I understand making a profit via arbitrage trading between multiple exchanges. I understand what spread is (gap between the bid & ask). How can one make profits by leveraging this spread within a given exchange? Good examples will be helpful. Thanks
If the spread is $40 you will buy $1 above ask price, then when fulfilled immediately resell the btc at $1 below bid price. You keep $38 profit per btc
I don't have enough rep to comment on Robert's answer but to clarify what he was saying would be that you would put limit orders in front of all the other orders available on the current order book. You would not be able to execute any order "immediately" as you would then be making a market order.
Now, this is how most exchanges work for currency trading, commodities, stocks but crypto exchanges work differently, there is no spread, the exchange takes a percentage of every trade.
For eg. if the fees are 0.2%, then if you buy 1BTC @ $10,000, you will receive 1 BTC but it will cost you $10,020 ($10,000 * 0.002 = $20 fee). You would then need to sell it at at least $10,040.04 just to break even ($10,020 * 0.002 = $20.04)
I would VERY STRONGLY caution anyone looking to forums to find investment advice and anyone telling you what to do should most likely not be listened to. Before making any investments I would recommend finding a site that allows you to sign up with a free dummy account with fake money to practice trading, this will give you a better idea of how things work, the fees involved in each trade and if a given system works for you. Unfortunately I don't know of any crypto sites that let you do this, however there are many foreign currency exchange sites that do, although the system and fee structure is different it will give you a better idea overall of how markets work. If anyone knows of any crypto sites then please comment as I would like to know myself.