Pair

What Is a Pair? 

Digital assets traded on cryptocurrency exchanges are in two categories: major pairs and minor pairs. Major pairs are the most traded digital asset pairs that involve the USD, such as BTC/USD and ETH/USD. On the other hand, minor pairs do not include the USD, such as BTC/ETH.

Cryptocurrency exchanges offer different pairs depending on the digital assets they list. For example, some offer BTC/USDT, ETH/USDT, BNB/USDT and USDT/USDT pairs, while other only offers BTC/USD, ETH/USD, LTC/USD and BCH/USD pairs.

When trading digital assets, it is essential to remember that each pair has its characteristics. For example, BTC is a volatile asset while Tether USD is a stablecoin pegged to the US dollar. As a result, the BTC/USDT pair is more volatile than the ETH/USDT pair.

Digital asset pairs are in three categories:

• Volatile pairs: These pairs are more volatile and offer more short-term trading opportunities. Examples include BTC/USDT, ETH/BTC and XRP/BTC.

• Stable pairs: These pairs are less volatile and ideal for long-term investment strategies. Examples include BTC/ETH, LTC/ETH, and BNB/USDT.

• Exotic pairs: These pairs are less traded and therefore considered to be riskier. Examples include NEO/ETH and ADA/BTC.

When choosing a digital asset pair to trade, it is essential to consider your investment goals and risk tolerance. If you want to make a quick profit, you should trade a volatile pair. However, if you are looking to invest for the long term, then you should trade a stable pair.

Factors Involved In Choosing Pair: 

Choosing a trading pair is influenced by many factors, some of which may be:

• The price of the asset

• The trading volume

• The volatility

• The liquidity

Pairs traded regularly are said to be liquid, while those not traded as often are said to be illiquid. A trader may choose a less popular pair to take advantage of the lower prices, but they may have to accept the increased risk that comes with illiquidity.