#TradingPairs101

What is a Trading Pair and How to Understand it Correctly in Investment

In the world of finance and cryptocurrency, a trading pair is a fundamental yet extremely important concept. A trading pair represents the exchange rate between two types of assets – for example: BTC/USDT means you are using USDT to buy or sell BTC.

There are two common types of trading pairs:

1. Trading pairs with fiat currency (fiat pairs): Like BTC/USD, ETH/EUR... Easy to understand and friendly for newcomers as they use traditional currency units to value crypto or stocks.

2. Crypto-crypto trading pairs: Like ETH/BTC, SOL/BNB... Suitable for investors who want to convert between digital assets without needing to go back to fiat.

Understanding trading pairs helps you:

Read asset prices correctly: For example, BTC/USDT = 70,000 means 1 BTC is equal to 70,000 USDT.

Choose the right exchange: Each exchange has a different list of pairs.

Calculate profits/losses accurately: Especially when you trade through multiple intermediary pairs.

Knowing how to read and analyze trading pairs is the first step to trading effectively and avoiding unnecessary confusion.