Strategies Guide
Three trades, one exchange, zero transfers. Triangular arbitrage loops price inefficiencies between trading pairs.
Updated 2026-10-05 · 8 min read
Triangular arbitrage is a self-contained loop of three trades on a single exchange. You start with one asset, trade through two intermediate pairs, and end up with more of the original asset than you started with — all without moving funds between exchanges.
Because everything happens inside one order book, there is no withdrawal wait and no transfer fee. That makes triangular arbitrage one of the most accessible strategies for beginners — and one of the most competitive, since bots watch these loops constantly.
Imagine an exchange listing three pairs: BTC/USDT, ETH/USDT, and ETH/BTC. The loop goes:
Concretely: start with $10,000 USDT. Buy BTC, convert to ETH via the ETH/BTC pair, then sell ETH for USDT. If the implied cross-rate differs from the direct rate by more than your total fees (three taker fees, typically ~0.3% combined), the loop is profitable.
| Challenge | What it means |
|---|---|
| Three taker fees | Every leg usually crosses the spread — ~0.1% × 3 adds up fast. |
| Leg risk | If leg 2 moves before it fills, the loop breaks and you hold an unwanted asset. |
| Bot competition | HFT firms run the same loops in milliseconds; retail sees leftovers. |
| Minimum sizes | Dust limits on small pairs can block the exact quantities you need. |
Do the math before every loop
A triangle showing 0.25% gross edge with 0.3% in combined fees is a guaranteed loss. Profitable retail triangles typically need 0.5%+ gross edge — rare, brief, and worth practicing in simulation first.
Profitable triangles require checking hundreds of pair combinations per second — a job for software. Scanners built for crypto arbitrage opportunities compute implied cross-rates continuously and surface only loops whose edge survives fees. New to the terminology? The glossary covers every term used here.
No — that is its main advantage. All three trades happen on one exchange, so one funded account is enough and there are no blockchain transfers.
Yes, and at any serious scale it must be. The windows are seconds long, so most practitioners use bots with pre-computed loops and instant execution.
After all fees, retail traders generally look for at least 0.2–0.5% net per loop. Anything smaller is usually noise once slippage is included.
Crypto Arbitrage Scanner detects triangular loops in real time across 16 exchanges — and the paper trading bot lets you practice risk-free.
Start Free 3-Day Trial