How to Trade Binance Coin 2021
Binance Coin (BNB) is a digital currency backed by the exchange of the same name. Although it has limited functionality, it is still a top-10 cryptocurrency in terms of market valuation and trading volume.
This makes sense when you consider the billions of dollars traded on the Binance exchange each and every day.
Wondering how to trade Binance Coin online or via your mobile phone? If so, this guide will show you everything you need to know.
We cover the basics of how to trade Binance Coin, which platforms to consider, what risks and rewards to take into account, and how to get started an account today.
What is Binance Coin Trading?
Put simply, by trading Binance Coin, you are speculating on the cryptocurrency’s future value.
With that said, you will be trading it against a fiat currency like the US dollar or Japanese yen. Or, you might be trading Binance Coin against another digital currency like Bitcoin, EOS, or Ripple.
Either way, each Binance Coin pair will have an exchange rate. For example, if you are trading Binance Coin against the US dollar - the pair might be priced at $27.50. Your job is, therefore, to determine whether the price will rise or fall.
Sound familiar? Well, it is. That is to say, when learning how to trade Binance Coin you will quickly realize that the fundamentals are not different to stocks, forex, commodities, or any other asset class for that matter.
Ultimately, the overarching objective is to correctly predict whether Binance Coin will go up or down in value - relative to another fiat or digital currency.
To ensure you understand the concept clearly before moving on, let’s look at a real basic example of how to trade Binance Coin.
- You decide to trade Binance Coin against the US dollar
- The pair is represented as BNB/USD and is currently priced at $25.10
- You think that Binance Coin is undervalued against the US dollar, so you place a buy order
- You stake $500
- A couple of days later, BNB/USD is priced at $29.40
- This works out at a gain of 15.9%, so you cash out with a sell order
- On a stake of $500, you made a total profit of $79.50
Once again, the above example shows that trading Binance Coin is no different from any other financial marketplace. The main concept is ultimately to predict which way the price of the cryptocurrency will move. Predict correctly, and you make money.
How Does Binance Coin Trading Work?
Like all cryptocurrencies, there is a lot to learn before you started trading Binance Coin. You need to know everything from what dictates its price, what pairs you can trade, and which markets are worth focusing on.
Let’s explore these metrics in more detail.
Binance Coin Trading Price Movements
Binance Coin is traded on public exchanges - the same way as any financial instrument is. This means that the value of the cryptocurrency will continue to move up and down on a second by second basis.
And of course -both short-term and long-term trends will present themselves. This is dictated almost exclusively by demand and supply. So, if more people in the market think that Binance Coin represents a viable investment, then naturally, this will result in more buyers.
And in turn, when there are more buyers than sellers, the price of Binance Coin will rise. If the opposite happens, and sellers outweigh buyers, then expect the value of Binance Coin to move southwards.
In terms of the specifics, seasoned traders will look at Binance Coin pricing charts with the view of looking for potential trends. They do this by using technical indicators like the Relative Strength Index and MACD.
Fundamental news can and will influence the price of BNB too. This might be something as simple as a large-scale company deciding to use the Binance Coin blockchain for its own operations.
Note: It isn’t just Binance that allows you to trade BNB coins. On the contrary, Binance Coin is available to trade at hundreds of online exchanges.
Binance Coin Trading Pairs
As we briefly covered earlier, when trading Binance Coin, you will be doing so via a pair. This works in the same way as forex, insofar that each pair will contain two currencies.
If trading a fiat-to-crypto pair, then you will likely be trading Binance Coin against the US dollar. However, some platforms also offer this cryptocurrency against the British pound, Australian dollar, Euro, and more.
You can also trade Binance Coin against other digital currencies.
- BNB/ETH represents the exchange rate between Binance Coin and Ethereum.
- Similarly, BNB/XRP would see you trade the future price of Binance Coin against Ripple.
It can be challenging to trade crypto-to-crypto pairs as a beginner, as there is no prevalence of a fiat currency. This means that it can be difficult to quantify your profits and losses.
Long or Short-Term Trading
When learning how to trade Binance Coin, you need to think about which strategy is right for you. For example, if you’re a complete newbie then you might want to consider a long-term ‘buy and hold’ strategy.
As the name implies, this means you will purchase some Binance Coins, keep them in your cryptocurrency wallets, and then sell the investment at a later date. Hopefully, this will be at a much higher price than you originally paid.
Alternatively, if you’re a skilled trader looking to place lots of positions throughout the day, you might consider CFDs.
Either way, let’s explore how each Binance Coin trading strategy works.
Trade and Own Binance Coin
The easiest way to trade Binance Coin is to use an online broker and keep hold of your investment for several months or years. This is, of course, on the proviso that you believe Binance Coin will be worth much more in the future.
The reason that this traditional investment strategy is worth considering is that you don’t need to know a thing about chart analysis or technical indicators. In turn, short-term pricing swings should be of no interest to you.
As a side tip, if you are looking to take a long-term Binance Coin strategy, it’s best to use a commission-free platform like eToro. In doing so, you can keep your trade open for as long as you like without getting hit by ongoing fees.
Binance Coin Trading
If you’re a hardcore trader that is looking to profit from ever-changing pricing swings, then you likely won’t be interested in a long-term buy and hold strategy.
On the contrary, you’ll want to profit from both rising and falling markets - attempting to catch each and every market trend that arises. In order to achieve this goal, you generally have two options.
Firstly, you might consider trading cryptocurrency CFDs. These are financial instruments that track the real-world price of digital currencies, meaning you don’t own the asset. But, you can usually trade commission-free, apply leverage, and even engage in short-selling.
Unfortunately, cryptocurrency CFDs are not available to citizens of some countries - namely the US, UK, and Hong Kong.
This shouldn’t prevent you from actively trading Binance Coin though. Instead, you can just use a traditional cryptocurrency exchange. Sure, you might not be able to deposit funds with a fiat currency. But, you’ll have hundreds of pairs at your disposal.
Would You Consider Trading Binance coin BNB?
How to Trade Binance Coin Online - Setting up a Trade
If you already understand the fundamentals of trading online, then you might choose to skip this section. However, if you are learning how to trade Binance Coin for the first time, then it’s super important to understand how to correctly set up an order.
Let’s explore the main order types that you should incorporate into your Binance Coin trading strategy.
Buy or Sell Order
Whether you’re trading stocks, wheat, oil, Binance Coin, or dust - each and every trade requires a buy or sell order to open the position.
In a nutshell:
- Place a ‘buy order’ if you believe the Binance Coin pair will rise in value
- Place a sell order’ if you believe the Binance Coin pair will fall in value
We should also note that you need to place either a buy or sell order to close your Binance Coin trade.
- If you entered the trade with a ‘buy order’ you will close it with a ‘sell order’
- If you entered the trade with a sell order’ you will close it with a buy order’
When you have decided on a buy or sell order, you also need to think about what price you want your broker to execute the trade at. This is a choice between a market and a limit order.
If, for example, BNB/USD is priced at $25.00 and you want to have the trade executed instantly, you should place a ‘market order’.
In doing so, your trade will go live in a matter of milliseconds, likely at a price just above or below $25.00 (due to second-by-second price movements)
However, you might look at BNB/USD and think that at $25.00 - this is a bit high for your liking. Instead, you might want to buy Binance Coin when it is worth $23.00.
In this instance, you would need to set up a ‘limit order’ - specifying the exact price that you want your trade executed by the broker.
By placing a buy/sell and market/limit order, you have successfully entered a Binance Coin trade. At this point, the trade will remain open until you decide to close it.
However, any skilled trader that knows the game inside out will tell you that you should never place a trade without an exit strategy. This should take into account two targets - the most you are prepared to lose on the trade, and how much you wish to make.
In order to facilitate an exit strategy - you need to place a stop-loss and take-profit order.
In a nutshell:
- Take-profits orders tell your broker to close the Binance Coin trade when a specific price target has been met. For example, gains of 4%.
- Stop-loss orders tell your broker to close the Binance Coin trade when you are in the red by a specific amount. For example, losses of 2%.
Although not mandatory, setting up both of these order types is crucial in terms of risk management.
This is because you are limiting the amount that you can lose from the trade, rather than leaving it to fate. Equally, you are setting yourself a clear profit target, ensuring that greed doesn’t get in the way.
Here’s a real-world example of how to set up stop-loss and take-profit orders when trading Binance Coin.
- You place a sell order on BNB/USDT as you think the value of the pair will go down
- You enter the trade at a price of $24.50
- You want to limit your losses to 1%
- Your stop-loss order price is, therefore, $24.74 (1% above entry price)
- You want to make gains of 3%
- Your take-profit order price is, therefore, $23.77 (3% below entry price)
Once you place the above two orders, your broker will automatically close your trade when one of the two prices is matched.
For example, if BNB/USDT hits $23.77, your trade will be closed at a profit of 3%. Or, if the pair hits $24.74, the trade will be closed at a 1% loss.
Ready to Start Trading Binance coin BNB?
How to Make Money Trading Binance Coin
When learning how to trade Binance Coin online, you need to have a firm grasp of what it takes to make money.
The most important considerations are discussed below:
The amount that you stake on your Binance Coin trade will influence how much money you make or lose. Of course, the more you stake, the more profit you can generate in the long run. However, staking too much can result in you losing all of your trading capital.
As such, it’s important to follow the basic principle of bankroll management. This simply dictates how much you should stake based on your current capital balance. For example, you might decide that 2% is the most that should be risked on a single Binance Coin trade.
This means that a $500 balance should never see a trade size higher than $10. The maximum dollar amount that you can risk will change after each trade. This is because your balance will go up and down - depending on whether your trades are successful or not.
For example, if your balance increased to $700, then the 2% rule would permit a maximum trade of $14. In theory, this allows you to build your capital over the course of time in a risk-averse manner.
Gains in Percentage Terms
Once you have nailed bankroll management, you then need to quantify how much money you are making or losing. The best way to do this when trading Binance Coin is to calculate your returns in percentage terms.
- If you stake $2,000 on a Binance Coin buy order and the cryptocurrency increases by 5%, you make $100 profit
- If you stake $1,000 on a Binance Coin sell order and the cryptocurrency decreases by 20%, you make $200 profit
Ultimately, you should calculate your gains and losses over a period of time - say weekly or monthly. This will allow you to regularly reassess the success or failure of your Binance Coin trades!
Binance Coin Trading Leverage
Leverage can be a great way to boost your trading capital. This is especially the case if you only have a small amount of money and want to ensure your Binance Coin trades are worthwhile.
However, as we covered earlier, those of you based in the US, UK, Hong Kong, and several other countries won’t have access to leverage. Most of Europe can trade Binance Coin with leverage, albeit, this is capped to 1:2. Other countries will get much higher limits.
Let’s look at an example of using leverage can boost your Binance Coin trading profits:
- You stake $1,000 on Binance Coin
- You apply leverage of 1:2
- You make 20% profit
- Ordinarily, your gains amounted to $200
- However, by applying leverage of 1:2, your gains are double to $400
There are some cryptocurrency trading sites located offshore that offer leverage of over 1:00 to all nationalities - without requiring any ID. However, these should be avoided as you won’t have the backing of a financial regulator.
Fess to Trade Binance Coin Online
All online brokers charge fees to trade Binance Coin. This comes via both trading and non-trading fees - such as deposits and withdrawals.
The main fees you need to look out for when trading Binance Coin are listed below:
Binance Coin Trading Commission
First and foremost, it’s actually possible to avoid commissions when trading Binance Coin. This is because regulated broker eToro offers a 100% commission-free service on all of its markets - including cryptocurrencies.
However, most online brokers do charge commissions, and it’s usually a percentage rate. For example, Coinbase charges 1.49% on all trades.
You’ll pay this when you enter the trade, and again when you exit. The commission is multiplied against your stake, the more you trade, the more you pay.
Binance Coin Spread
When you trade Binance Coin online, you will always see two prices. This is the ‘buy’ price and the ’sell price’. Although small, this gap in pricing is how the broker ensures it always makes money.
As such, the bigger the difference between the two prices, the more you are indirectly paying to trade Binance Coin. For example, if the spread amounts to 1.5%, then you are only in profit if you make gains in excess of 1.5%.
Other Binance Coin Trading Fees
Other potential fees to consider when trading Binance Coin include the following:
- Deposit/Withdrawals: You might need to pay a fee to deposit and withdraw funds. Binance charges 2% on debit card deposits while Coinbase charges just under 4%. eToro charges 0.5% on all payment methods - including e-wallets. .
- Inactivity: Some platforms will charge you a monthly inactivity fee if your account is marked as dormant. This is usually after 1 year, but we have seen platforms that implement this after just 3 months of inactivity.
- Overnight Funding: If you trade on borrowed margin, then you will need to pay a fee for each day that you keep the position open. This is known as overnight funding or swap-fees.
In an ideal world, you’ll be using a broker that charges 0% commission, low spreads, and minimal deposit/withdraw fees. The best we have come across in this respect is eToro.
How to Trade Binance Coin 2021 - Step-by-Step Walkthrough
In the final section of our How to Trade Binance Coin Guide, we are going to show you how to get started with a trading account.
Follow the steps below to start trading Binance Coin in less than 10-15 minutes!
Step 1: Choose a Binance Coin Trading Site
If you want to trade Binance Coin online, you need to find yourself a good broker. You’ve got plenty to choose from, so do some homework.
These are the things that you should be inquiring about before signing up.
- Regulation: Is the platform licensed?
- Fees: What fees does the platform charge?
- Payments: What payment methods can you use to deposit and withdraw funds?
- Account Minimum: What is the minimum deposit and trade size at the platform?
- Binance Coin Pairs: Can you trade Binance Coin against fiat currencies, cryptocurrencies, or both?
- Trading Platform: How user-friendly is the trading platform?
- Mobile: Does the broker offer a mobile trading app?
It can take a long time to find a broker that truly meets your needs. If you NEED pointing in the right direction, we would consider eToro.
This is because you can trade Binance Coin commission-free and the minimum order value is just $25. You can instantly deposit funds with a debit/credit card or e-wallet, and getting started takes just minutes. And most importantly - eToro is regulated by the FCA, ASIC, and CySEC, and registered with FINRA.
Step 2: Open a Binance Coin Trading Account
Once you have selected a broker, you’ll need to open an account. If opting for eToro, head over to the provider’s website and click on the ‘Join Now’ button. You’ll need to provide some basic personal information and contact details.
If you have your ID to hand, quickly upload a copy. This will avoid delays when it comes to cashing out your Binance Coin profits!
Step 3: Deposit Funds
You will need to fund your account before you can trade Binance Coin. At eToro, you can choose from the following payment methods:
- Debit Card
- Credit Card
- Bank Transfer
The minimum deposit at eToro is $200.
Step 4: Choose Binance Coin Trading Market
You can trade BNB against the US dollar, Euro, Japanese Yen, and more.
Or, you can trade it against another cryptocurrency like Bitcoin and Litecoin. You can search for the pair you wish to trade or browse the ‘Trade Markets’ section of the website.
Step 5: Place Binance Coin Trade
Once you have selected a market to trade, you’ll need to set up an order. As we covered earlier, this should consist of a:
- Buy or Sell Order
- Market or Limit Order
- Stop-Loss Order
- Take-Profit Order
To execute your trade, click on the ‘Open Trade’ button.
How to Trade Binance Coin Guide - The Verdict
If you’ve read our How to Trade Binance Coin Guide from start to finish, you should now be ready to start buying and selling this popular digital currency.
You can trade Binance Coin against other digital coins like Ethereum and EOS. Or, you can keep things simple by trading it against the US dollar.
The most important thing is that you choose a top-rated broker that offers low fees, heaps of markets, and has a strong regulatory standing.
In this respect, eToro stands out. You can trade Binance Coin commission-free, both fiat-to-crypto and crypto-to-crypto pairs are supported, and the platform is regulated on multiple fronts.
eToro – Buy Binance coin BNB with 0% commission
eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
- Is trading Binance Coin safe?
You can trade Binance Coin online safely by using a heavily regulated broker. Reputable licensing bodies to look out for include FINRA, the SEC, ASIC, CySEC, and FCA.
- How do I trade Binance Coin?
To trade Binance Coin online, all you need to do is open an account with a trusted broker. Then, once you deposit some funds, you can start trading straight away!
- Can you get rich by trading Binance Coin?
If you want to make consistent profits by trading Binance Coin, you need to learn the ropes of technical analysis. Our website has heaps of valuable resources on how to effectively read charts. But, this will still require you to dedicate lots of time!
- Is Binance Coin trading legal in the US?
Yes, you can trade Binance Coin in the US as long as it is not in the form of a CFD contract.
- Can you trade Binance Coin with leverage?
Citizens of most countries can trade Binance Coin with leverage. Notable exceptions include the US, UK, and Hong Kong. If you’re from a location that prohibits leverage, don’t be tempted to use an unregulated offshore broker.