What are tickers and why do we need stabelcoins? How to use trading stack and why you should be careful with margin? Answers to these and other questions in joint cards with Bybit crypto exchange
Choosing an exchange
Before investing in cryptocurrency, you need to choose the right exchange. Among the important factors is the history of the exchange. It is worth making sure that the site successfully works not the first year, and users do not complain about problems with the withdrawal of funds. Otherwise, you can lose your money.
One important factor to pay attention to is the interface. It should be clear and easy to use. It is also necessary to check the volume of trades and choose only large sites.
Another important factor
When choosing an exchange, it is important to consider the number of trading pairs. The more there are, the greater the opportunities for trade and investment. For example, the Bybit exchange has more than 100 trading pairs and new ones with proven and promising altcoins are added every week.
However, too many assets can be a bit wary. Sometimes trading platforms add a lot of little-known projects - this is one way to make money. Users risk investing in a fraudulent token. Pay attention to the capitalization of the project.
Why a pair
Assets are traded against each other - in pairs. For example, the current bitcoin price of $56k is the cryptocurrency's trading pair with the U.S. dollar. The currency that stands first is called the base currency. In this case, it is bitcoin. The second currency is called the quoted currency (the dollar).
Trading pairs originally appeared with the formation of the forex market in 1978 after the IMF allowed national currencies to drop their peg to the dollar and the gold reserve.
Tickers
For convenience, cryptocurrencies in trading pairs are indicated by tickers. This is a short designation. For example, the bitcoin ticker is BTC, Tether is USDT. A bitcoin and Tether trading pair would look like this: BTC/USDT. For each pair, the exchange can add an "i" button with a short help, like on Bybit.
Tickers on all crypto exchanges look the same. This is to avoid confusion. However, it sometimes happens because of the similarity of tickers. For example, the ticker of the cryptocurrency Bitcoin Cash is BCH, so it can be confused with bitcoin (BTC).
How to choose a trading pair
There are several features you should pay attention to when choosing a trading pair. We will dwell on them in more detail in the following cards.
Stopping at 2-3 trading pairs would be wrong, although it may seem safe to do so. It is worth examining the tokens of the most discussed tokens from time to time.
Currency or Stablecoin?
Cryptocurrencies are traded in pairs with Stablecoins like USDT, which we already mentioned. This is a tokenized U.S. dollar. Such contracts are called linear contracts. But there are pairs with the original fiat currency, such as the dollar (USD). On the Bybit exchange these are inverse contracts.
If the goal is to fix profits but leave them in cryptocurrency, you can use trading pairs with USDT or other stabelcoins. However, if the purpose of selling is to withdraw funds, it may be easier to choose pairs with USD.
Liquidity
Liquidity is the property of an asset to be sold as quickly as possible at a price close to the market average. It is necessary to choose liquid pairs in order to be able to make a deal quickly. Major exchanges have consistently sufficient liquidity in popular pairs.
The liquidity of a trading pair is one of the most important factors. Often crypto exchanges delist pairs that do not pass this indicator.
Trading glass
If there are a lot of identical buy and sell orders in the market glass, it may indicate inflated volumes. You should also make sure that the particular trading pair will be able to meet the user's demand. Pay attention to the data of popular market aggregators.
An "empty" cup can lead to the fact that even a small transaction in terms of volume will lead to a sharp increase or collapse of the exchange rate.
The terms of margin trading are different for each exchange. You must read them carefully before you start trading. Read more about the risks of margin trading and money management in the Bybit Education course.
Repeating
You must first decide on the exchange you want to trade on. Then, you need to carefully study trading pairs. It is necessary to work on large exchanges with liquid pairs, to reduce the risks. You should also pay attention to the mart and determine the quoted currency.
If you follow the simple rules described in the cards above, you can make your trading more effective and safer. The experienced traders at Bybit Community can help you choose the most relevant trading pairs and warn you against scam projects.
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