Tips and tricks for Binance trading
Introduction to Binance
Binance is considered as one of the biggest hubs that allow people effective and smooth swapping of cryptocurrency.Binance has its very own cryptocurrency token termed as BNB and if the traders carry out their trade using this token then they can expect a hefty cost reduction from their transaction dues.As a result of its policies, Binance can gather attraction from a wide variety of people and become the epitome when it comes to crypto dealing.The Binance ecosystem consists of three types of trading orders;Limit Orders
If a limit order is to be implemented, then it would abide by the limit price provided by the trader. If for instance, a trader is looking to buy a cryptocurrency using a limit order, then he will set a maximum price limit he is willing to pay for that currency. As a result, they would be getting hold of their currency at that maximum price or a price lower than that.Similarly, if a trader is looking to sell any of his cryptocurrency then he will set a minimum price limit at which he is willing to let go of his possession. Hence, he would be able to sell his currency at that minimum price or a price more than that.Limit orders provide traders a huge boost as they can provide them the opportunity to have extensive control over the price of their trade. This will help them immensely especially during the period of high fluctuation.Market Order
In a market order, you buy or sell any cryptocurrency on Binance at the best current price in the platform’s marketplace. It is known as one of the most dependable modes of trade as you can carry out effective trading in a fairly quick manner.Stop-limit Orders
A stop-limit order is one in which the trade takes place over a limited period. With the attributes of both limit and stop this type of order helps traders in minimizing risks. A stop order allows traders to purchase or let go of their crypto possessions after the price has exceeded a certain standpoint. A limit order has been discussed in detail above.In this type of order, the stop order and a limit order combine to give traders the best experience in trading their currencies. When the stop price is reached then the stop order transforms into a limited order.How to set up stop-limit orders?
Just like the name suggests, if you want to set up a stop-limit order then you will have to set up two price marks. They are the stop mark and the limit mark.The stop mark is a certain price set from where a trade begins. Anything above this mark would act as a bonus for the trader.The limit mark is considered as the price that is outside the boundary of the price set by the stop mark.However, one of the key steps to execute a stop-limit order is the setting up of the period during which the trade could be carried out. Any trade carried out outside this span will not be considered as complete.The main benefit of carrying out a stop-limit trade is the fact that it provides the trader an opportunity to have a clear cut command in terms of when the order could be carried out.But, one straight up disadvantage of this sort of an order is the fact that the likelihood of trade to occur becomes low. For instance, if you want to sell your share of a cryptocurrency but if it fails to reach the stop mark in the required period then the trade cannot be carried out.Several factors differentiate Binance from other platforms. First is the fact that this platform charges an extremely minimal fee for every proceeding that is carried out through it.Another thing is that it offers great liquidity. This means that its market is stable allowing its users to quickly get hold of or sell their cryptocurrencies.Binance also offers the security of the highest level to its users making sure that their assets are well-protected against all hackers.
This platform also has the potential to carry out extremely fast trades. Recently, it was reported that Binance could operate close to one and a half million trades each second. A number that would require some beating!
When users are surveying different markets to invest, they look for markets that facilitate them to trade many currencies under one roof. With approximately 150 choices of cryptocurrencies to choose from, Binance offers a wide and diverse market for its users.
How does Binance facilitate startups?
Binance provides various crypto startups the opportunity to introduce their token in the market. These startups can use Binance as a stepping stone to gather funds for their token via Initial Coin Offering (ICO). This not only benefits the startup but the individuals who had invested can make some handsome profits by selling their share once the value has risen.
How to carry out trading on Binance?
We will analyze the complete process of trading on Binance one step at a time.
- Sign Up
You will have to sign up on the platform using your email address and creating a password that would protect your account. By signing up you agree to Binance’s terms and conditions and proclaim that you are not blacklisted by any organization and are at minimum 18 years of age to carry out trading. Once you have filled all the pre-requisites and clicked register then your Binance account is eligible to begin trading
- The depositing of funds
The depositing of funds involves can be done in two ways.
The first one is through a credit card. Binance has the ability which enables you to buy cryptocurrencies of your choice directly from Mastercard or Visa card. However, one drawback of this method is that it limits you to only buy Bitcoin, Ethereum and Litecoin. The platform is currently working to broaden this and allowing more crypto purchases from a credit card.
The second way is through a wallet. You will go to the funds tab and select the option of Balances. Here you will see a variety of cryptocurrencies on which you can trade. You can select the deposit button which will be beside the currency you want to trade on. After that, you simply have to copy and paste the address of your crypto wallet or scan the QR code and then transfer the required funds.
In this depositing phase, you would be charged 3.5% of your total transferred amount with the least amount being $10. An ID check is also a very essential step in this phase where you will have to present any of your state-provided ID.
- Trading
Once you have deposited in the funds then you can proceed and carry out effective trading of any cryptocurrency of your wish. In Binance you will see all the cryptocurrencies listed on which you can place your bet. When you have decided the cryptocurrency on which you will trade then you can click on it which will direct you to the page where the trading for this digital currency happens. It may take some time for you to get familiar with the interface of this page but once you gain some experience then you will be able to understand all the terms in it.
This page consists of several sections. The left section of this page is called the order book. Here you will see all the functioning limit orders which will be available for both buying and selling. The top portion of this order book will be red where all the limit sell orders will be available for sale. Similarly, the bottom portion of this order book will be green and will indicate all the limit buy orders that are present for purchasing.
The right section of this page also has two portions. The top portion of this section displays the other cryptocurrencies on offer which can be traded while the lower portion provides the trader with the trading that is going on in the market. Once you carry out a trade then your trading history will also appear here.
However, the center of this page is the most important component of this page as here the actual trade will take place. This is the place where you will decide what sort of order you want to place. If you want to purchase your crypto share at the market rate then you will proceed with a market order, this order will also increase the likelihood of the trade to happen. But if you want to purchase your share at a certain price then you will do so by carrying out either a limit order or stop-limit order.
If you want to check the position of your order, then you can also do so by going to the bottom of the page where there’s a feature “open order”. It will display all your orders in the past 24 hours until they have been carried out or denied.
If you wish to get rid of any of your cryptocurrency then you will do it by following the same procedure by just changing the market or limit buy order to market or limit sell order.
- Drawing out your Funds
To sell you will have to go back to the Balances page. Here you will see the option of withdrawal next to your cryptocurrency. You will have to provide the address or the QR code of your wallet where you wish to send your withdrawn amount.
According to various reports, Binance is working towards creating a decentralized exchange but its current exchange platform is centralized. This is a major disadvantage of the platform as it makes it prone to threats such as the hacking of accounts. So, it is suggested that the traders quickly draw out their funds once they have sold their shares.
What is Margin Trading?
A margin trade is a trade where you take a loan from the third force and carry out your trade on the loaned amount and the amount you initially had. The concept of margin trade works in proportions. For instance, if a proportion is 100:1 for an exact one million dollar trade then to proceed with the trade you will have to pay a total price of $100,000 upfront. This amount is known as the margin amount. The remaining $900,000 will be loaned from the third force. As a result of this margin trade, you will be able to carry out a massive trade that is worth one million dollars.
If a margin trade works out, then it could do wonders for the trader. From the example we studied above, if we carried out a normal trade and made a profit of 10% then we would have ended up earning only $10,000. But if we chose margin trading and earned a profit of 10% then we would have made a hefty amount of $100,000! Excluding the interest rate on the loaned amount we would have taken home a minimum of $90,000. This is more than seven times the amount we could have received from normal trade. So, this is a massive plus point of the margin trading as it helps in elevating our trade to a scale unachievable by a normal trade.
However, if we look from a pessimistic view then this advantage could turn into a disadvantage very quickly. What if we suffered a loss of 10%? If this occurred, then the traders would have lost money on the same scale they gained it when they made a profit of 10%.
How to carry out Margin Trading using Binance?
Like many platforms, Binance also facilitates margin trading.
To carry margin trading through Binance you will head to your account dashboard. Here you will see the margin option. You will have to first create a margin trading account then you will be directed to a margin deal. You will have to comply with all the stipulations of this deal throughout your trading process. After this comes the shifting of funds. To shift funds, you will head over to the wallet tab where you will choose the margin option and click on transfer. Add the number of funds you want to shift as a result you will be able to shift funds from your normal Binance wallet to the Margin Trading wallet.
Then you carry out the most essential function of this trade “loaning of funds”. You first choose the coin you are willing to loan and then the amount you want to loan. The Binance algorithm works on the 5:1 proportion. For instance, if you have 2 Bitcoins then you can loan out only 8 more. Now your margin trade is filled but you will have to pay back the amount you loaned as well as the rate of interest on it.
To monitor the position of this trade you can head over to the wallet Balance page and choose the margin tab. On the right side of this page, you will also see a meter that will indicate your margin level. Its function is to tell you the level of risk on the amount you loaned.
Binance Futures
Binance futures allows the traders to up their antique and can select leverage up to 125x on all the trades they carry out in the future. This step will attract more and more traders to the platform. Thanks to the high leverage of Binance futures you can carry out a trade of 1 Bitcoin at just the partial amount of its original cost. As a result, you will be making a much higher profit.
However, in the same way as margin trading if you suffer a loss then it will also be of a scale similar to the profit. Hence, the bigger the trade bigger the risk of suffering a major setback.
But traders will not have to worry about this too much because one of Binance futures’ aim is to also provide the traders’ safety with their investment. You can use its stop-loss orders as well as its take-profit-limit orders to minimize the probability of suffering a loss.
How to be a successful trader on Binance?
Cryptocurrencies are definitely on the rise and with time, their worth is only expected to increase. But if you invest your money in this technology then it will be like any other investment you make. This means that it could go either way. You could end up earning great profits or failing miserably. But whatever the situation is it is important to make your decisions wisely and be patient. To be a successful trader on this platform you must invest your money on the right currency and follow all the necessary tips that assist you in earning great profits on Binance.
Important tips and tricks for Binance trading
One issue that many traders have on Binance is with the transaction fee the platform charges. But if they know some hacks then they could end up paying very low or even zero fees. The first hack is to use either Gas coin or Neo coin. If you closely assess Binance’s marketplace then you will notice that these are the only two coins that charge you zero transaction fee. Another hack involves trading using the platform’s cryptocurrency BNB. Trading using BNB can help you save a lot of money as Binance provides a deduction in the transaction cost if you use BNB.
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Now that you know the best tips and tricks for Binance trading, we’d love to hear your experience on the comments below.
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