Why do pair traders always use two legs? 🦵
🔹 A "leg" is simply one of the two positions in a pair. The second leg removes a significant part of the overall market movement.
🔹 Without a pair, you bet on the price of a single coin. With a pair, you bet on the ratio between two coins.
🔹 The legs must have a real connection. A random second coin hedges nothing—it is just another bet.
🔹 Remember: two legs mean two entry fees, two exit fees, and two funding payments.
📈 Example: The whole market rises. Coin A jumps 6%, and coin B rises 5%. Long A (+6%) and Short B (-5%) give you +1%. The general market growth barely affected your result.
⚠️ Mistake: Picking two random coins "for hedging." Without a real link, the second leg only adds extra risk.
Why do you think a random second leg fails to protect your position?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
🔹 A "leg" is simply one of the two positions in a pair. The second leg removes a significant part of the overall market movement.
🔹 Without a pair, you bet on the price of a single coin. With a pair, you bet on the ratio between two coins.
🔹 The legs must have a real connection. A random second coin hedges nothing—it is just another bet.
🔹 Remember: two legs mean two entry fees, two exit fees, and two funding payments.
📈 Example: The whole market rises. Coin A jumps 6%, and coin B rises 5%. Long A (+6%) and Short B (-5%) give you +1%. The general market growth barely affected your result.
⚠️ Mistake: Picking two random coins "for hedging." Without a real link, the second leg only adds extra risk.
Why do you think a random second leg fails to protect your position?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
