I get a lot of questions about Pair Trading, so it's time to answer them.

1. Which pairs should we choose?

First of all, which couples you choose depends entirely on your style. For example, the tokens you choose can be from the same ecosystem or different ecosystems. They can be similar protocols or different protocols. For example, the last LDO/AAVE Pair Trading I shared consists of two different tokens in the same ecosystem. However, someone else could pair trade UNI and JUP tokens from Uniswap and Jupiter (one on Ethereum and one on Solana), which are similar protocols. For example, if you think that the Solana ecosystem will become more prominent in the near future, you can open a long position on JUP/UNI.

2. When should we open or close positions?

When Pair Trading, you should ABSOLUTELY open and close positions for both different tokens simultaneously. The critical point here is to open both positions at the same time, otherwise the rate of this pair may change as market conditions will change. Therefore, you should open your long and short positions on time and at the same time.

3. How can I calculate the profit on my position?

It is very easy to check the total profit or loss of your position. You can use TradingView for this. All you need to do is type “=LDOUSDT/AAVEUSDT” in the search field in TradingView and then select the exchanges for each token. This way, you can track the LDOUSDT/AAVEUSDT ratio. Make a note of the position you opened and follow the next rates. Multiply the percentage change of the ratio by your total position and congratulations, you have calculated your profit! Or, add up the profits and losses of your positions directly on Binance.

4. What is the Advantage of Pair Trading?

When Pair Trading, you don't need to know the entire direction of the market directly. Because whether the market is going up or down, you can still make a profit with Pair Trading. This is because you will have both long and short positions when pair trading.