10 Steps to Start Spot Trading on Binance

Spot Trading on Binance: Step-by-Step Guide for Beginners

Are you a beginner who has an interest in cryptocurrency trading and looking for which type of trading is best for newbies on the Binance exchange? Yes, Spot Trading is a beginner-friendly option that allows you to experience crypto trading and gain profit.

You are at the right place to explore the best crypto trading option and learn the steps to get started.

Let’s dive deeper into the topic and become a professional crypto trader.

What is Spot Trading in Binance?

Spot trading is the method of immediate purchase or sale of cryptocurrencies at the current market rate, so-called spot price. The aim of spot trading is to gain digital currencies at their prevailing market price and then sell them at a higher price to generate profit in return.

Spot trading allows you to own your digital asset immediately after you purchase an asset. You can sell it whenever you want. For example, if you buy 1 BTC on a spot market, you own that BTC immediately and will be able to sell whenever you want.

One of the easiest ways to carry out crypto trading is through spot trading, helping beginners to gain profit through cryptocurrency trading.

Step-by-Step Guide to Perform Spot Trading in Binance

Before moving on to the steps for performing spot trading, it is necessary for you to know the basics of Binance exchange account setup. Follow the steps given below to get started.

Step 1: Open the Binance homepage using the link https://www.binance.com/en-IN

Step 2: Create an account in Binance using any of the given options. Verify your account by providing the required details.

Step 3: Perform Identity Verification by clicking into the Identification tab present under the Account tab on the bottom left corner. Ensure to have 2F verification or passkeys for security reasons.

Step 4: Deposit your funds in the trading account through available modes like bank transfer and credit/debit cards. You can deposit funds in any form of fiat currencies or cryptocurrencies.

Let’s move on to the steps to be followed to perform spot trading on the Binance exchange.

Step 5: Click on the option “Trade” at the top. It displays the trading options available on the Binance exchange. Click on the “Spot” option present in the drop-down menu.

Step 6: The spot trading page will be displayed as shown below. It will display components like chart, info, trading data, order book, and spot trading options. The components displayed will enable users in analysing real-time cryptocurrency price movements, allowing users to execute trades effectively.

Before performing spot trading, you should decide whether you are going to buy or sell cryptocurrencies. You should also finalise the trading pairs and the type of spot trading you are going to carry out.

Trading pairs are nothing but the two different digital assets that can be exchanged for one another on an exchange platform.

Step 7: Select the trading pair you wish to trade in Binance exchange. The trading pairs can be selected by clicking on the top left corner of the exchange dashboard.

Generally, the currencies in the trading pair are represented as base and quote currencies.

Base Currency/ Quote Currency

Quote currency is the one that is used to buy or sell the base currency.

Eg. BTC/USDT. In this case, BTC is the base currency, and USDT is the quote currency.

You buy BTC using USDT, and you sell BTC to receive USDT.

Let’s see how spot market trading can be carried out in the Binance crypto exchange.

Spot Market Trading is a process of buying or selling cryptocurrencies at the current market price. It is a method to quickly buy or sell your digital asset. It is also known as a market order.

Step 8: The “Market” option present on the top should be selected. As this type of spot trading allows you to buy or sell at the current market price, only the amount of fiat or cryptocurrencies you are going to invest has to be mentioned.

Step 9: Once the amount is set, click on “Buy BTC” in case of buying or click “Sell BTC” in case of selling. A confirmation pop-up message will appear. Do verify the details and click “Confirm.”

Step 10: Once you confirm your order details, it will lead to placing an order in the order book of the Binance exchange. The order placed will be displayed in the open orders segment present at the bottom of the page.

Trading occurs immediately, as we have performed spot market trading, a method where we buy or sell crypto at its current market price.

When you sell or buy an asset in spot market trading, the funds will reach your account immediately. This allows you to withdraw or use the funds for further trading processes.

And that’s how you perform spot trading on Binance Exchange. Hope you have understood the basic steps in spot market trading.

Other Types of Spot Trading In Binance

Some of the other spot trading types are listed below. It can be carried out to gain profit more safely.

Spot Limit Trading

Also called a limit order, is a process of placing an order within a specific limit price. It executes only if the market price reaches the limit price set on your Binance limit order segment. It helps traders by buying at a lower price and selling at a higher price than the current market price.

Stop Limit Trading

Stop Limit trading is a type of spot trading where the order is triggered by a stop price. When the stop price is reached, the limit order gets placed automatically at the set price.

Stop Market Trading

Stop Market trading is a type of spot trading where the order is triggered by a stop price. When the stop price is reached, the market order gets placed automatically at the best price.

OCO Trading

One Cancel the Other Order is a type of spot trading that combines the limit and stop-limit orders. Two orders are placed simultaneously, but when one order is triggered, the other one gets cancelled. Hence, only one of the orders is executed.

Trailing Stop Order

Trailing Stop Order is a method that lets you place a pre-set order at a specific percentage away from the market price. It is often used when the market is highly volatile. Trailing stop order does not move back in the other direction. When the price moves in the opposite direction by a specific percentage, it will close or exit the trade

Final Thoughts

As a beginner-friendly trading approach in the Binance exchange, spot trading is one of the commonly used trading methods opted by many traders. Continuous trading practice helps to gain more experience in spot trading, which in turn helps in obtaining more profit. Think wisely before selecting your trading method and the trading pair that you are going to use in crypto trading.

Learn, practice, and experience spot trading to transform yourself from a beginner trader to a professional trader.

10 Steps to Start Spot Trading on Binance was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.