Trading Pair
A combination of two assets that can be traded against each other on an exchange, denoted as BASE/QUOTE (e.g., BTC/USDT). The base currency is the asset being bought or sold, and the quote currency is the unit of measurement for the price. Trading pairs define what assets you can directly exchange without intermediary conversions.
“The ETH/USDT trading pair lets you buy ETH priced in USDT or sell ETH to receive USDT. If you want to trade SOL for AVAX and no direct pair exists, you'd need two trades: SOL→USDT, then USDT→AVAX.”
Exchange
A platform where users can buy, sell, and trade cryptocurrencies. Centralized exchanges (CEX) are operated by companies that custody user funds and match orders, while decentralized exchanges (DEX) operate via smart contracts, allowing users to trade directly from their wallets.
Liquidity
The ease with which an asset can be bought or sold without causing a significant change in its price. High liquidity means large trades can be executed with minimal price impact (slippage), while low liquidity means even small trades can move the price substantially. Liquidity is one of the most important factors in healthy financial markets.
Order Book
A real-time list of all open buy orders (bids) and sell orders (asks) for a trading pair on an exchange, organized by price level. The order book shows market depth and the spread between the highest bid and lowest ask. Centralized exchanges and some DEXs use order books to match buyers with sellers.