Common Mistakes to Avoid in Crypto Arbitrage Bot Development

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One of the most common mistakes in crypto arbitrage bot development is ignoring latency and execution speed, which can wipe out profits instantly. Many developers also underestimate exchange fees, slippage, and withdrawal delays, making strategies look profitable only on paper. Poor error handling and lack of fallback mechanisms often cause bots to fail during API downtime or market volatility. Another major mistake is skipping proper backtesting and live paper trading before deployment. Lastly, weak security practices, such as improper API key management, can lead to serious financial losses. Building a reliable bot requires realistic assumptions, robust testing, and strong risk management.