#TradingPairs101

Trading Pairs 101: Beyond the Obvious.

Trading pairs are the foundation of any financial operation: you buy or sell a base currency using a quote currency. For example, in BTC/USDT, you are buying or selling Bitcoin (BTC) with Tether (USDT). This seems simple, but the choice of the pair is more critical than it appears.

Liquidity varies greatly between pairs. A pair with high liquidity allows for quick transactions without large price fluctuations, while one with low liquidity can result in significant slippage and hinder order execution. Additionally, spreads—the difference between the buying and selling price—can be larger in less liquid pairs, affecting your profits. Understanding these dynamics is crucial for optimizing your trading strategies.