Binance is an exchange platform for cryptocurrencies, and is the one used by the CryptoGrinders team due to its stability and security. To use it, you first need to have converted some fiat into cryptocurrency, as well as set up a wallet.
New entrants to the cryptocurrency market often struggle to make sense of how to trade cryptocurrencies. For those that are unclear, here is a brief summary.
Converting Fiat to Cryptocurrency
This is required for anyone who wishes to participate in cryptocurrency investment. There are a few companies that provide such a service, but we recommend Gemini.com. It allows you to convert fiat into Ethereum (price as of writing ETH 774.37 USD) or Bitcoin (price as of writing BTC 15,382.20 USD).
To store cryptocurrency, you need a wallet. We recommend MyEtherWallet, a simple and secure wallet that allows the storage of ETH and any other ERC20 based token. You can check out how to do so //medium.com/@info_53583/setting-up-myetherwallet-ad4956a729b9" data-href="https://medium.com/@info_53583/setting-up-myetherwallet-ad4956a729b9" class="markup--anchor markup--p-anchor" target="_blank" style="background-color: transparent; color: inherit; text-decoration: none; -webkit-tap-highlight-color: rgba(0, 0, 0, 0.54); background-repeat: repeat-x; background-image: linear-gradient(to right, currentcolor 100%, currentcolor 0px); background-size: 1px 1px; background-position: 0px calc(1em + 1px);">here.
Diversifying into Altcoins
It is difficult to find a portal that allows conversion of fiat to an alt coin like IOTA (price as of writing IOTA 3.68 USD); IOTA has to be purchased using BTC or ETH. This is where an exchange come in.
Binance is an exchange that allows users to convert one cryptocurrency to another. It has a simple user interface, and in this guide we show you a step by step on how to set up an account and trade with it.
Go to https://www.binance.com
Click on Register
The Referral ID is an optional field that can be used if a friend has introduced you to Binance with his Referral ID. Every time you make a trade, 25% of the fees that would have gone to Binance are instead sent to your friend.
An email will be sent to you to verify your Binance account.
Head on to your inbox, and click on the link. It will divert you to a page that shows your account has been activated.
Once that is done, your account is now active. Click on ‘Login’ to enter your account.
Binance has an additional measure to ensure that you are not a bot, namely dragging a puzzle piece to complete the picture.
Simply slide the button until the piece fits the picture, and you will be able to enter the exchange
Binance recognizes that cryptocurrencies need to be secure; if an account is hacked and has its funds transferred out, there will be no redress for the victim. As such, it has set limits on the accounts based on how secure they are.
At the top right, this account is currently Unverified, and as such is only granted Level 1 clearance: a maximum of 2 BTC can be traded in a day. To increase the level, a user has to take two steps.
First, the Two-Factor Authentication must be enabled, either using Google Authenticator (download the application) or SMS authenticator. This will be triggered every time a withdrawal is made, or when there are modifications to security (password change).
Second, Binance requires you to submit a photo of your passport, passport cover, and a selfie of you holding your passport. After about 3 working days, they will verify the account.
This brings a user up to Level 2, where the withdrawal limit is raised to 100 BTC per day.
Binance Exchange Page
Enter the Exchange at the top left of the page, and click on ‘Basic’. This brings you to the chart page, where charts of various coins shown. While it looks complicated, there are 3 main portions to take note of.
The chart in the center of the page shows the price of coin against another. In this case, I have chosen to look at Kyber (price as of writing KNC 2.54 USD) against ETH. Simply put, it tells you how much ETH is required to purchase a single KNC.
Cryptocurrency To Cryptocurrency Table
Here, you can see the price of various alt coins against the main cryptocurrencies. This is a price list of how much each alt costs, in terms of BTC, ETH, BNB or USDT. If you used Gemini to purchase your cryptocurrency, you would only have BTC or ETH available to trade. This chart shows how much BTC or ETH you would be spending to purchase alt coins.
BNB is Binance’s own token, and can also be used to trade for alt coins. Anoher important use of BNB tokens is to pay for gas. Each transaction has a fee attached to it; using BNB to pay the fee gives you a 50% discount. It is recommended to get some BNB tokens just for trading!
Trading on Binance
With an understanding of the charts and prices, it is time to learn how to interact with the trading portion of Binance.
There are 2 main ways to trade on Binance.
By tapping on the Market tab on the exchange page, it allows you to buy or sell the token at the price it is going for currently. In this example, I would be buying or selling KNC tokens in exchange for BTC at the market rate. The amount I want to buy can be manually keyed in (e.g. 500 KNC), or I could use the short cuts below. Binance will automatically calculate how much 25% of my Bitcoin would be worth in KNC.
For instance, if I had 10 BTC, clicking on 25% would indicate that I wish to spend 2.5 BTC to buy as many KNC tokens I can at the current price. This works the same for selling: clicking on 25% would mean that I wish to convert 25% of my KNC tokens into Bitcoin at the market price.
Trades are virtually instant, and there is almost no waiting time before the tokens in my account change. Market Rate trading is ideal for trades that are urgent.
It can be difficult to constantly monitor the prices of tokens for trading. In that case, the Stop-Limit trading is extremely useful.
The ‘Stop’ field indicates the price that trading begins. For example, if I wish to purchase KNC at 0.0016 BTC, I would put that in the ‘Stop’ field. When the price of KNC hits that target, Binance execute the stop-limit order, and will start the purchase for me.
The ‘Limit’ field indicates the maximum price that I am willing to trade at. If I wish to pay no more than 0.0017 BTC per KNC, I would fill that number in the ‘Limit’ field. Once the price is reached, Binance will stop trading.
The ‘Amount’ field indicates the total amount I wish to purchase. The entire process ends when Binance has traded the specified amount within the Stop-Limit range.
Here is the example provided by Binance:
The last traded price of BNB is 0.000165 BTC, and the resistance is around 0.000169 BTC. If you think that the price will go higher after the price reaches the resistance, you can put a Stop-Limit order to automatically buy more BNB at the price of 0.000170 BTC. This way you won’t have to continuously watch market movements waiting for the price to reach your target price.
Approach: Select “Stop-Limit” order, then specify the stop price to be 0.000170BTC and the limit price to be 0.000172BTC, with quantity as 10. Then click the button “Buy BNB” to submit the order.
Deposits and Withdrawals
This section is focused on how to move your cryptocurrencies in and out of Binance, be it for secure storage in a wallet off the exchange, or sending some tokens to an upcoming ICO.
To enter this page, click on the ‘Funds’ tab at the top right of the age, and click on ‘Deposits Withdrawals’.
In this page, you will be able to see all the coins that you have on the Binance platform, and have the option to deposit or withdraw coins from the exchange.
Tapping on ‘Deposit’ will show the address on Binance. Simply copy and paste that into whichever wallet you are using to deposit, and the funds will be transferred. The opposite applies for Withdrawal: copy and paste the address of your wallet, as well as how much to withdraw. The funds will then be taken out of Binance and put into your wallet.
Open orders are Stop-Limit orders that have yet to be fulfilled. Click on ‘Orders’ to access this page. It will show all orders that have not be completed.
If for whatever reason you wish to halt a Stop-Limit order before it has been executed, you may come to this page to cancel it.
Binance is a simple to use platform that allows for the trading of various cryptocurrencies, and allows the purchase of alt coins that are not available for fiat purchase. It is a great way to diversify your cryptocurrencies, which helps to reduce risk.