Dear newbies, are you confused about trading pairs on exchanges? I got you covered.

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Dear newbies, are you confused about trading pairs on exchanges? I got you covered.

Today alone, I've seen two posts from newbies asking about why there are multiple trading pairs for a coin they are interestede i and which one they should chose. I completely understand that, I was confused about that in the beginning as well. Let me try to explain.

On exchanges like Binance, for some coins there are many trading pairs. For a popular coin – let's say ficticious Examplecoin (EXA) – there are often more than 10 different ones, including EXA/EUR, EXA/USDT, EXA/BTC and EXA/BTC. What do they mean? Well, the first part of the pair is always EXA, the coin you want to buy. The second one, is the coin or currency you want to buy it with.

The prices look very different, right? They are not. Of course you can buy much more EXA with one BNB than with one USDT, but that's just because BNB is worth like $660 currently. So you get the same amount of EXA for your money, no matter which pair you choose. Well, almost: you should consider fees.

If you don't hold any of the cryptos that are listed as trading pairs yet and can buy directly with the fiat currency of your choice (like EXA/EUR above) that's probably a smart move – because in all other cases you have to buy some crypto first before you can buy EXAand pay fees twice. If you don't (or your fiat currency is not available), your second best option is probably the exchange coin (BNB in Binance's case), because the fees are lower if you pay them in BNB (technically, you can also pay the fees in BNB if you choose another trading pair, but only if you have BNB in your account. so if you have some and have the option to always pay in BNB enabled, it doesn't matter which pair you choose).

If neither fiat nor the exchange coin are available, just pick any, buy that coin and then exchange it for the coin you want (EXA in our example). Stablecoins like USDT have the advantage that they don't fluctuate and others like BTC might theoretically go up or down a bit in the minute it takes you between your first and second trade, but that should not make much of a difference.

tl;dr: it doesn't matter all that much which pair you choose to buy the coin you want to buy. You always buy the same coin for the same price. The only thing you might want to consider are fees, so if there are multiple pairs the best idea is probably buying directly with your fiat currency, if that's not available the exchange token (like BNB, KCS), and if that's not available anything else.

submitted by /u/_martinshkreli_
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