Uncle Dai’s Arbitrage Tutorial

5 min readAug 3, 2018

This is a screenshot of a multiple successful arbitrage using SWFT Blockchain platform App

After the I wrote my first cryptocurrency arbitrage tutorial, I felt that I still needed to add something to it. This is where this paper comes in — containing clearer and more complete instructions. Please read it carefully and try to practice as much as you can. Let’s get started.

SWFT has published many App Tutorials before, which can be found on their YouTube and Medium accounts. My goal here is to tell you how to arbitrage and make money. If you need to get started from scratch, please read/watch SWFT’s tutorials.

Visit SWFT for previous tutorials

Arbitrage on SWFT Blockchain: The Opportunity in Volatility

Why SWFT?

SWFT is a real-time cryptocurrency exchange software. Some users may say that it is useless since Binance offers the same function. Well, not really. Platforms like Binance only exchange BTC, ETH, and USDT, with other currencies. In this kind of platforms, if you have ETC in hand and are optimistic about LTC’s performance, what should you do?

First, you would have to exchange your ETC for some BTC, ETH, or USDT (Sell ETC). Only after that, you could get the LTC using one of the intermediaries (Buy LTC).

Isn’t it troublesome?

Well, if you use SWFT APP, you can exchange your ETC for some LTC in only one step.

Let’s add some specific cryptocurrency exchange details here. Continuing with the ETC to LTC example, as we go to a platform to buy and sell, we want to sell our ETC at a price peak and buy the LTC when prices are lower. This may be human nature, but it often makes us miss incredible opportunities. One reason for that is the trading volume. We overthink the amount of cryptocurrency to sell and buy, and crucial time passes.

SWFT can help you with this problem to some extent, as it is fast, and the system fixes the volume of each transaction according to the market depth. You can choose how much to redeem within this transaction volume, and then you can click OK, input the password, and done — sold it in five seconds.

SWFT Arbitrage Ideas

The following is a practical exercise in which I use the SWFT APP to exchange coins, and then use the Huobi platform for arbitrage. Keep in mind that this is only the tip of the iceberg.

First, look at the picture below:

What is SHE? I don’t know this cryptocurrency before seeing that the SWFT APP currently supports its redemption. (The SWFT APP now supports exchanges between 34 coins.) The screenshot shows the variation I got in SHE after trading 300,000 SWFTC three times.

Why SHE? Why exchange this way? Why only three times? I will answer these questions one by one.

Why SHE?

Evidently, it is not because “I love this coin.” The real reason is that I believe this cryptocurrency may go up. After all, it has been going downwards for a long time. Maybe you have inside information, or you are a veteran speculative practitioner (I may be one). These can be reasons for changing it.

Why exchange this way?

The first transaction was on July 3rd, and I received only 142,800 SHE. I made the second transaction two days later, July the 5th, and received 168,474 SHE. Why? Because either SWFTC went up a little, or SHE went down little. This is called a “cover short position”. On July 12th, however, I exchanged for 178,859 SHE. This is what I had to do.

Why only three times?

Because SHE went up a little while SWFT went down a little. In short, the exchange rate will not be greater than 190,000, or above what I profited.

Careful readers may have discovered that the coins I exchanged have been withdrawn. Why and where did they go?

Because I got 488,737 in three times, which is a relatively large amount. The ultimate purpose of our currency exchange is to exchange back. As I said before, the system fixes each transaction volume according to the market depth. If I exchange such a large volume back, I will need to make several transfers, which means I will miss the perfect timing! If the volume, however, is as small as 48,873.7, then you don’t have to waste time and transaction fees, and you can exchange it using the APP directly. The currency has been transferred to Huobi only because the trading of the two currencies, SHE and SWFT, is supported on Huobi.

Finally, let’s talk about exchanging back.

Arbitrage result

Why do I want to exchange back? I only get my 300,000 SWFTC back. SHE will not be a concern from here on.

Please look at the picture below.

After 23 days of waiting, SHE suddenly rose sharply, as I expected. As a senior user of the SWFT APP, I did not let go of this once-in-a-lifetime opportunity, and I sold all the SHE coins. To remind you, after selling, you must quickly buy the 300,000 SWFTC that you originally sold.

Getting to the bottom line: How much did I earn with this arbitrage?