Ever wondered why pair traders always use two legs? 🦵
🔹 A "leg" is just one of the two positions in a pair trade. The second leg removes a huge part of general market movement.
🔹 Without a pair, you bet on a coin's price. With a pair, you bet on the ratio between two coins.
🔹 Both legs must be genuinely connected. A random second coin hedges nothing—it is just another bet.
🔹 Remember the costs: two legs mean paying entry fees, exit fees, and funding twice.
💡 For example: The market grows, Coin A goes up 6%, and Coin B goes up 5%. A Long on A (+6%) and Short on B (-5%) give a net +1%. Market growth barely affected the result.
⚠️ Mistake: Picking random coins to hedge. Without a real connection, a second leg just adds extra risk.
Why do you think a random second leg fails to protect your position?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
🔹 A "leg" is just one of the two positions in a pair trade. The second leg removes a huge part of general market movement.
🔹 Without a pair, you bet on a coin's price. With a pair, you bet on the ratio between two coins.
🔹 Both legs must be genuinely connected. A random second coin hedges nothing—it is just another bet.
🔹 Remember the costs: two legs mean paying entry fees, exit fees, and funding twice.
💡 For example: The market grows, Coin A goes up 6%, and Coin B goes up 5%. A Long on A (+6%) and Short on B (-5%) give a net +1%. Market growth barely affected the result.
⚠️ Mistake: Picking random coins to hedge. Without a real connection, a second leg just adds extra risk.
Why do you think a random second leg fails to protect your position?
#Futures #CryptoTrading #CryptoEducation #RiskManagement