#TradingPairs101

*Trading Pairs*

A trading pair consists of two assets traded against each other. This concept applies to various markets:

1. *Currency Pairs (Forex)*: You buy one currency and sell another, like EUR/USD. The price indicates how much of the quote currency (USD) is needed to buy one unit of the base currency (EUR).

2. *Pairs Trading (Stocks/Assets)*: A market-neutral strategy where you buy one asset (long) and sell another (short), typically highly correlated stocks/securities. The goal is to profit from temporary price divergences and convergences.

*Examples:*

- Forex: EUR/USD, USD/JPY, GBP/USD, AUD/USD

- Stock Pairs Trading: Buying Stock A and shorting Stock B if they normally move together but have temporarily diverged in price.