#TradingPairs101
Trading pairs are the foundation of exchange activity, representing the relationship between two tradable assets. For instance, in the BTC/USDT pair, you’re trading Bitcoin against Tether. Understanding trading pairs is essential for navigating markets efficiently, especially in volatile environments. Pairs can be quoted as fiat-to-crypto, crypto-to-crypto, or even stablecoin-to-crypto. The "base" currency is what you are buying or selling, while the "quote" currency tells you the value of one unit of the base. Traders use cross-pairs to perform arbitrage or hedge strategies without converting to fiat. Advanced traders even triangulate across pairs to exploit pricing inefficiencies. On DEXs, pairs are tied to smart contracts and liquidity pools, with prices determined algorithmically. Choosing the right trading pair affects not only price but fees, slippage, and execution time. Strategic pair selection can thus amplify profits or hedge risk, making this fundamental concept a strategic tool in any trader’s arsenal.