#TradingPairs101

#TradingPairs101

Trading pairs represent the two assets involved in a transaction, where one is exchanged for the other. Here's a quick overview:

๐Ÿ”น Types of Trading Pairs:

1. Fiat Pairs โ€“ Involve a cryptocurrency and a fiat currency (e.g., BTC/USD).

2. Crypto Pairs โ€“ Involve two cryptocurrencies (e.g., BTC/ETH).

๐Ÿ”น How Trading Pairs Work:

Base Asset: The asset you're buying or selling (e.g., BTC in BTC/USD).

Quote Asset: The asset you're using to buy or sell the base asset (e.g., USD in BTC/USD).

๐Ÿ”น Why Trading Pairs Matter:

1. Liquidity โ€“ The number of trading pairs can influence how easily assets are bought or sold.

2. Price Discovery โ€“ They help establish the current market value of assets.

3. Opportunities โ€“ Multiple pairs create room for diverse strategies and arbitrage.