithms to identify price discrepancies between different assets or financial instruments. In triangular arbitrage, traders take advantage of price differences between three different currencies to make a profit.
To start arbitrage trading in Nigeria, you need to have a good understanding of the financial markets and the specific asset you want to trade. You also need to have access to different exchanges or trading platforms where you can buy and sell the asset you are interested in.
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For crypto arbitrage trading, you need to have accounts on different exchanges and monitor the prices of cryptocurrencies on these exchanges. You can use trading bots or software to automate the process of identifying and executing trades. However, it’s important to note that some exchanges may have restrictions on trading bots or high-frequency trading, so you need to be aware of their policies.
For forex arbitrage trading, you need to have access to different forex brokers and monitor the exchange rates of different currency pairs. You can use software or trading platforms that offer real-time data and trading signals to help you identify opportunities for arbitrage trading.
How Does Arbitrage Trading Works
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Let say for example, you have $500,000 and you are provided with the following exchange rates: EUR/USD = 1.1586, EUR/GBP = 1.4600, and USD/GBP = 1.6939.
If you study the currencies provided above with their respective exchange rates, you will clearly see that there is an arbitrage opportunity at this present point, simply follow the sequence below:
Simply sell your $500,000 dollars to buy euros: $500,000 ÷ 1.1586 = €431,555
Now, Sell euros for pounds: €431,555 ÷ 1.4600 = £295,586
Then, Sell pounds for dollars: £295,586 x 1.6939 = $500,692
It’s time to calculate your profit and all you have to do is to Subtract the initial investment from the final amount: $500,692 – $500,000 = $692
With the calculation above, if you explore the market and perform the transaction as calculated above, you would receive an arbitrage profit of $692 (assuming no transaction charges or taxes). All required of you here is to repeat the steps and keep repeating it to make more profit.
This involved sourcing for different cryptocurrency exchangers and their rates for coins at a period of time. In this case, you will b working with two or more exchangers and this is very simple and straight forward. Let’s use Bitcoin for a typical example.
Your first assignment here is to spot a difference in the pricing of a digital asset across two or more exchanges and execute a series of transactions to take advantage of the difference. Very simple and straight forward
Let assume the price of bitcoin is $45,000 on A cryptocurrency exchange and $45,300 on B. In this case, a typical crypto arbitrage trader have been provided with the opportunity to spot the current disparity between the two exchangers and buy bitcoin on A and sell it on B to pocket the $300 price difference. This is a typical example of a crypto arbitrage trade.
If you remember, I said arbitrage trading can as well be referred to as a form of investment in the previous part of this guide on how to start arbitrage trading in Nigeria and any part of the world, with the samples that have been revealed so far, it’s obvious that capital is the most important thing in starting your journey to arbitrage trading business.
Another example is spotting a platform that allows you to buy cryptocurrencies with dollar, once you spot this platform, your primary assignment here is to compare the exchange rate of this platform to your local Bank exchange rate. This example is much active for Nigerians alone and will not work if your country local currency is either dollar, Euro or pound.
On this method of arbitrage trading, we will be making use of our local banks and two different cryptocurrency exchangers. The first step is to spot the platform that allows you to fund your account in dollar with your naira card at the rate of your local Banks standard rate.
The second step is to spot the exchanger that that allows you to withdraw to your Nigeria bank account without any form of issue and the third step is to shoot your shot. This is where the money is being printed.
This method is very simple and easy as compared to other method and it guarantee a very high income on a single transaction. Don’t worry, I am going to give you a typical example of this type of crypto arbitrage trading.
The two crypto exchange platform I am going to be using in this section are Coinbase and binance. Binance is a crypto exchange platform that is trusted by millions of users worldwide. Once you register on the platform and verify your account, you will be able to buy Bitcoin, Ethereum, ChainLink, Rune, Cardano, Binance Coin, SHIB, and lots of alt coins, all with some of the lowest fees in crypto. Additionally, the platform allows you to explore awesome art and collectibles on Binance NFT marketplace!
Coinbase on the other hands is also a trusted crypto exchange with over 89 million users across 100+ countries worldwide. Coinbase allows you to securely buy, hold and sell cryptocurrencies like Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin and many more on it’s easy, user-friendly app and web platform.
As at the moment of writing this complete guide on how to start arbitrage trading in Nigeria, Coinbase allows individuals to fund their Coinbase wallet with with their Bank card with dollar exchange rate of 416 naira/$. On the other hand, USDT is trading at 597/$.
In this case, our primary aim is to convert our naira to $ at the rate of #416/$, convert the dollar to USDT and convert the USDT to naira at the rate of 597/USDT, how can that be possible? Follow the instructions below.
Register on Coinbase and get your account verified, do same on binance. Now fund you Coinbase account with your bank card. Let assume you want to start with just $100, when you fund your Coinbase account with your bank card, $100 will be equivalent to 100 × 416 = 41,600.
Now, look for a coin with low transfer changes, example of this coins is Tron(TRX) but for the purpose of this guide, I am going to be using XLM as an example. Simply buy XLM worth of the $100 and transfer the XLM to your binance account.
Once you get the XLM on your Binance account, go to market place and select the correct pair, which is XLM/USDT. Sell the XLM for USDT and at this point, you have successfully convert the $ to USDT, the next step is to convert it back to naira.
When you convert back to USDT, you might not get up to 100 USDT, let assume you got 97 USDT, you will be selling it to naira on binance at the rate of 597 per USDT. 597 × 100 = 59,700 naira. Now, subtract your initial investment amount from the final amount, this will be 59,700 – 41,600 = 18,100.
Now, with the investment of 41,600, you have successfully receive an arbitrage profit of 18,100 naira, doing what will not even take you more than few hours. Repeat the steps and make 18,000 repeatedly to your Nigeria bank account.
This is the reason why I said that the concept above is the most profitable strategy in cryptocurrency arbitrage trading and looking at the profit made from the calculation above, you will agree with me that there’s no other tactics that could fetch you More than that with such little effort and zero trading knowledge.
Note: You must fully understand that Coinbase is just one out of the thousands of exchange with this kind of crypto arbitrage opportunity, when you do your own research, you will detect even more platform that are more rewarding.
Issues related with this type of crypto arbitrage Trading
I understand that having gone through the break down above, you will be wondering if there’s any risk or problem associated with this type of arbitrage trading. Worry no more, I will just go straight to the point and reveal the problem that trader do face while shooting their arbitrage shot with this strategy.
The main issue is that, these platforms sometimes select cards and you might have to try different cards before you finally see one that is working smoothly. Secondly, there is limit to the amount of dollar you can purchase with your cards on a monthly basis, but not to worry, once you found a card working for a particular platform, you can negotiate with family and friends using this cards and fund your account using theirs in conjunction with yours.
Dollar arbitrage Trading
Having gone through three different methods of arbitrage trading, I will be adding dollar arbitrage trading as a bonus for you guys. How is this a bonus? It’s a bonus because it’s very simple, easy and rewarding as that of the second sample revealed in the Cryptocurrency arbitrage trading.
However the dollar arbitrage trading I am going to reveal in this guide is strictly for individuals who reside in Nigeria and have a Nigeria bank account to fund the trading and withdraw their investment with their profit. On this note, I have create a separate guide for you on how to start the dollar type arbitrage trading in Nigeria.
You might be thinking that I have revealed this method in the just concluded above, but no, this one is different from the previous one, it doesn’t need any crypto exchange platform and all you have to do here is to purchase Dollar directly and convert it back to naira with the help of the trick that will be revealed to you by browsingtechzone in the guide.
How to start arbitrage trading in Nigeria
Having gone through the detailed information about arbitrage trading and as well as different types of arbitrage trading that exists with the typical example of each, you should have fully understand how the business works and all you need to get started with your arbitrage trading business and start making cool cash with little to no stress.
Requirements for arbitrage trading
All you have to do is to read the above guide carefully and fully understand it’s content, with this, you will be able to deduct by yourself and for yourself, all you need to start arbitrage trading in Nigeria. However, for clarification purposes, I will be outlining some of the basic requirements in cryptocurrency arbitrage trading and arbitrage trading at large.
1. Ability to do proper research:
being a good researcher will greatly helps you in being a good trader and makes arbitrage trading a profitable one for you. This is because you need to detect an opportunity that allows arbitrage trading before you can even decide to shoot your shot.
Also, if you go through the guide about carefully, you will fully understand that browsingtechzone emphasized the importance of spotting a good chance for this type of trading and a proper research is what gives you the opportunity to spot these opportunities.
2. A good smart phone
Of course, I believed you have one and that is the reason why you have access to this guide in the first place, but regardless, the importance of a good smart phone cannot be over emphasized, as far as how to start arbitrage trading in Nigeria is concerned.
Make sure your phone is in good condition before starting a trade. If you’re using a phone with lesser than 2GB Ram, make sure you free considerable space on your phone before getting started with any trades. This will prevent your phone from hanging when you’re in a trade. Above all, make sure you have good internet connection and always be sure you have enough data on your phone before getting started with the trade.
Other requirements depends on the type of arbitrage you want to trade at the moment, the requirements of that of triangular dollar arbitrage trading is different from that of crypto arbitrage Trading and that if crypto arbitrage Trading is different from that of the crypto dollar arbitrage trading and so on.
But one thing I am sure of, is that, the requirements for each type of arbitrage trading are well outlined in their respective typical example and if you read them carefully, I am surely sure that you won’t have any issue with them.
The aim of this guide is to show you how to start arbitrage trading in Nigeria and I am sure the guide has successfully fulfilled it’s purpose. With the multiple example revealed in this guide and different illustration, I am sure you should be able to get started with your arbitrage business journey without any form of issue.
However, you might have some questions after reading the guide or need clarification to some points made Within the guide, fee free to drop you questions in the comments section of this guide.