There are several reasons why arbitrage trades often fail. Before delving into the various reasons, it is important to know that the arbitrage bot is a complex trading bot that always needs to be monitored. We always recommend starting with the regular trading bot as it is easier to configure and manage.
Not enough balance
When using arbitrage, you always deal with 2 trades for exchange arbitrage and 3 trades for market arbitrage. In both situations, you may encounter the message 'Not enough balance.' In the trading bot output at the bottom of the Arbitrage Dashboard, you can see on which crypto exchange you lack funds.
Example output message:
04/09/2024 12:22:33 PM INFO Not enough BTC balance to make buy order on Kraken. Needs 0.00080731, have 0.00069408.
Cancelled in orderbook matching
The prices for the currencies you trade can change rapidly. So rapidly that the trading opportunity spotted by the arbitrage bot is no longer profitable. You will then receive the following arbitrage output message:
03/10/2024 1:39:08 PM INFO Arbitrage cancelled in orderbook matching on Kraken. Cannot fulfill and fix arbitrage based on orderbook. Profit: -0.56%.
There is not much to do about this, and it can result in bags. Only trade currencies in which you have confidence and are comfortable holding positions.