$ETH

#TradingPairs101 Mastering Trading Pairs in Crypto: #TradingPairs101

Choosing the right trading pairs is essential for a successful strategy. Understanding the interaction between the base asset and the quote asset is key to making informed decisions.

A trading pair, like BTC/USDT, works like this: the first asset (BTC) is the base, what you are buying or selling. The second (USDT) is the quote, the currency in which the price of the base is expressed. If the price is 60,000, it means that 1 BTC costs 60,000 USDT.

Personally, I predominantly trade in pairs denominated in stablecoins (e.g. BTC/USDT, ETH/USDT). The reason is the stability of USDT; being a stablecoin pegged to the dollar allows me to measure my gains and losses clearly without the additional volatility of, for example, BTC/ETH. This simplifies risk management and accounting.

To choose the right pair, I consider several factors:

* Liquidity: I always look for pairs with high trading volume to avoid slippage.

* Volatility: Depending on my strategy, I may seek more or less volatile pairs.

* Technical Analysis: I study the pair's history to identify patterns and key levels.

* News and Fundamentals: I consider events that may affect either of the assets in the pair.

A clear example was when I traded LINK/BTC instead of LINK/USDT during a Bitcoin bear market. Although LINK rose against BTC, my total investment in dollars decreased because BTC was falling faster. Since then, I value the stability that stablecoins offer for the base of my trades.

What factors do you consider when choosing a trading pair? Share your approach!