I recently found out about this form of trading, but never tried it. Can anyone with experience give me some hints?
yeah, don't do it. specially if you are new to trading in general it is best to stick to regular buy low sell high strategy!
I mean is this algorithm they use successful?
it is a strategy and yes it can be profitable (successful!). about 3 years ago i used to do it a lot in altcoin market. there is a lot of problems that you will face.
the first one is speed. Arbitrage requires being super fast so you will need a bot. i was using my own bot that i made and it was profitable but not that much.
the second problem is spread. you have to pay attention to the buy orders and sell orders. you want to buy from a sell order and sell to a buy order somewhere else. and those are the prices that you should consider.
the third problem is volume. usually it is not high enough to cover the risk and give you good profit specially if the price difference isn't that high.
and finally it is the issues with exchanges. sometimes the price difference happens just because the exchange has some issues. wallet not working, pulling a scam,...
And is it true about having big gains?
not at all.