What is CryptoCurrency Pair Trading? How to use it Effectively?


All exchanges work slightly different, but fundamentally they all operate in the same way. Moreover, some strategies in crypto trading are known to provide more and more benefits to wise traders. For example, pair trading of crypto assets is among the most widely known trading plan. But still, thousands of traders are unaware of this genius trading plan.

This article will take you through all the steps needed to successfully undertake cryptocurrency pair trading. It is easy and payment efficiency resolution to make more money with cryptocurrency involving multiple recipients and crypto pair trading. A brief about crypto pair trading is provided here, with additional knowledge about this strategy.

Crypto Pair Trading Defined

Cryptocurrency pair trading is a type of speculation that involves opening up buy and sell orders for both sides of the same trade. Unlike Forex trading here, the action is undertaken on an exchange hoping that the price will make it to the desired level before orders are closed. It has become increasingly popular amongst traders because it has high liquidity, low fees, and faster transactions.

A cryptocurrency pair trade allows you to liquidate your profits while maintaining an opportunity to earn more in the future. For example, if you opened up a buy order for Bitcoin (BTC) at $1000 and opened up a sell order at $1100, you would be involved in a BTC/USD pair trade. The action is undertaken, hoping that the price makes it to your desired level before your orders are closed.

How to use Pair trading to make more money?

To successfully undertake cryptocurrency pair trading, you have to have a good awareness of the market trends and predict how it will progress. The whole idea is that you buy at a low price and sell at a high price whilst collecting the difference between at a multiple recipients platform. In theory, this could be a very easy strategy to make money from, but in reality, it is not quite so easy.

You need to consider all of the various factors that will affect the price of a coin before making a trade. When you trade in a pair, you will open up two orders. The buy order will be for the current exchange rate, and the sell order will be slightly higher than that.

Margin between Buy and sell Rates

You can't choose which rates you want, but rather, the exchange automatically sets these based on the current price. There is only a small difference between the two rates, but this is made up for by fees and spread. When both orders are filled, then your trade is complete, and your profit/loss would need to be calculated and transferred into your account. This can be understood simply as an online barter system where you buy at less and sell at more to make profit.

This is a convenient and effective strategy for every trader to explore and start making their hands in making money with multiple recipients and crypto pair trading.