Most arbitrage mistakes happen because traders focus on the visible percentage and ignore the mechanics behind it. Good traders are selective: they check fees, liquidity, timing, exchange status and their exit plan before acting.
Trusting raw spread and ignoring fees
A 2% spread can be useless if the coin is illiquid or withdrawals are closed.
Chasing illiquid pairs
Low-volume coins can show large spreads precisely because nobody can trade them at size.
Entering too late or over-leveraged
Funding opportunities attract crowds before payment, and the spread can move against latecomers.
No exit plan and wrong-asset assumptions
Some traders open without knowing how they will close, and some assume two similarly named symbols are the same asset.
A 2% spread can be useless if the coin is illiquid or withdrawals are closed. A smaller spread can be better if it is stable, deep and cheap to execute. The goal is a tradable spread, not the biggest number.
Low-volume coins can show large spreads precisely because nobody can trade them at size. Entering these often means heavy slippage on entry and an even worse exit.
Funding opportunities attract crowds before payment, and the spread can move against latecomers. Others over-leverage because the trade feels hedged, forgetting that one leg can still liquidate.
Some traders open without knowing how they will close, and some assume two similarly named symbols are the same asset. Both mistakes can turn a good-looking spread into a stuck or fake trade.
Slow down and clear this checklist before a bright percentage pulls you into a bad entry.
Because the visible percentage ignores fees, slippage, depth and timing. Once those are counted, a large raw spread can turn into a negative net result.
No. A large spread on an illiquid pair is often untradable. A smaller, stable, deep spread is usually the better trade.
Two exchanges can list similarly named tokens that are not the same asset or use different chains. Trading them as if they were identical can trap the position.
Checklist / Funding
A practical pre-trade checklist for funding arbitrage: funding direction, next payment time, liquidity, spread, fees, leverage, and exit plan.
ReadFees / Net profit
Understand the costs that decide whether an arbitrage trade is real: maker fees, taker fees, funding payments, withdrawal fees, and hidden execution costs.
ReadAdvanced / Mean reversion
Learn how z-score helps traders identify unusually wide spreads, avoid random entries, and plan exits when the spread returns closer to normal.
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