Trading pairs in the cryptocurrency ecosystem refers to two digital assets that are paired on an exchange for trading. Examples of trading pairs include ETH/BTC, ETH/EOS, BNB/BTC, BNB/ETH, etc. With these trading pairs; you can use one of the base currencies to buy the other one. In other words, instead of trading fiat for cryptocurrency, you can also trade crypto for other cryptos.
The base currency
When trading pairs, you must start with a base currency. A base currency is the one that you will use to buy other cryptocurrencies that are paired with it. Bitcoin is the most popular base currency but you can also use Ethereum, BNB (if you are on Binance), etc. When deciding on which base currency to use, you have to think about the different pairs the base currency supports. You want a base currency that has the highest number of trading pair in order to have as many options as possible. Additionally, you need a base currency that is easy to buy. Bitcoin and Ethereum are currently the easiest to buy using fiat and this explains why they are the most popular base currencies for most traders.
An exchange is a platform that gives traders a marketplace for buying and selling their cryptocurrencies. You will, therefore, need to create an account with a cryptocurrency exchange. Before signing up for an account with the exchange, remember that you will only be able to buy cryptocurrencies on the exchange using your base currency. There are quite a number of exchanges that you will most likely be spoilt for choice. One of the strategies traders use is arbitrage. This is where you leverage on the price differences across the different exchanges and make a profit by buying and selling almost simultaneously across the exchanges. Executium.com provides the best platform for implementing this strategy. Doing price analysis in a microsecond is not humanly possible but the algorithms can do it easily. With the right system, you can easily make consistent profits as a crypto trader.
Monitoring your gains as a cryptocurrency trader can be somewhat confusing - which is why you should monitor the prices of the digital assets by checking their USD value. For instance, if you use your BTC to buy some XMR, you can keep tabs with how your investment is doing by checking the XMR value in dollars. Most cryptocurrency exchanges have charting software that allows you to do this but the most popular resource for quickly checking the value of any cryptocurrency is coinnmarketcap.com. But you can also use your base currency as a valuation tool for the coins you have bought. For instance, if you use BTC as your base currency to buy an altcoin when the altcoin value goes up, it means you can use it to buy more bitcoin than the amount you spend on the altcoin. This is actually what most traders do in order to grow their accounts. If you know what you are doing, you can start with just a couple of Bitcoin and end up with lots of Bitcoin and lots more altcoins.