Starting out in arbitrage trading? Learn from others' mistakes! We'll show you the common blunders to avoid, so you can protect your budget and set yourself up for success.
1. Incorrect wallet address.
Beware of a common rookie mistake: entering the wrong wallet address for your cryptocurrency recipient. It's easy to get it wrong due to jitters, haste, inexperience, or other factors. But the stakes are high: a single character error can result in lost funds - gone for good once the transaction is confirmed.
Take a deep breath and slow down when entering that address! Instead of typing it out, copy and paste the address to minimize the risk of typos. And don't be afraid to double-check (or triple-check!) the address - it's better to be safe than sorry. This simple precaution can save you from losing your funds.
Check the recipient's wallet type before sending crypto - ensure you're sending the right coin to the right wallet!
Taking a few extra minutes to verify and exercise caution when transacting can safeguard your valuable cryptocurrency from potential losses.
2. Choosing an exchanger with slow transaction processing times.
Processing a digital asset transaction is an intricate process with multiple stages involved. Plus, transfers between exchangers can be quite slow and take a while to complete.
Usually, a transaction gets held up for a long time because the set commission fee is too low. This means it can linger on the waiting list for a really long time, constantly getting bumped by newer transactions, and sometimes even getting stuck for weeks on end.
Even with a standard fee, payment processing can take a while if the network is overloaded.
Don't risk losing your funds or getting them stuck for days. Before transferring money, research the exchanger thoroughly. Simply search for the exchanger's name online and read reviews from other users. It's better to take your time and do your due diligence, especially if you're new to this. It may seem like a hassle now, but it'll pay off in the long run when you can confidently trust the exchanger you've chosen.
What to do if your transaction gets stuck anyway?
When a transaction is stuck on a waiting list, there are several options to consider:
Just be patient and wait for confirmation (it could take a few days or even weeks to come through).
Wait for the transaction to be canceled, which means waiting for all pools to treat the transfer information as ‘invalid’ and delete it (keep in mind that there's no set timeline for this, but stats show it typically takes at least 3 days and only happens with very low fees).
You can speed up processing using various techniques like RBF, CPFP, Double-Spent, and others.
Use transaction boosters and services to help get a stuck payment moving again.
3. The exchanger doesn't guarantee a fixed rate.
Some exchangers don't lock in the exchange rate when you place an order. This means the rate can fluctuate, and the final amount you receive may differ from what you expected. The exchange rate and blockchain transaction fees can change rapidly, so the price could go either way - up or down. Let's face it, it usually goes down.
To avoid losing funds, use hedging. Read more about what it is and how to use it here: https://blog.krak.ai/post/hedging-in-crypto-arbitrage
4. The risk of getting scammed.
Scammers are always on the lookout for their next victim, trying to win your trust and get their hands on your money. We've written a helpful article on how to spot these threats and keep your funds safe.
Comments