The trading coin on Binance is a keyword that many people mention and suggest when learning about cryptocurrencies and cryptocurrency trading. However, on Binance, there are many different types of trading orders; which one to choose? This article is definitely for you if you find Binance trading too complicated and confusing.
So what is a trading coin? How is it different from buying and selling regular coins? Before going into the detailed steps on how to trade currencies on Binance, Investing will learn about the term “Trade coin” and the types of trading orders on Binance.
Table of Contents:
What is a Trade coin?
Unlike buying/selling standard coins, you need to use cash, place an order to buy that coin, and own that coin in a crypto wallet. When necessary, execute the order to sell that coin and the money is transferred directly to the bank account. This is how to buy and own physical gold.
Unlike forex or gold trading, where you change the exchange rate of pairs or gold on the market, what you change is only the exchange rate; you don’t own any assets.
Meanwhile, trade a coin pair on Binance (assuming you have an AB coin pair), which means you use your existing B coin to buy coin A or sell your current currency A to receive coin B. And when you bought a coin, you own the currency and can transfer it to that wallet in any other account on Binance or outside of Binance.
- The chart shows the coin pair as the price of the previous coin A.
- You will buy coin A when the price is low and you expect it to go up.
- Conversely, when the chart shows coin A going up and maybe about to correct down, you would sell A.
How to choose coin pairs to trade on Binance?
When entering the Binance exchange, there are many different coin pairs. So what do coin pairs mean? Which coin pair do you want to trade?
A pair of coins consists of 2 parts:
The first coin is the base coin that you can buy or sell.
The back can be a coin, a stablecoin or 1 unit of fiat currency is the unit of valuation.
The Binance exchange has three coin pairs: coin/coin or coin/stablecoin or coin/fiat.
1. Money/coin
On Binance, there are currently five valuation coins, including BNB, BTC and three types of Altcoins: ETH, TRX, XRP.
Some examples of coin/coin pairs: ADA/BNB, DASH/BNB, EOS/BNB, BNB/BTC, DOGE/BTC…
If you want to buy a base coin from 1 quote coin, you need to place a BUY order with that coin pair.
If you want to sell a base coin to get the quote coin, you need to place a SELL order with that coin pair.
For example,:
You have BTC and you want to buy BNB. You have to choose to exchange the BNB/BTC pair and place an order to BUY BNB.
2. Currency/stablecoin
Examples of coin/stablecoin pairs: BTC/USDT, ADA/BUSD, BCH/BUSD…
If you want to buy a base coin from 1 quote coin, you need to place a BUY order with that coin pair.
If you want to sell a base coin to get the quote coin, you need to place a SELL order with that coin pair.
For example,:
You have BTC and you want to buy BNB. You have to choose to exchange the BNB/BTC pair and place an order to BUY BNB.
2. Currency/stablecoin
Examples of coin/stablecoin pairs: BTC/USDT, ADA/BUSD, BCH/BUSD…
If you have a stablecoin B and want to buy a coin A, you will have to choose pair A-B and place a Buy A order.
If you have an A coin and want to sell A coin to get stablecoin B, you need to place a SELL order for coin A.
For example,:
You bought BTC at a low price, now BTC has increased, you want to collect USDT to take profits, you have to choose the BTC / USDT pair and place an order to sell BTC.
3. Fiat money / money
Fiat money is a form of government-issued currency that is considered legal.
The Moneta/Fiat pairs are XRP/AUD, TRX/EUR, ADA/AUD…
If you have GBP in your Binance account and want to buy BNB coins, you need to select the BNB/GBP pair and place a Buy BNB order.
Types of trading orders on the Binance exchange
A limit order is a type of order used to buy coins when the price drops to a specific price (or sell coins when the price rises to a certain level).
- A market order is a type of order used to instantly buy a coin at the current price. This type of order is used when you are not too worried about the price movements of the coins. Or, when the price of the coin fluctuates too much, you don’t have time to place a limit order. You should choose a market order.
- A stop-Limit order is used to buy coins when the price rises at the set price or sell coins when the price drops to the set price.
- OCO orders can be understood as combined Limit and Stop-Limit orders. If you want to buy coins at a low price at the same time and buy coins when the price rises to a specific price, you can use an OCO order. Or, on the contrary, you want to sell when the currency is at a high price and at the same time reduce the loss when the coin drops to a specific low price. You can also use OCO orders.
So you have a good knowledge of trading coins and trading orders on Binance. At this point, you have also distinguished the difference between buying/selling coins on an ordinary basis and trading coins. In the following article, Investiki.com will guide you to trade coins on Binance to better understand the terms mentioned above.
