- Do you aspire to trade cryptocurrencies?
- Do you want to day trade?
If your answer to any of these questions is Yes (!), you are in the right place.
Day trading of cryptocurrencies is catching the trend, and many people are opting to do this full-time.
But I wouldn’t recommend you to do this full-time yet and especially drop all the ideas in your head of leaving your job for day trading of crypto.
Now that I have put your mind to rest, it is imperative to tell you about the best cryptocurrency exchange, i.e., Binance exchange.
How To Day Trade Crypto On Binance Exchange?
The first rule of day trading is liquidity. If you don’t have decent liquidity, you will lose in day trading irrespective of how good a strategy you make.
That’s why we recommend day trading cryptos on the Binance exchange because it has the maximum liquidity in the crypto markets.
For the uninitiated, the Binance exchange got into the crypto game in 2017, and in less than a year, it became the go-to exchange of the market for both spot and futures trading.
Thanks to the great bull run of 2017 and also Binance’s competent team.
Since then, many crypto traders- veterans and beginners both trade on the Binance exchange. But mind you, it is a centralized exchange, so never trade/store more than what you can afford to lose.
In this guide, I intend to convey how you can use Binance exchange step-by-step for cryptocurrency trading. In the end, I will briefly touch upon day trading.
So hold your horses until the end.
Different Trading Markets on Binance
Binance is known for having the widest range of trading markets in the cryptosphere. You can trade in the spot market as well as the futures market.
In the spot market, you can trade on BNB markets (crypto-to-BNB), BTC markets (crypto-to-BTC), Fiat markets (crypto-to-stablecoins), and ETFs.
On the other hand, in the futures market, which is bigger than the spot market by trading volume, you can trade in BTC options, USDT-Margined perpetual and quarterly futures, COIN-Margined perpetual futures, and leveraged tokens.
In the derivatives market, you can trade with a leverage of up to 125X, thus helping day traders to maximize profit from small price movements.
Getting Started To Day Trading On Binance
Binance, in a very short duration, has built a huge user base and is one of the most trusted crypto exchanges in the market. It has established itself as a benchmark for the industry.
For day trading, Binance is a suitable trading platform. It offers trading opportunities in various markets with deep liquidity and a meager trading cost among all trading platforms.
The first step is to sign up on Binance using your email ID and register yourself to start trading. You don’t need anything else at this moment to get started with Binance.
When you sign-up, you automatically agree to abide by the terms and conditions of the Binance exchange. Mainly, you should be above 18-years of age and a non-US citizen.
Don’t worry; if you are a US citizen, they have launched a separate platform for the US, Binance.US, which all US citizens can use after verifying their nationality through photo ID proofs.
I am coming back to Binance.com. Here you aren’t required to do a mandatory KYC check, and you can trade crypto to crypto without any verification.
Of course, if you skip KYC, your daily crypto limits will be low, but you can increase these limits later. For enhanced security of your trading account, use a strong password, enable 2FA, whitelist your device.
Deposit Cryptocurrencies into Binance Trading Account
Get ready to deposit base cryptocurrencies like BTC or ETH, or USDT in your Binance trading account so that you can trade them against other cryptocurrency pairs.
As we speak, Binance exchange has 550+ cryptocurrency trading pairs listed against USDT, BTC, ETH, BNB, etc. So to be able to trade against these trading pairs, you will need base currencies like BTC/ETH/USDT, etc.
If you already have these currencies in your wallet, go to the Exchange Wallet section, where you can deposit these cryptocurrencies on a Binance exchange.
While doing this, make sure you use the displayed QR code. Copy-paste of deposit address can lead to some irreversible transaction leading to permanent loss of your funds.
On the other hand, if you don’t have any of these base currencies, buy some directly from Binance exchange using a credit/debit card.
Use this Buy Crypto option from the Binance exchange to buy directly using your credit/debit cards. You will be required to complete a quick KYC check while buying crypto through this option because you will be exchanging cryptos for fiat currencies.
The other options to include fiat currency to your Binance wallet are- Binance P2P, where you can buy and sell crypto locally without the need for identity verification and through third-party payments (Simplex and Bank Transfer).
Once you have done this, the currency you bought will start reflecting in your Exchange Wallet section.
Let’s say you have deposited or bought BTC, and now you are ready to exchange this BTC into some other currency which we shall discuss in the next section !!
Place a Trade On Binance
Now you have BTC in your deposit, so it is an excellent time to see how to place a trade to exchange this BTC into some other cryptocurrency, for example, ETH.
Go to the Exchange section on the Binance home page, and under that, choose Advanced. Once you select this, you will be able to see this trading window.
I have provided some vocabulary in the above picture to make it easy for you to understand which section of this window is called by what name !!
Binance provides access to real-time market data about price action like a bid/ask price, order book, various advanced charts, and TA tools, which helps day traders to create successful trading strategies and make money.
Under this, you have the actual window or section from where you place your trade and view order history and position. You can place market and limit orders, as well as conditional orders like stop loss-limit order, stop-market order, trailing stop order, post-only order, Limit TP/SL order.
You can see your BTC balance, and you can trade or place orders to buy ETH from this BTC. If you pay attention to this, you will be able to see different percentage denotations.
These percentages mean how much percentage of your total BTC you wish to exchange for ETH. In this example, I have chosen 100% of my BTC holdings to exchange into 1 ETH.
Select 100% and click on the ‘Buy ETH’ green button. As soon as your order is filled, you will be able to see it in the left section of the exchange dashboard.
Withdrawal of Funds
Congratulations, your order must be fulfilled in seconds on Binance. That’s the power of enormous liquidity, but now what next?
Next is obvious, you would want to withdraw your currencies which you just bought. In this case, ETH. However, I understand for a day trader; it doesn’t make sense to withdraw your cryptocurrencies.
But if you are from another category, i.e., HODLers, you need to know this part well and keep your cryptocurrencies safe in a non-custodial wallet.
Again go to the homepage of the Binance exchange and go to the Exchange Wallet section. Under that, choose deposits and withdrawals to go to your ETH wallet.
Click on Withdraw against ETH wallet and put your Ethereum wallet’s address in which you want to withdraw your Ether coins. Make sure to double-check your address while withdrawals, as many commit mistakes here and end up losing their coins.
For a day trader, the trading fees are an important aspect to look after as they can impact the profitability percentage rate.
Binance has divided its trading fees structure into 10 levels based on the last 30-days’ trading volume. For the spot market, the trading fees start from 0.10% as maker and taker fees, and it declines as one moves higher in the slab based on increased trading volume.
Similarly, in the futures market (USDT-M futures trading), the per trade maker and taker fees start from 0.02% and 0.04%, respectively. It continues to decline with the increase in trading volume, which makes it lucrative for day trading.
How To Successfully Day Trade On Binance
Binance is one of the most successful and trusted crypto exchange platforms in the market, with a large user base. It has established itself as a preferred destination for day traders and investors to buy sell cryptocurrencies and profit from volatility in a very short time.
Compared to investing, which involves holding for a longer period, day trading involves trades taken for a short time, never lasting more than one day. The aim is to profit from the volatility and price discrepancies of an asset in the market.
Day trading looks like a lucrative option to make money, but it isn’t easy. You need both technical and psychological skills to study the market and succeed. Before starting to trade, you need to know the following things that will help you improve your success rate over time.
Learn the Basics: Day trading is not a get-rich scheme overnight. It requires patience, practice, and the right set of knowledge to succeed. Consider learning books on day trading or getting mentored by someone who commands expertise in day trading.
Rather than depending on AI-generated trading signals, which are expensive and make you reliant on systems, acquire the knowledge of how to study the market and create trading strategies yourself.
Capital Requirement: Day trading in the spot market is more capital intensive as you need to provide for the whole trade value, limiting your trading profitability. But, if you day trade in crypto futures contracts, you can start with a little capital due to the availability of leverage.
Using leverage can amplify your profitability without committing huge capital and result in huge losses if the trade goes wrong. Therefore, you need to choose the markets you want to trade and deploy your capital wisely.
Familiarize with Different Trading Styles: There are many day trading strategies and styles followed by traders and used according to the market situation.
For example, Scalping is a prevalent trading strategy that involves taking advantage of the small price movements on shorter time-frames; Range trading involves studying candlestick price patterns and looking for support and resistance levels. In Algorithmic trading strategy, where bots execute trades as per the parameters defined in the trading strategy.
Fine-tune your trading strategy: To become successful in day trading, you need to practice with your trading strategies, fine-tuning them before you are ready to risk your own capital. It’s not an overnight process and may take days to months to fine-tune your trading strategy.
Not practicing with your trading strategies in the demo platform or simulator is the biggest mistake most new traders in the market commit. The process also helps you develop crucial trading psychological skills, such as patience, discipline, and focus, the factors responsible for long-term success in the market.
Binance Testnet Platform
If you’re a beginner in the day trading segment, you need to test your trading strategies and check their efficacy before placing your first order in the live market.
Binance provides you a unique opportunity to familiarize yourself with the platform and test your trading strategies without risking your real money on the Binance Futures testnet platform.
Final Words: Day Trading on Binance
So that’s pretty much on a high level how you place orders on Binance and trade cryptocurrencies for one and another.
So, whether you are day trading or occasionally trading for HODLing purposes, the process of exchanging remains the same. But let me tell you:
Day trading isn’t everyone’s cup of tea. There are numerous things to take care of, and especially for working professionals, it is a hectic way of making money.
If you want to still day trade, I recommend you go through these best crypto trading tools, which will help you ease your day trading life a bit.
On the other hand, you can subscribe to some good crypto signals groups that provide automated trading bots which do the trading on your behalf just in one click.
This is ideal for working professionals !!
Now you let us know: What are your thoughts on day trading of crypto? Which exchange do you use for day trading of cryptos if you do anything at all?
Let us know in the comments section below; we will be waiting 🙂
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