Are you interested in day trading on Binance? It doesn’t matter if you are looking for a part-time or full-time trading career, Binance is a great place to start. If you didn’t know, it is the world’s largest cryptocurrency exchange by trade volume.
What is day trading?
Buy an asset and then sell it for more than you paid for it! This is exactly the same as trading cryptocurrency.
On the other hand, there are different types of trading goals that are determined by how long you would like to hold an asset before you sell it:
- short-term trading
- long-term trading
Day trading is very short-term trading, and it can mean holding an asset for just a few seconds, to a couple of hours. The idea is that you sell your asset before the end of the day, hoping to make a small, but quick profit.
Popular trading approaches
There are lots of different methods that people use to day trade, but the main two are based on either speculation or chart analysis.
Speculation is when a trader believes a price will go up or down because of a certain event. In the above example of Peter, he purchased Ripple because he saw a positive news story. There was no guarantee that the price would go up, but he speculated that it would be based on his own opinion.
- Chart analysis
The other day trading cryptocurrency strategy often used is chart analysis. This is where traders study the price movement of a particular cryptocurrency and try to guess which way it will go, based on historical price movements. When analyzing charts, you can look at how a price moves every few seconds, minutes, or even hours.
Is Binance a good exchange to daytrade?
After you got a basic idea of the day trading, it is time to select a reliable exchange to actually start buying and selling your crypto assets. There are multiple platforms that you can use for it. To my mind, Binance is one of the best options for day trading. It has the lowest fees out of any other exchange, a great volume, and multiple crypto pairs as well as powerful servers to handle all the transactions in time.
There would be 3 main aspects that you want to consider when choosing an exchange.
- Variety of crypto coins
Firstly, ensure it has a wide variety of popular coins and has a high trading volume. This ensures there will be sufficient activity on the exchange for trading purposes. Ideally, you would be looking at one which has a $0.5–1+M trading volume every 24 hours. Binance has traded $1.9M in the last 24 hours and has almost 250 different trading pairs.
- Trading fees
Sometimes exchanges will have different fees with different criteria for the same exchange. For example, with Binance they have a 0.1% fee for trades if you pay with the local coin being traded; but if you pay with Binance Coins then they will half the fees for the first year, resulting in only 0.05% fees per trade.
- Funds withdraw
The third thing to look at is how easy it is to withdraw funds from this particular exchange. Check fees, criteria, verification, limits, etc. Once you have made profits you will want to be able to withdraw them without having problems or paying large fees.
How to day trade on Binance?
Binance is a leader in the altcoin trading world. Their cryptocurrency trading platform serves as the most affordable and secure place to buy and sell cryptos. With more than 300 different coins available, many crypto day traders have made this place their home.
Yet despite its reputation as a destination for crypto traders, it’s not exactly easy for users who lack a traditional trading or investment background to navigate their way around.
In this piece, I will walk you through, show how to use Binance, and conduct a day trade on the exchange.
Sign-up on Binance
How to day trade on Binance? Obviously, the very first thing you should do is to create your account.
This includes citizens of the member countries in the UN Security Council Sanctions List, the Office of Foreign Assets Control of the U.S. Treasury Department (OFAC), among other groups.
The terms also state each user must be at least 18 years of age. Binance reserves the right to cancel or freeze any account If the terms are disobeyed.
If the restrictions do not apply to you, you can sign up. And this is where the good things begin. You have probably heard about the referral programs where you can make some extra money and half your trading fees. So if you register your account via this link, you will get a 20% commission kickback and save 45% on your trading fees forever. And those are not all the benefits you will get.
If you have friends who are also interested in crypto trading, you can share the above-mentioned registration links with them to earn an additional $10 reward from CashbackApp when they start trading on Binance. Don’t miss the opportunity.
After you fill in the required fields, click “Create Account”, a confirmation link will be sent to your email address. Once the link is clicked, your Binance account is ready to be used.
Binance.com does not require you to do a mandatory KYC check, and you can trade crypto to crypto without any verification. However, if your skip KYC, your daily crypto limits will be lower (up to 2BTC) but you can increase these limits. Keep in mind, that verification will be required in case you plan on having fiat-crypto transactions.
If you are a US citizen, there is a dedicated version called Binance.US which all the US citizens can use after verifying their nationality through photo ID proofs.
Make a deposit
Did you know that you start day trade on Binance with a few hundred dollars? All you need to do is to fund your account. There are 2 options available here:
- Transfer Crypto coins
If you already own base cryptocurrencies like BTC or ETH or USDT, you can easily transfer them from other exchanges like Coinbase or from your wallet. So that you can trade them against other cryptocurrency pairs.
In order to move money from your crypto wallet, navigate to the “Funds” tab once again, and click “Balances.” Next, either scan the QR code from your cryptocurrency wallet or paste in the address and then send it.
Once that’s complete, wait for the transaction to process and you’ll be ready for trading.
- Buy crypto coins
On the other hand, if you don’t have any of these base currencies, buy some directly from the Binance exchange using a credit/debit card.
Binance has a feature that allows users to purchase certain cryptocurrencies directly with their Visa or Mastercard credit card. Navigate to the “Funds” tab and select “Buy With Credit Card.” to be able to 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 with a government-issued ID while buying crypto through this option because you will be exchanging cryptos for fiat currencies.
Cryptocurrency purchases by credit card are limited to BTC, ETH, and LTC at this time.
There is a minimum processing fee of $10 or 3.5 percent of the total order – whichever is more expensive. After completing this step, you will need to confirm your billing information, email address as well as your identity.
Once all of the required steps have been completed, the newly purchased cryptocurrency should reach your Binance wallet within 10-30 minutes. And that’s where you can start your day trading.
Place a trade
You can trade with BTC (Bitcoin), ETH (Ethereum), USDT (Tether), or BNB (Binance Coin). The crypto pairs available will vary depending on which coin you use. Bitcoin trading pairs have the greatest variety (300+). Ethereum and Binance Coin have a considerable number of altcoins paired against them as well. Meanwhile, Tether is primarily used to exchange for bigger coins like Ethereum, Litecoin, and Ripple.
My personal recommendation is to stick with BTC pairs. It means you should have deposited bitcoin in the previous step and now just need to find the right pair from the list of available coins.
Let’s go back to the home page now that your funds are ready to be used.
Here, you will again see all the cryptocurrencies that are tradable on Binance and their respective markets.
For this example, let’s say you previously deposited BTC into your account and now wish to trade it for NEO.
Step 1. Since you want to spend BTC in order to get NEO, click the “BTC Markets” tab and then type NEO into the search bar.
Step 2. Click the appropriate row and the page where trading takes place will open.
Step 3. The trading module is displayed. This page may look intimidating, but you can easily get the hang of it with a bit of practice.
- The left section of the screen is known as an order book. Here, you will see all active buy and sell limit orders. A limit order is simply an order that will only be placed at the user’s desired price, given there are buyers or sellers interested at that level.
- The right side of the page is more simple – the above section shows the other cryptocurrencies that can be traded and the lower section shows the public trade history of the market currently being viewed.
- The center of the page has a chart feature that shows real-time price action and technical analysis indicators.
Step 4. Just below the chart is where you will actually execute the trade, so let’s buy some NEO. If the certainty of execution is your priority, select market order. That’s where you have 3 options: limit, market, and stop-limit order. What’s the difference?
- Limit Orders
The price will be set at the last trade price by default. You can manually edit this number and select whatever you would like. Choosing a price far above the closest sell orders in the order book will result in a “market buy” up to that price-point (or as close to it as the amount your spending will afford you).
- Market Orders
This is the easiest option. You only have to provide the amount you are looking to spend and submit your order and then you’re done.
- Stop-Limit Orders
A stop-limit order allows you to minimize losses when you’re not around to what the price action in live time. The stop is the price where your limit order becomes active on the order book. The limit is the price where your position will be sold.
Now you just need to enter the amount of BTC desired to be spent and how much NEO you want to purchase. Binance has a useful shortcut for entering the purchase amount and it is based on a percentage of your bitcoin balance (or any other appropriate trading pair). And click on the “Buy NEO” button.
Since this is a market order, the trade for NEO should have completed instantly, but that is most likely not the case if you selected to limit or stop-limit order.
To check on the status of your order, look towards the bottom of the page where it says “Open order.” if your order has not yet executed, in other words, is still “open,” it will appear in this box until it has either been canceled or filled.
When it has been filled, it will show up in the lower box highlighting your 24-hour order history.
Step 5. If you want to sell, simply follow this same process but execute a market or limit sell order.
Withdraw your funds
Binance is susceptible to hacks like many other websites, so it’s recommended funds are only held on the exchange for as long as necessary. After you are done trading, move the money to a secure wallet.
In order to withdraw, navigate back to the “Balances” page. If you would like to see only the cryptocurrencies you have a substantial balance in, check the “hide” box.
Now select the withdrawal button in the NEO row and have your destination address or QR code handy. Paste the address and select how much you want to withdraw.
Click submit and wait for the transaction to complete.
Binance day trade strategies
- Stop losses
Set yourself a stop loss. A stop-loss is when you enter a price that you want to automatically exit your trade.
For example, if you bought Ethereum at a price of $700, you could set yourself a stop loss of 10%. This means that if the price of Ethereum went down to $630, the system would automatically sell your investment. It would protect you from a sudden decline in price, or if you were not at your computer to do it yourself.
Don’t forget to set trading targets. This is really important as if you are planning to do this as your part-time or full-time job, you need to have expectations as to how much you hope to make. In other words, you should have a business plan for your trading goals.
Experienced traders will rarely risk more than 1% of their total bankroll. This means that if you have $1,000 to invest, you never place more than $10 on each trade. Although this sounds like a small amount, in the long run, this will protect you from going broke.
- Loss happens
Day trading will not always go to plan. You have to be able to accept losses when they happen, as this is a part of trading. Even the most successful traders in the world make losses, as it is impossible to always make the correct prediction.
Tips on how to pick crypto for day trading
- The very first advice that you should follow if you decide to invest in cryptocurrency – only invest what you are willing to lose. Do your own research and learn from as many people as you can to gain a well-rounded understanding of cryptocurrency trading. Due to market volatility, you can lose thousands of dollars in hours.
- Look at the price of the coin and trading volume. These aspects are good to look at separately as well as together. The price can be related to your risk profile. Generally speaking, if a coin is very cheap then there could be more risk involved for two reasons. Firstly, the low price could be an indication of low community trust or poor project management/communication. This creates low demand and thus lowers the value of the coin. The second reason is that if a coin is valued at $0.02 and it drops by only 1c then your investment will be cut in half just like that.
- In regards to the trading volume of a coin, the concept is similar to that of an exchange. You want something that everyone is buying/selling as it shows a degree of community confidence, as well as liquidity — the ability to realize your profits quickly or move them into money you can use.
- One aspect NOT to get fooled with is by seeing a coin with a high trading volume, but then you see it is really expensive and think it is not liquid. For example, a coin has a trading volume of $1,000,000, but you see it costs $1,000 per coin. This means only 1000 coins are traded over the 24hr period. Compare this to a coin with the same trading volume but a coin cost of $1 meaning 1,000,000 coins are trading every day. This should not affect your decision primarily because the amount you will be trading stays the same in $ value, not in the number of coins. Your $100 in the expensive coin, is still only worth $100 in the cheap coin.
- Check the project itself, the age of the coin, the team behind it, the community engagement, etc. It would help you understand if the overall coin value is likely to increase. Looking at what is called the ‘Roadmap’ of a coin normally will identify key dates along a timeline in which project updates or releases will occur. This can be good times to just hold rather than trade as these can bump the price up a bit.
- After you picked up the coin, start watching the trading patterns. I would suggest you look at this for a few weeks to get an idea of how it reacts to certain times of the day and week, and how it reacts to news, etc. This will help you maximize your trades and limit the sudden losses from bad trades which are predictable.
What is the best time to day trading on Binance?
Binance day trading is similar to other exchanges and it is difficult to say what the best trading time is. As I mentioned above, the best thing to do is to analyze the charts and watch the trading patterns of your coin.
Here are my personal observations.
If the market ran through upwards continuously for 5 sessions, then the 6th day will be weak or sideways. What does it mean? That you should short first thing in the morning around 9:20 am on those stocks where the open price and the high price are the same.
The best intraday trading timings are: 9:20 am , 9:54 am , 10:54 am 11:54am : 1:30pm, 1:54 pm 2:54 pm
Don’t miss the morning hours between 8:30 am to 9 am. Pick those stocks which have a positive bias.
The gap between 9:30 to 9: 54am is a perfect time to buy or short:
- At 9:30 am if the current price is less than the open and the relative strength index is above 50%, then short.
- If the stock price is less than the open and the RSI is below 50% Buy. Have a strict stop loss.
- If the current price is above open price and the open price is above the previous close, then you should buy. Note the current price should be equal to or above the average price or the tick price. Apply the same logic.
As you start to day trade, read the news, look at articles online, subscribe to the coin’s newsletter, register on twitter, get involved in forums. Do everything you can to get information first to benefit from the market swings.
Start it slow to practice your trading skills before you start a big game.