Trading pairs? Let’s break down why you need two “legs”! 💡
📍 A “leg” is one of the two positions in a pair. The second leg offsets a significant part of the market’s overall movement.
📍 Without a pair, you’re betting on a coin’s price; with a pair, you’re betting on the relationship between two assets.
📍 The coins must actually be related. A random second coin doesn’t hedge anything—it’s just another bet.
📍 Two legs mean higher costs: double the entry and exit fees, plus two funding payments.
📊 Example: The whole market is rising. Coin A is up 6%, while B is up 5%. A long on A gives you +6%, while a short on B gives you -5%. The result is +1%, meaning the market’s overall rise had almost no effect on the outcome.
⚠️ A common mistake: choosing two random coins “to hedge”—without a genuine relationship, the second leg only adds risk.
Why do you think a random second leg doesn’t protect a position?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
📍 A “leg” is one of the two positions in a pair. The second leg offsets a significant part of the market’s overall movement.
📍 Without a pair, you’re betting on a coin’s price; with a pair, you’re betting on the relationship between two assets.
📍 The coins must actually be related. A random second coin doesn’t hedge anything—it’s just another bet.
📍 Two legs mean higher costs: double the entry and exit fees, plus two funding payments.
📊 Example: The whole market is rising. Coin A is up 6%, while B is up 5%. A long on A gives you +6%, while a short on B gives you -5%. The result is +1%, meaning the market’s overall rise had almost no effect on the outcome.
⚠️ A common mistake: choosing two random coins “to hedge”—without a genuine relationship, the second leg only adds risk.
Why do you think a random second leg doesn’t protect a position?
#Futures #CryptoTrading #CryptoEducation #RiskManagement