What factors should I consider when choosing cryptocurrency trading pairs?

1 answers

• Dec 30, 2021 · 3 years ago
  When choosing cryptocurrency trading pairs, one factor you should consider is the correlation between the pairs. If two pairs have a high positive correlation, it means they tend to move in the same direction. This can limit your diversification and increase your exposure to a single asset. On the other hand, pairs with a negative correlation can provide better diversification and risk management. Additionally, consider the market depth of the pair. A pair with a shallow market depth may be prone to price manipulation and sudden price swings. Lastly, consider the availability of trading pairs on different exchanges. Some exchanges may offer a wider range of trading pairs, giving you more options to choose from.
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