Binance is among the most popular cryptocurrency exchanges in the world. The platform has been growing over the last years and it was able to attract millions of users from all over the world. However, many investors would like to know how to trade on Binance exchange.
Fortunately, we have created a full guide on how to trade on Binance. You will learn how to day trade on Binance, how to margin trade on Binance, and also how to set up your account. This guide has been created for both newcomers and experienced users. All those users that want to know how to trade on Binance will get the best information from it.
What is Binance?
Binance is one of the largest digital asset exchanges currently available in the market. The platform was launched in 2017 and since that moment it continues to grow in the industry. Binance is now a recognized ecosystem rather than just an exchange. This is why investors care about how to trade on Binance. There are several possibilities offered by this platform.
The platform is offering users with the possibility to trade virtual currencies, participate in blockchain networks, buy and sell new tokens, and more. In addition to it, Binance has also launched its own blockchain network called Binance Smart Chain.
Nowadays, a large number of projects have released their solutions on top of the Binance Smart Chain (BSC). The decentralized finance (DeFi) market has also been growing and this provided users with a wide range of possibilities. Moreover, the Binance Coin has increased the number of use cases and it is currently among the largest in the world.
This exchange has been created for users to be able to learn how to trade on Binance in just a few simple steps. They keep a very simple user interface and make it also very simple for users to open limit and market orders.
How to Trade on Binance?
If you know how to trade on Binance exchange, let us tell you that you would really enjoy the trading experience in this platform. In order to start with your trading activities, you will have to open an account.
The process to open an account is quite simple and you can just follow the instructions provided by the platform. Take into consideration that they might require your ID. Moreover, if you are a U.S. user, then you should use Binance.us.
If you already have an account, you will also be able to learn how to day trade on Binance and how to trade Bitcoin on binance. It is very easy to do so because the exchange makes it straightforward as well.
How to Day Trade on Binance?
Many traders do not want to buy digital assets and hold them for the long run. This kind of investor is known as day traders. They want to make profits with the fluctuations of virtual currencies on a daily basis. Day traders will also be able to know how to trade on Binance if they have been using other platforms.
For example, if Bitcoin moves from $20,000 to $25,000 then, the traders will be purchasing the digital currency and selling it during the same day. This would allow them to make profits with price fluctuations on a daily basis.
Binance is prepared for this and it is currently offering solutions for these traders. You will have to open the Trade section and select the “Classic” or “Advanced” options. They will be the best if you are a day trader.
As you can see, you will be able to buy and sell the digital currencies you want at any moment. You can buy, sell and hold the funds on the platform.
How to Trade Bitcoin on Binance?
To learn how to trade Bitcoin on Binance you will need to know the basics of trading. This is something that you can read in the upcoming sections. However, we will make it very clear and simple for you to know how to trade Bitcoin on Binance.
Once you have your account created on the exchange, you will have to deposit funds. This is something that can be done in just a few minutes, depending on your jurisdiction. There are different deposit options. You can use a bank account, deposit other virtual currencies or buy digital assets with debit or credit cards, among other options.
After you deposit the funds, you will be able to buy or trade cryptocurrencies. In order to do so, you will have to select the “Classic” or “Advanced” option in the Trade section on the top part of the screen. For users that are learning how to trade on Binance, the “Classic” option could be the best. Instead, if you are an experienced user that wants to know how to trade on Binance, the “Advanced” option would be suitable for you.
If you want to know how to trade Bitcoin, then you will have to search for BTC trading pairs. This is going to be an easy task. You need to go to the right side of the trading platform. There you will be able to search the trading pair you are looking for.
As you can see in the image, there are different trading pairs. Some of them include BTC/USDT, BTC/BUSD, BTC/AUD, BTC/EUR, BTC/BRL and many others. If you are in Europe and deposited euros to your account, you will select the BTC/EUR trading pair. In this way, you can easily open limit orders and market orders.
But don’t worry, you will learn how to do so if you do not know. You will learn how to trade on Binance in the next sections.
Limit orders allow you to buy or sell an asset at a price you select. Let’s say that you want to buy Bitcoin with Euro. You don’t want to buy Bitcoin at €19,000 but instead, you want to buy it at €18,000. You can easily select the price at which you want to buy the BTC.
This, however, does not mean that the order will get executed immediately. Considering Bitcoin price is above €19,000, there should be sellers ready to sell BTC for €18,000. This can take just a few minutes or days. The closer your limit order to the price of the asset at the time of placing the order, the faster it might get filled. If you are learning how to trade on Binance, this can be one of the best options to start using.
Market orders allow traders and investors to place a purchase or sell order at market price. That means that if Bitcoin is being traded at €19,000 and there is a sell order in the order book to match your market order, then you will sell all your coins.
If you trade small amounts of Bitcoin (most retail traders), Binance would not have issues with liquidity. Some large market orders might not get the market price and end up eating the liquidity available.
For example, if you want to buy € 100,000,000 of BTC using Binance at market price, then you will eat all the liquidity in the order book. That means that you might end up paying a larger price for the BTC you will buy and not €19,000.
In sum, market orders allow you to buy Bitcoin instantly (it gets filled immediately) at the best available price. Users that use the BNB digital asset can get discounts on their orders. If you are just trying to know how to trade on Binance, you don’t need to get worried about fees.
How to Margin Trade on Binance?
In the previous sections, we have only talked about the spot market. You can buy and sell the digital assets you want in just a few seconds. But we didn’t talk about how to margin trade on Binance.
One of the things you must know before trading with leverage on Binance is that you are not going to be buying the real asset. You will be handling contracts. These contracts do not have a maturity date, meaning you can keep the position open for as long as you desire.
However, if you trade with leverage, then you should consider the borrowing rate. The longer the trade keeps open, the more you will have to pay if you borrowed funds. If you already know how to trade on Binance, trading with margin should be an easy thing to do.
What is Margin Trading?
Margin trading is a trading activity that allows you to borrow funds in order to trade with larger sums of money. These funds borrowed have an interest but you are allowed to keep the profits of a winning trade.
Although this can be done using Binance, it also involves risks. Considering you can open positions 100x as large as the funds you have in your Binance margin account, you can get liquidated very fast.
The initial investment you have is called collateral. If the open position you have opened in the market does not move in the direction you were waiting for, then you might get liquidated. That means that you will lose your initial investment in order to repay the debt.
The lower the leverage used, the lower the risk to get liquidated. Moreover, margin traders tend to use tight stop-loss orders that allow them to reduce their exposure to risk. This activity should be only done if you have experience in the market.
Long and Short Positions
Long and short positions are the trading options you have on the margin trade platform on the exchange. You will be able to bet on the price of an asset, let’s say Bitcoin, moving higher or lower. You need to have both these terms clear if you want to learn how to trade on Binance.
The possibility to bet on the price of an asset moving lower is the main difference with the spot market. Moreover, increasing your position size is also one of the main differences with the spot market.
If you believe Bitcoin is moving higher, then you would consider opening a long position. If instead, you see Bitcoin going lower, then a short position would be your best option. This is one of the most important things you should know if you want to learn how to trade on Binance.
Leverage Trading on Binance
If you want to start trading with leverage on Binance, then you should select the “Margin” option under the Trade section on the main menu. You will be able to get access to the main leverage platform on the Binance exchange.
Once you enter the margin trading section on Binance you will be able to open long and short positions. You will have to select the trading pair you want. The platform will allow you to select the price at which you want to buy the contracts. You will also be able to select the amount of BTC contracts you want to purchase.
The whole trading experience will be very similar to the spot exchange. You will, however, have to select the leverage you want to use to trade with margin on Binance.
Final words on how to trade on Binance
In this guide on how to trade on Binance, we have shared all the most important things you should know about it. We have also shared with you how to margin trade on Binance, open positions, and more. This platform has been specifically developed for traders.
The team behind this exchange knows that there are investors that want to know how to trade on Binance. This is why they have created an easy-to-use platform with a clear user interface and great customer support. If you have further doubts on how to trade on Binance, you can always contact their support team.
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