#TradingPairs101 In the world of trading (whether crypto, currencies, or stocks), you always trade in trading pairs. A trading pair is simply an asset that is valued in relation to another. It is the way to show how much of one currency or asset you need to buy or sell another.

They are expressed as Base Asset / Quotation Asset.

* Base Asset (first): It is the asset you are buying or selling.

* Quotation Asset (second): It is the currency or asset in which the price of the base asset is expressed.

Common Examples:

* BTC/USD (Bitcoin / US Dollar): This means that the price of Bitcoin is expressed in dollars. If you see BTC/USD = 70,000, it means that 1 Bitcoin is worth 70,000 dollars. When you "buy" this pair, you are actually buying Bitcoin with your dollars.

* EUR/USD (Euro / US Dollar): A currency pair (Forex). If EUR/USD = 1.08, 1 Euro is worth 1.08 dollars. Buying means you are purchasing Euros with dollars.

* ETH/BTC (Ethereum / Bitcoin): In crypto, sometimes you trade one cryptocurrency against another. If ETH/BTC = 0.05, 1 Ethereum is worth 0.05 Bitcoin.

Why are they important?

* They define value: They tell you how much an asset is worth in terms of another.

* They facilitate exchange: They allow buying and selling, as you are always exchanging something for something else.

* They indicate liquidity: Some pairs are much more liquid (traded more) than others, which affects the ease and cost of your trades. "Major pairs" (like EUR/USD or BTC/USD) are the most liquid.

Understanding trading pairs is the first step to making any trade, as all your transactions revolve around this fundamental concept.