Binance is the largest crypto exchange and has a large variety of different cryptos to invest in and trade.
1. Once you have signed up and loaded your account with currency, click at the top on Trade. A drop-down tab will open, select classic.
2. Using the search bar on the right-hand side, find the trading pair you’re looking for. We’re looking to buy Bitcoin (BTC) with British Pounds (GBP), so we search for BTCGBP.
3. The simplest form of trading is Spot trading so if you’re just getting started, you should select this.
4. There are four kinds of order you can place: Limit, Market, Stop-Limit and OCO. For buying we will just focus on Limit and Market orders.
- For Limit orders, you enter the price (limit) that you’re willing to enter a buy order at. For example, I would like to buy 0.5btc at a price of £20,000 per Bitcoin.
- A Market order fills your order as quickly as possible, at the best available price, and you just enter the amount you would like to purchase, such as 0.5btc.
5. Once you’ve entered your order correctly, you press the green BUY button. Your order will appear under Open Orders until it has been filled.
6. After your order has been filled, your next step will be to close the trade by selling at a profit. You could enter a Limit order at the price you’d like to sell at, or Market sell if you’re at a profit level you’re happy with.
However, a sensible risk management tool is to use ‘stops’. A certain level is determined as the trigger point – this is the stop. Once price reaches the trigger point, a limit order is placed on the market. For example, in order to minimise losses if the price of Bitcoin reaches £15,000, I want to put in a sell order at £16,000. £15,000 would be the stop and £16,000 would be the limit. I could cancel this stop-limit order and Market sell if the price reaches £30,000.
A more elegant solution to do this is by using an OCO order (One Cancels the Other). For example, I want to take profit at £30,000, but minimise losses if price gets down to £15,000 by selling at £16,000. An OCO order would put in both orders and fill whichever one is met first and cancel the other.
Disclaimer: Nothing within this article should be misconstrued as financial advice. The financial techniques described herein are for educational purposes only. Any financial positions you take on the market are at your own risk and own reward. If you need financial advice or further advice in general, it is recommended that you identify a relevantly qualified individual in your Jurisdiction who can advise you accordingly.