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How to Trade on Binance:The Simplest Binance Guide You Will Ever Read💰

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As a cryptocurrency enthusiast, you most likely want to know how to trade on Binance. You might be a Forex trader who wants to dip his toes into crypto trading or an expert crypto trader who has used other platforms. Binance is one of the most prominent cryptocurrency trading platforms. It provides you with a seamless experience when you are making your trades. Even so, buying and selling cryptocurrencies is a daunting task per se. The last thing you want is the added stress of not being able to figure out how things work in your chosen exchange.

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These days, you can do a lot with cryptocurrencies. Some time ago, you could buy Tesla with Bitcoin, and now you can buy a VPS with Bitcoin. With the increasing use of cryptocurrencies in our day-to-day lives, we need to be able to trade crypto with ease of mind.

I remember when I was getting familiar with cryptocurrency trading. I was frustrated with choosing the most reliable exchange. Some of them did not meet my needs, and some were too complex that I could not figure things out. I came to use Binance and soon realized I did not know how to use Binance at all.

This is the very reason I am writing this article. I want to show you in detail how to trade in Binance and different types of trades. We will also explore the Binance trading fees and the safety of this exchange. Additionally, we will learn the type of users Binance is perfect for. After reading this article, you will be able to put all your focus into your trades. You will know Binance like the back of your hand.

What Is Binance?

Before telling you how to trade on Binance, you need to know what Binance is exactly. Binance is a cryptocurrency exchange platform that was founded in China. Changpeng Zhao and Yi He are the founders of Binance. They worked at the OKCoin exchange before building their own exchange in 2017. After the Chinese government forbade cryptocurrency trading in September 2017, Binance left China. Based in Malta, Binance’s offices are located in Taiwan and Japan.

Furthermore, Binance Coin (BNB) is a cryptocurrency created by Binance. Crypto traders who pay their trading fees with BNB get discounts from Binance.

Most cryptocurrency businesses use an Initial Coin Offering (ICO) strategy at the beginning of their careers. This is a surefire way to raise money without going for bonds or stocks. To raise $15 million in funding, Binance used to offer a BNB in July 2017.

As of right now, Binance is listed as the first biggest crypto exchange on the market in CoinMarketCap. In the previous 24 hours, nearly $18 billion of cryptocurrency were traded on Binance.

Binance used to be a crypto-to-crypto exchange which means that you could only trade crypto on it. If you did not own any crypto, you needed to buy some via an exchange that offered fiat currencies (official currencies of nations, e.g., Yen, USD, etc.). Coinbase is one of these exchanges. Binance and Coinbase have so many differences and so many things in common.

After buying some cryptocurrency, you can start to learn how to trade crypto on Binance to trade more than 200 coins and tokens. Now let’s learn how to trade on Binance.

How Can I Trade on Binance?

How Can I Trade on Binance_

To give an answer to how to trade on Binance, you first need to know how to open an account. Next, you need to fund your account. You can only then start trading on Binance like a guru! Skip ahead if you already have a Binance account with a fund and you just want to learn how to trade on Binance.

How Should I Open an Account on Binance?

As we mentioned earlier, you need to open an account to learn how to trade on Binance. There are some steps to follow to open your account on Binance. First, you need to get registered. Then, you will read and agree to Binance’s Terms of Use and Privacy Policy. Afterward, you need to prove that you are not a robot (trust me, it is for safety measures!). Finally, you can set your 2-Factor Authentication (you will regret it if you don’t).

Step 1: Registration

To learn how to trade on Binance, the first thing to do is register. Go to the Binance registration page, enter your email address, and create a strong password. It is best to use a secure email address that you can access easily. Also, choose a password that is made up of numbers, symbols, and uppercase and lowercase letters.

Step 2: Terms of Use

To be able to know how to trade on Binance, you need to read the Binance’s Terms of Use. This is to make sure you comply with everything. Do not skip this part. This is a crucial step because this is your financial life we are talking about. This is not the same as ditching reading Microsoft Word’s Terms of Use before installing it!

Step 3: Verification

After you have read and agreed to Binance’s Terms of Use, you will need to prove that you are not a robot. You do this by completing an easy puzzle. This helps Binance ensure the safety of its platform.

Then, Binance will send an email to you. You need to open the email from your inbox and click on Verify Email to complete your registration.

Congratulations on being a Binance account holder!

Step 4: 2FA

Yes, now you do have an account on Binance. However, you need to make your account as safe as possible. Money is no joke!

When you log in to your account for the first time, Binance asks if you want to set up 2-Factor Authentication. It is vital to go for it and not skip it. 2FA is a security feature that provides you with an extra password. When you enable 2FA, the Google Authenticator app sends you an SMS after entering your normal password.

Now, you are ready to fund your account and start learning how to trade on Binance. You need to put cryptocurrency in it to be able to trade. If you have a crypto wallet, you can use it to move some crypto to your Binance account. If you do not, you can use an exchange that supports fiat currencies.

How Should I Fund My Account?

How Should I Fund My Account_-min

As I said before, to learn how to trade on Binance, you need to have cryptocurrency funds in your account. For the purpose of this article, I will teach you to use Coinbase to fund your Binance account. You can implement a similar strategy to almost any other exchange you want to move your funds from.

Step 1: Go to Your Coinbase Account.

Log in to your Coinbase account. Then, head over to the Accounts tab. Click on the Send button in front of the cryptocurrency you want to move. You will be prompted to enter a Recipient (which will be the address of the same cryptocurrency, but this time from Binance).

Step 2: Get Back to Your Binance Account.

Get back to your Binance account and tap on the Funds tab on the taskbar. Next, head over to Deposits. Enter the cryptocurrency you need an address for (the exact one you chose in the previous step). Binance will now generate an address for your chosen cryptocurrency.

Step 3: Move Your Cryptocurrency.

Copy the generated cryptocurrency address and paste it into the prompt box in your Coinbase account. Now, the only thing remaining is to decide how much cryptocurrency you are willing to move. Finally, click on the Send button. As soon as your funds are processed, you can see them in your Binance account.

Now that you know how to open a Binance account and fund it, it is high time you learn how to trade on Binance.

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How Should I Trade on Binance?

How Should I Trade on Binance_-min

In the process of learning how to trade on Binance, you will see that there are two trading settings: Basic trading and Advanced trading. Basic trading is our recommended choice for beginners.

    • Basic Trading:

Basic trading has a simple layout that everybody can understand easily. You can only see the crucial information required for making trades. However, if you are a newbie, it might still seem complicated to you. The good news is that its learning curve is not steep at all.

  • Advanced Trading:

Expert traders can access all the market information and chart of prices they need. Advanced trading enables expert traders to make complicated trades with more knowledge at hand.

How to Trade on Binance for Beginners

As this is not a tutorial for advanced Binance users, we will explain how to trade on Binance using the basic trading settings. 

  1. Step 1: Log into your Binance account.
  2. Step 2: Then, head over to the Exchange tab and choose Basic on the taskbar.
  3. Step 3: Afterward, you need to select a trading pair from all the trading pairs listed on Binance. Choose the crypto you want to trade from the top right corner to search for the cryptocurrencies that offer to trade with it. Choose the coin you want to be exchanged with yours.

Note: an exchange rate is what Binance provides for pairs of coins.

  1. Step 4: Select the kind of trade you want to perform. You might want to choose limit order, stop-limit order, or market order trades.
  • Limit Orders: these orders allow traders to set the maximum price they are willing to sell.
  • Stop-Limit Orders: these orders enable users to sell/buy a cryptocurrency when it reaches a certain price.
  • Market Orders: these orders let traders exchange their coins at the market’s current price.
  1. Step 5: Finally, you need to specify how much you want to trade.
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Different Types of Trades

Different Types of Trading-min

There are different types of trades, contracts, and prices for those who want to take it seriously. As a more advanced trader, you might want to learn how to trade futures on Binance. Or maybe you will be better off trading spots. Anyway, let us get into it!

Futures Trading

Trading futures contracts has become a vital tool in the inventory of every trader. Here, we will learn what futures contracts are, how they work, their basic concepts, and pros and cons. We will also take a look at how to trade futures on Binance. Skip ahead if you know the basic concepts and just want to learn how to trade futures on Binance.

What Are Future Contracts?

Learning how to trade futures on Binance is only half the way. You should learn what future contracts are first.

Derivative contracts (contracts between two or more parties based on a/a set of financial assets) have been around for too long. However, some time ago, trading platforms added cryptocurrencies to their portfolios as well. As of right now, digital assets form a huge part of the inventory of an investor.

Futures contracts allow traders to take part in the market movements without possessing an underlying asset. You can go long by buying a futures contract if you expect that it will increase in value in the future. On the other hand, you can go short by selling a futures contract if you know the prices will decline. Upon expiration, the trade settles in cash, not in the actual digital asset. Moreover, the value of a futures contract is based on the digital asset it represents.

Futures contracts are the most traded crypto derivatives products. They present long-established derivatives that behave similarly to stock indices. You can also see them as derivatives contracts that involve commodities. The investor is basically taking risks on the future value of an asset.

Furthermore, what makes futures trading special is that the investor is protected against unfavorable market conditions. This is when selling high and buying low (short selling) comes into play. You can essentially make a profit without caring about the direction of the asset’s price.

Nevertheless, due to the fluctuating nature of derivatives trading, you must manage your risks wisely. It is essential to learn the fundamentals of crypto futures and how to trade futures on Binance before trying it out.

READ
Binance Scalping Bot: Strategies and Best Options in 2022

How Do Crypto Futures Contracts Work?

Working with digital assets is challenging and has its ups and downs, e.g., too much inconsistency, bad publicity, etc. Even so, traders do their best to benefit from the fluctuations.

The only thing worth remembering is that you only take risks on price changes rather than holding the actual crypto. Let’s bring Mike and Rachel (two completely fictional characters) into the game. Rachel decided to go for a long futures contract position when BTC traded at $30,000. Simultaneously, Mike went for a short position. The price of BTC increased till it hit $50,000 when both of them decided to settle. Now, Rachel, who has a winning trade contract, will receive a $20,000 profit. However, Mike needs to pay the exchange $20,000 deficit loss.

Fundamentals of Crypto Futures Contracts

Knowing some terminologies can help you get closer to becoming a derivatives trader. The more you familiarize yourself with this world, the more you can take control of it.

  • Leverage

Before getting into how to trade futures on Binance, you should know what leverage is. Leverage enables you to use a small amount of capital to control a huge contract value. This capital is known as the performance bond or initial margin in the futures market. 3-12% of a contract’s cash value should be more than enough for the initial margin.

Thanks to leverage, you do not need to have thousands of dollars to buy 1 BTC. With a futures contract, you can simply open a long BTC position and enjoy your futures trading.

  • Margin Requirements

As mentioned before, an initial margin is what gives you the entrance into a futures position. The initial margin is the percentage of the value of a futures position that needs to be covered by collateral. This happens when you use a futures trading account.

However, the minimum amount needed to keep trading positions open is the maintenance margin. When you reach your maintenance margin limit, open positions get liquidated. Maintenance margin checks are performed consistently. They help calculate margin utilization.

  • Funding Rates

The funding rate is the system that makes sure that the prices of the index and futures intersect regularly. Exchanges need funding rates because crypto perpetual contracts do not settle like old futures contracts.

The difference in price between the spot and futures markets is a factor in calculating the funding rate. Investors pay/receive funding based on the open market positions.

Pros and Cons of Trading Futures Contracts

Every type of trade, especially the more profitable ones like the futures trading, have pros and cons. Let us see what we got about the futures contracts trading.

Pros:
  • Betting against the market and gaining profit from both directions of the market
  • Giving traders noteworthy exposure with only a fraction of the total cost because of leverage
  • Acts as a hedge against spot markets
Cons:
  • Fluctuating market acting as a disadvantage
  • Exposure to leverage leading to huge losses

How to Trade Futures Contracts on Binance

Learning how to trade futures contracts on Binance is not a complicated matter. You just need to follow some steps after becoming a Binance user.

  1. Step 1: First, open a futures trading account on Binance Futures.
  2. Step 2: Then, enable 2FA authentication so that you can fund your futures account before learning how to trade on Binance.
  3. Step 3: Deposit crypto funds supported by Binance Futures to your futures wallet.
  4. Step 4: Next, choose one of the two derivative contracts that Binance Futures provides:
    • USDⓈ-M Futures
    • COIN-M Futures
  5. Step 5: Specify the proper amount of leverage you need for your position.
  6. Step 6: Finally, place a buy-limit, buy-market, etc. order on Binance Futures.
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Spot Trading

Before learning how to spot trade cryptocurrencies in Binance, it is best to learn what a spot trade is. Additionally, we need to know some terminologies to get acquainted with the spot market. Move forward if you know all this and just want to learn how to spot trade on Binance.

What Is a Spot Trade?

A spot trade/transaction is buying/selling a foreign currency, financial instrument, or commodity for instant delivery. This instant delivery happens on a certain spot date, specified beforehand.

Spot contracts are different than future contracts based on many factors. The time value of the payment, the interest rates, and also the time to maturity all play a role here. In a foreign exchange (Forex) spot trade, the exchange rate of the transaction is called the spot exchange rate. Furthermore, most spot market trades have a settlement date of T + 2.

The current market price of a financial asset is called the spot price. The spot price is the price at which an asset can be sold/purchased immediately.

Traders set the spot price via posting their purchase and sell orders. The spot price might be subject to change each second in liquid markets. The reason is that fantastic orders get taken, and new orders join the marketplace.

Notes to Consider

Before moving on to the answer to how to spot trade on Binance, you need to know about forward pricing and spot markets. Then, I will provide you with a step-by-step solution you can follow!

Forward Pricing

The price of an asset that is settled after the spot is the spot price plus the interest cost till the date of settlement. In Forex trades, the interest rate differential between these two is used to calculate the final price.

Spot Markets

Interest rate products, e.g., bonds and options, typically trade for spot settlement on the following business day. Two financial institutions or a company and a financial institution hold the contracts. However, interest rate swaps with the near leg for the spot date settle within two business days.

Knowing how to trade on Binance is a must. The reason is that commodities are mostly traded on an exchange rather than over-the-counter. CME Group (Chicago Mercantile Exchange) and the Intercontinental Exchange are two of the most used exchanges for these trades. Intercontinental Exchange owns the New York Stock Exchange (NYSE).

How to Spot Trade on Binance

Traders can arrange their spot trades beforehand to set off when a certain spot price comes up. This spot price is called a limit order. Now it is high time to learn how to spot trade on Binance!

  1. Step 1: First, log into your Binance account. If you do not have one, create an account on Binance.
  2. Step 2: On the homepage, select any cryptocurrency to go to the corresponding spot trading page. Tapping on View More Markets results in extending the list.
  3. Step 3: Then, on the trading page interface, choose the Trade option and select Classic or Advanced.
  4. Step 4: Next, head over to the buying section and fill in the price and the amount of your order.
  5. Step 5: Click on Buy <your chosen cryptocurrency> to complete your trade.

You can use the same steps to sell your crypto.

You can switch your order type to market order if you want to place an order as soon as possible. This way, you can go for the transactions at the current market rate immediately.

Note that the default order type is a limit order. This lets you place a limit order, which is executed exactly when the market rate reaches your set price.

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Manual Trading vs. Bot Trading

Manual Trading vs Bot Trading-min

After learning how to trade on Binance, you need to see whether you want to use manual or bot trading. Take into account that by bot trading, we are not referring to the scams that some bot is going to make billions out of a tiny account. Real automated trading systems can work if used correctly. For this reason, many huge investment firms implement optimized trading bots.

Both manual trading and bot trading have their advantages and disadvantages. There is no absolute winner in this. It all depends on your own preferences and the way you want to trade.

Automated trading software is a fabulous way to trade. It is robust, exact, and flawlessly disciplined. It does not make any mistakes and does exactly what you want from it.

One problem with manual trading is that you can never be completely disciplined.

There are times that you will not be able to stick to the plan. However, with automated/algorithmic trading, you just need to set up the plan you want. The robot will stick to it at all times and in all situations. This can be the difference between a profitable trader and an unprofitable one.

Furthermore, a robot never fails to execute correctly. It will never buy when it should sell. It won’t mistype or enter the wrong lot size. These errors can happen to human traders because of the speed they need to keep up. The stress they undergo only makes matters worse.

Additionally, robots do not get tired. You might be able to go for fabulous trades 3 to 5 hours a day at maximum, while robots can do so 24/7. Their efficiency does not drop due to changes in emotions, level of freshness, or any other issues.

Robots can cover more data than human traders. Using an algorithmic system, you can plug into many charts and monitor all the signals. However, if your strategy as a human trader applies to different currency pairs, you can only monitor a few of them simultaneously.

However, a robot does not have a brain. A robot can only execute decisions based on the scenarios programmed into it. Humans take into consideration everything that is going on in the world. Whether it is a tweet from Elon Musk or the psychological games of the trades world.

You can take into account unexpected events, e.g., hurricanes, etc., or awkwardly slow movement of the market. You can also decide when you have enough profit and pull your trades out. Also, a human can go with his guts.

As you can see, both manual trading and automated trading can be beneficial. Their benefits depend on what you see fit for yourself.

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7 Best Crypto Trading Bots for 2022 — The Ultimate List of the Best Crypto Bots🤖

Advantages of Learning How to Trade on Binance

Advantages-of-Learning-How-to-Trade-on-Binance

Every exchange has its pros and cons, and Binance is no exception. You need to make sure that the exchange you want to use fits your needs and its pros outweigh its cons in your favor. Learning how to trade on Binance comes with its own advantages as well.

  • A safe, reliable, and secure platform
  • Support for more than 600 cryptocurrencies
  • Quick setup
  • Accessibility on all devices
  • Appealing UI/UX

Binance Trading Fees

Binance Trading Fees-min

When you learn how to trade on Binance, you need to deal with fees. Working with Binance benefits you in this regard, as you will need to pay the lowest fees on the market. You do not even need to pay any deposit fees! Think about that!
However, you still need to pay withdrawal fees. The fees depend on the currency you choose to withdraw. The good thing is that they are lower than other exchanges. As an example, for Ethereum withdrawals, you will need to pay a fee equal to 0.01 ETH. You will need to pay 0.25 XRP as your trading fee for Ripple.

Furthermore, Binance caps your trading fees at 0.1% of each purchase/sale. However, the cherry on top is that Binance cuts your fee in half if you use BNB to pay them. This means that your final fee will cap at 0.05%, which is insane!

This is while other low-fee exchanges, such as Bittrex and Bitstamp, charge 0.25% (five times more than Binance) for each trade.

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Binance Security

Binance Security

Binance is a safe crypto exchange in itself. However, there are measures you can take to increase its safety.

  • Set up 2-Factor Authentication.

With 2FA set in place, you will not have to worry about your password being hacked. Nobody can access your account unless they have both your password and the dynamic code sent to your mobile device.

  • Ignore requests from people who claim to be from Binance.

Learning how to trade on Binance is not the end of your learning path. You must also learn to trust nobody! Nobody from Binance will ever approach you and ask you for your password or 2FA code. Nobody will ever come to you to send your cryptocurrencies somewhere else (e.g., a safe account, etc.).

  • Only use the official Binance site.

Never open links that are sent to you via SMS, email, pop-ups, etc. Make sure to open their main homepage and head over to wherever you want. Whenever you want to get in touch with the support staff of Binance, head over to their official support page.

  • Use reliable anti-virus software. 

If your device contains bugs or viruses, your Binance account is not safe. Ensure that you are using safe, reliable, up-to-date anti-virus software. Check up your computer’s status frequently to keep it safe.

READ
Forex vs. Stocks vs. Crypto: Which Market Can be Your Gold Mine in 2022?

Who is Binance for?

Who is Binance for-

After figuring out how to trade on Binance and also keep it secure, it is now time to see who benefits more from Binance. Binance intends to be as widely used as possible. Both newbies and expert users can benefit from Binance. However, I do not recommend using Binance if it is your first time in the trading world.

Furthermore, trading on Binance helps users improve their trading skills, as they can start with the basic settings and market order trades. Then, they can move up the ladder and get to use the advanced settings and limit and stop-limit trades. This makes sure that you always get better at your trades.

Final Thoughts

This article made sure that you know how to trade on Binance. However, you should know that this is not all because the rest depends on your trading abilities. Take into account that psychological games play a crucial role in trading as well. Make sure you know how to deal with stress and pressure before getting into the game. Cloudzy offers anonymous VPS that you can travel anonymously with global servers.

One thing you must take into consideration is that Binance excessively restricts people from its services. It does so based on your IP address and geolocation data. If you are keen on using the largest crypto exchange platform in the world, you should find a loophole. However, you do not need to worry because we have got your back!

With affordable prices, our Binance VPS solutions offer you limitless trading, minimal latency, and high-tier functionality. The moment you place your orders, they will be processed. This helps you gain an edge in today’s wild market. Contact us to learn more!

 

FAQ

 

Can You Fund Binance with Fiat Currencies?

Till not a long time ago, Binance was only a crypto-to-crypto exchange. However, things have changed. Binance now accepts up to 50 fiat currencies. You can buy your crypto assets by first funding your account with fiat currencies. This eliminates the need to go to other exchanges such as Coinbase.

How Are Binance Fees Calculated?

Binance has the lowest fees on the market. You do not need to pay any deposit fees. Binance trading fees are capped at 0.1% of each trade. If you pay the fees with BNB, Binance will cut your fees in half (capped at 0.05%).

How Many Types of Trades Are There?

There are many types of trades out there. You can opt for futures trading, spot trading, manual trading, and robot trading. Futures trading is the one you do not need any capital for. However, you can go for spot trades to make your transactions instantly. Automated trading beats manual trading because of its precision and not getting tired. However, manual trading has the upper hand because of taking into account different events around the globe.

What Are Binance Restrictions?

Binance restricts certain IPs and geolocation data. Not only can you not access Binance there, but if you use a VPN and it goes off, Binance detects and blocks your account. You need to use a Binance VPS solution to make sure of the safety of your account and money.

How Many Types of Orders Are There?

Limit orders, stop-limit orders, and market orders are the three types of orders you can place. Limit orders enable you to set the maximum price you want to sell. Stop-limit orders let you trade a cryptocurrency when it hits a specific rate. Market orders allow you to exchange coins at the current rate of the market.

What is the Difference Between Spot Trades and Futures Trades?

Spot trades let you make transactions immediately. On the other hand, futures trades enable you to set your orders without owning the asset yet, based on the market movements.

Armin is a passionate full-stack web developer who enjoys writing content. He is constantly learning and expanding the horizons of his knowledge over numerous topics that he is interested in.

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