How to trade on Binance for beginners

Major exchanges help even users with minimal experience to trade. In this material, readers will find the most complete overview of the main features of the popular service. You can learn how to trade on Binance for beginners: from registering on the site and making a deposit to security recommendations. Readers will learn about what types of trading the exchange offers, as well as ways to earn passive income. In addition, tips will be given that will be useful in developing a strategy in trading.

Differences between trading and investing

Asset owners choose one of two types of money management. This principle works for both stocks in the traditional economy and cryptocurrencies. The first (classic) strategy is to invest in assets to hold them in anticipation of a higher price and a favorable sale. Typically, deposits are placed for medium to long periods of time – from a month to several years. The length of storage depends on the results of analyzing the project: the more reliable and promising it is, the longer the investment period. If a cryptocurrency (or a share) has risks or uncertain prospects, it is better to choose short or medium terms.

The second way to dispose of assets is trading (trading). The goal is to capitalize on short-term price fluctuations. Traders benefit from changes in the exchange rate for a week, a day or even a minute.

Instructions on Binance for beginners

Regardless of the user’s choice of strategy, exchanges remain the main platforms where assets are bought. Most of the tools are designed to trade on Binance. The abundance of opportunities at the first familiarization with the platform often seems complicated. Therefore, the material describes how to start using financial instruments step by step from simple to complex.

In the case of investments, everything is much easier: to make a purchase, it is enough to know only the basics of trading and the principle of the spot market. Any trader, just like an investor, purchases assets.

1

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ByBit provides convenient and safe conditions for cryptocurrency trading, offers low commissions, high level of liquidity and modern tools for market analysis. It supports spot and leveraged trading, and helps beginners and professional traders with an intuitive interface and tutorials.

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The largest crypto exchange where you can quickly and safely start your journey in the world of cryptocurrencies. The platform offers hundreds of popular assets, low commissions and advanced tools for trading and investing. Easy registration, high speed of transactions and reliable protection of funds make Binance a great choice for traders of any level!

Principles of trading

Once you understand the basics, you can move on to working with assets. The principles of investing and trading on Binance for a beginner (and in general for users on any crypto exchange) are listed in the table.

Commissions

The exchange provides an opportunity to earn money and takes a part of the money for providing services. Commissions are withheld in several cases:

• Trading fees. This is a fee for transactions – buying or selling cryptocurrencies. The size of the commission is calculated as a percentage of the transaction amount.
• Withdrawal of funds. Fees are withheld for transfers of cryptocurrencies from exchange wallets to external wallets. When withdrawing fiat funds (dollars, euros, rubles, hryvnias and others) to bank accounts, fees are withheld. The amount depends on the cryptocurrency (or fiat), as well as the withdrawal amount.
• Account replenishment. The commission may be withheld also when depositing funds to the balance of the exchange. As a rule, fees are charged for depositing fiat using a bank account or a payment system account.

When calculating trading commissions, there are 2 important definitions – maker and taker. They simultaneously mean the format of a deal and the type of trader. Taker is literally translated as “executor”. Such traders buy assets at the market (or market) price. Maker (“maker”) wants to buy or sell cryptocurrency at its own rate.

Trading fees may differ for the two. Taker orders are placed at the current price, which means they are executed almost instantly. Therefore, commissions will be slightly higher than for makers.

In general, makers provide liquidity on the exchange and offer orders at the best price.

Binance is a large exchange with many options. Therefore, the description of the commission system on the platform takes up a full section. The main fees of the exchange:

• Spot and margin trading. The commission of both makers and takers is 0.1% of the transaction volume.
• Margin Borrowing. Ranges from 0.01 to 0.3%. For each crypto asset, the commission is calculated individually.
• Trading in futures. For takers – from 0.027 to 0.04%, for makers – from 0.0108 to 0.02%.
• Options trades. Uniform size – 0.02%.
• Peer-to-peer (P2P). Maker – 0.1%, taker – 0%.

Reducing commissions with BNB

After registration on the exchange, the account is assigned a basic level with the name “Regular User”. The listed fees are deducted for the initial status.

Professional traders with monthly trading turnovers of more than $1 million (in spot) or $15 million (in futures transactions) are offered to upgrade to VIP status. Additionally, you will need to buy and keep 25 BNB (crypto-tokens of the exchange) in your account. Trading fees for VIP traders are lower and depend on the amount of BNB on the balance.

Blocking BNB on the account in the status of “Regular User” does not reduce commissions and does not give privileges.

How to work on Binance for a beginner from scratch

Binance is an exchange of a centralized kind. Therefore, to work and trade on Binance, a beginner will have to create and verify a profile.

Account registration

You can create a personal account with a Google or Apple account. If you do not have them, you will need to specify an e-mail address. Step-by-step instructions for registering an account:

1. Open the website of the exchange or its mobile application, click on “Register with phone / e-mail”.
2. Enter a valid e-mail, study the terms of use of the site, check the box, click on the “Next” button.
3. Solve the puzzle to pass the captcha, click on “Confirm”.
4. A letter with a confirmation code will come to your e-mail address. You need to copy the combination of symbols, return to the registration page. Then you should enter the code and click on “Send”.
5. Think up a strong password to log in to the account, repeat the combination, click on “Finish”.

If the procedure is performed in the web version of the exchange, at the end of registration on the page there will be a QR code for downloading the mobile application and a proposal to verify your identity. Without verification, financial operations on the exchange are not available.

Identity verification

For verification you will need to upload a photo of your passport or driver’s license. Verification takes about 7 minutes. It is important that the device has a camera with good resolution. Otherwise, the completed verification may not be approved and you will have to repeat it. It is better to fill out the form on a mobile device. Step-by-step instructions, current in August 2023:

1. Open the application of the Binance platform.
2. In the column “Region of document issuance” select the country from the drop-down list, mark the type of document (foreign / domestic passport or driver’s license). Then it is worth clicking on “Continue”.
3. Take a photo of the document, click on “Continue”.
4. Take selfies. To do this, scroll down the page and click on the button of the same name, click on “Continue”, select “I understand, continue”.
5. It will then require you to look into the camera and take a video test. It helps to identify the potential work of dipfake programs that fake people’s faces in the photo. Such software is used by fraudsters.

After completion, the inscription “Verification Completed” will appear. Employees of the exchange will study the photo documents and make a decision within 10 minutes to 1 day. The course of the procedure may be slightly changed, it depends on updates on the site.

Tips for account security

The Binance platform offers several solutions to strengthen the reliability of the account. Therefore, you need to set up additional security features before funding your account with assets:

• Passkey. This feature allows you to conveniently and quickly connect to the account, as well as customize the entry of proof on another gadget in one click. For example, to log in to the exchange from a computer, you can set up additional confirmation via a mobile device.
• Password. It is additionally worth tying your email and phone number. When withdrawing money, confirmation codes will be sent to these contacts.
• “White list” for withdrawal of funds. In this case, cryptoassets and money can be sent to the addresses that were specified earlier.
• Authentication application. It is worth installing third-party programs from Google or Microsoft.
• Anti-phishing code. This combination will be specified in all messages sent to the user on behalf of the Binance exchange.

Creating a strong password

The combination of characters should include upper and lower case letters, numbers and symbols. This will protect the password from being autocompiled by decryption software.

You should change the combination of characters regularly. However, it is worth remembering that after changing the password, the exchange will block some functions for a day.

This is necessary for the user to report the problem if the password has been changed by fraudsters. Temporary blocking is imposed on such options:

• Withdrawal of funds.
• Selling via P2P service.
• Launching payment services and the Binance Card app.

2FA

To set up two-factor authentication, you will need to install a mobile application. Services from Google or Microsoft will do. Guide on how to set it up:

1. Go to the “Security” section, next to the 2FA label click on “Manage”, click on “Enable”.
2. If Passkey is configured, you will need to confirm the changes from the tethered device. After that, a QR code will appear.
3. Open the Authenticator app on your mobile device, click on “+”.
4. Then click on “Scan QR code” and point the phone’s camera at the picture.

A line with the name Binance.com will appear in the app. Under it will be displayed a temporary 6-digit code with an expiring timer. The combination of symbols will need to be specified to confirm sales on the P2P-platform, as well as when withdrawing funds from the exchange.

Anti-phishing code

Go to the account settings, click on the “Security” section and scroll down the page. There are 3 steps left to perform:

1. Next to the name of the tool, click on “Enable”, then click on “Create Anti-Phishing Code”.
2. Enter a combination of 4 to 20 characters. It must consist of Latin letters, symbols cannot be used. Then click on “Send”.
3. Click on “Get the code”. If the phone is used to confirm verification, the combination will come to it in the form of a message. You need to copy the code and paste it into the proposed window, click on “Send”.

How to make a deposit on the Binance exchange and withdraw money

This stage is available only for verified users. Passing the procedure is not enough, you need to get approval. The decision will have to wait up to 1 day. Before you start trading on Binance, you need to credit assets to the account balance. This can be done in fiat currencies or digital coins. In the first case, a commission is withheld for the input. When depositing cryptocurrencies, there are no fees.

Fiat money

Russian ruble (ticker RUB), Kazakhstani tenge (KZT), Ukrainian hryvnia (UAH), Belarusian ruble (BYN), US dollar (USD) and other currencies are available for deposit. Commission fees for replenishment in August 2023 are shown in the table below.

With cryptocurrency

You can top up from a vault outside the exchange or by using another user’s wallet. Step-by-step instructions:

1. Click on the “Deposit” button and go to the wallet, click on “Deposit cryptocurrency”.
2. Find the desired coin in the search bar (for example, USDT).
3. Specify the blockchain network. This is important, otherwise the assets will be irretrievably lost.
4. Copy the address of your wallet on the exchange.
5. Go to an external storage and transfer the assets to your own wallet (or share the address with the sender of the funds).

Trading options on Binance

Despite the abundance of operations, the interface of the exchange makes it easy to understand the management and explore the platform. At every step, hints, pointers and guides pop up on how to work and trade on the Binance exchange for Dummies.

Types of trading on the exchange are divided into 3 main groups:

• For beginner users. This kind of trading includes spot trading and conversion. These methods are enough to acquire assets and keep them as a long-term investment. Peer-to-peer is suitable for all market participants, including those with little trading practice.
• For experienced market participants who trade irregularly. Automated trading is done with the help of bots. There are also margin operations in spot.
• For professionals. Operations with futures contracts and trading on over-the-counter (OTC) venues.

Classic spot trading

One can easily buy cryptocurrency to hold as an investment. The first steps in bitcoin trading on Binance for beginner traders also take place in the spot space.

Advantage: instant purchase (sale) of assets at the market price. Profit is made if the rate has increased and the asset can be sold profitably.

How to find: open the “Trading” section, then select the “Spot” tab.

“Advanced” trading

Previously, the service offered in the spot 2 variants of the interface. “Classic” helped beginners to use Binance and trade crypto without unnecessary complexity and with limited features.

“Advanced” interface offered additional tools:

• Take Profit.
• Access to margin operations and others.

In August 2023, there is no such separation. “Classic” version has been redesigned into the “Conversion” page. In the spot terminal, the interface with all instruments is left.

Futures

This is a professional type of trading. Trading is carried out using borrowed funds of the exchange and involves financial risks. The principle of work of value derivatives, types of transactions and peculiarities of registration of futures contacts on the Binance exchange, the editorial staff described earlier.

Automatic trading

Also the platform Binance offers special software scripts (bots). They help to automatically conduct trades in cryptocurrency – buy and sell. The actual name of the section in August 2023 is “Trading Bots”. Scripts (called “strategies” on the Binance platform) perform operations based on predefined rules and without constant human participation. The number of algorithms has exceeded 80 thousand.

Marginal

Users can trade with a larger volume of cryptocurrency than they have on their balance. For this purpose, the exchange provides loans from its fund. Obtaining money to borrow on the platform is otherwise called leverage.

Leveraged trading is a risky type of trading.

To simplify, spot trading is buying and selling only your own assets on the balance sheet. Derivative and margin trading – funds for operations are borrowed.

Spot and margin trading allow you to make a profit only when the rate of assets grows. Derivative trading brings income in case of correct forecasts in both directions – both at increase and decrease. To get a loan, the user leaves his deposit on the balance sheet as collateral (margin).

Such trading requires a good understanding of risks and their management. This is important in case the trader’s decisions turn out to be wrong, because as a result he can lose all the money on the balance – both his capital and borrowed funds.

P2P

In Peer-to-Peer mode, Binance users can sell or buy cryptocurrency for fiat. Transactions are conducted directly between traders (merchants), and the platform acts in the transaction as a guarantor of the reliability of mutual settlements.

P2P exchange has become one of the popular ways to top up exchange balances in the last year. Users filter ads by different parameters:

• Asset volume
• Types of fiat currency
• Payment methods
• Countries.

Conversion

This is a new section of the exchange for buying and selling cryptocurrencies. There are no charts or trading volumes on this page. The widget can perform an exchange transaction. This option is designed for users with no experience.

OTC

The high volume trading section is designed for large market players such as funds and companies. Visually, the interface is the same as on the “Conversion” page. However, OTC venues work differently. When large traders or investors wish to transact in large volumes of assets, complications arise.

Orders with significant volumes of cryptocurrency can affect the market price. Traders regard the appearance of a large order in the stack as the presence of an influential “market maker”. Therefore, owners of significant liquidity can sell assets without unnecessary publicity and without being reflected in the stack of operations. To do this, funds contact the exchange via OTC. In the widget, they leave a sell or buy order. Then the exchange staff picks up the second side of the transaction. For mediation, the Binance platform receives a percentage of the transaction.

OTC platforms attract institutional investors – large companies, mining pools and wealthy individuals.

This type of trading provides more flexible conditions and meets the specific needs of large transactions. Sales are often performed anonymously for the participants of the transaction. The exchange ensures transparency and honesty of transactions.

Passive income instruments

The exchange offers 7 categories of instruments through which clients can profit. The list includes:

• Earn
• Launchpad
• Simple Earn
• Auto-investment
• Bicurrency Investments
• Binance Liquid Swap
• Referral program.

Binance Earn

The exchange presents dozens of instruments in each of the categories. The most popular are considered to be:

• Simple Earn. The user makes a deposit in cryptocurrencies for a certain period of time and in return receives interest income. The rewards are based on the APR parameter (annualized rate). They are accrued in real time and depend on the tier system.
• Staking. Binance Staking deposits funds into DeFi protocol smart contracts on behalf of users. Holders receive revenue in the form of LP tokens, and the exchange receives a portion of the profits as a brokerage fee.
• Farming. Includes 3 products – liquidity farming, swap farming and Launchpool platform. Each is based on locking a deposit in one digital currency and earning income in another.
• Bicurrency Investing. This is an opportunity to buy or sell an asset at a fixed price and at a specified time. The method helps to get rewarded both on the growth and fall of the exchange rate. The principle of operation is almost the same as that of quarterly futures.
• Range Bound. Investors can profit during periods of sideways market movement (reduced volatility). If the rate of the selected digital asset stays within a certain price range for a set amount of time, a reward is paid.

These features help you earn on any trading behavior of the asset. Staking and farming do not require technical analysis skills, it is enough to lock your deposit to earn passive income.

Launchpad

Binance platform has launched its own platform to support and release new cryptocurrency projects. Launchpad allows startups to issue tokens and then conduct a pre-sale and thus attract funding from users of the exchange. The latter also receive income when buying new assets, as cryptocurrencies start trading on Binance immediately after the end of the presale.

The launch of projects is traditionally accompanied by excitement among users.

How to start trading on Binance

In addition to studying the opportunities and interface, it is worth analyzing cryptocurrencies, projects and creating a strategy. To begin with, you need to decide on the direction – more dynamic trading or conservative investments.

Author: Saifedean Ammous, an expert in cryptocurrency economics.