In the cryptocurrency market, exchanges are financial institutions that deal exclusively with cryptocurrencies. Even though the presence and overall influence of crypto exchanges today is still falling under the radar, analysts and experienced investors are confident that their presence will only grow soon. As a result, cryptocurrency exchanges have become a talked about affair in investor circles everywhere, although not everybody can grasp the nuances of daily trading through an exchange.
This article aims to provide a step-by-step guide for initiating trading on a cryptocurrency exchange. We will take Binance as an example. It is a Chinese-based cryptocurrency exchange that has recently become quite popular. It has over 103 BTC pairs, 100 ETH pairs, 35 BNB pairs and 6 USDT pairs at the time of writing.
Step 1: Getting Started (Security Protocols)
After clicking the Register button, you will be redirected to the CAPTCHA page. Verification and Authentication is required to eliminate the possibility of giving robots the access. CAPTCHA involves solving a simple puzzle to prove that the user is indeed, “human”.
Binance prefers their members to use 2FA Google authentication instead of a more traditional SMS-based verification. It is indeed true that 2FA Google Authentication adds an extra layer of security to protect the account against worst-case scenarios.
Using the 2FA Google Authentication
After enabling the two-factor authentication, it is recommended to use the SAASPASS Mobile app and pair it with your Binance Account. After opening the SAASPASS mobile app on your device, click on the Authenticator tab in the main menu followed by the “Scan Barcode” button. After the dynamic code is generated, enter the code into the Authenticator tab which appears next to the Binance Logo in the following Screen. After entering your credentials, click on the Enable 2FA button and you’re done.
Note: Binance and various other exchanges recommend that all their members go through a two-factor authentication. This is mandatory to protect your account and you funds.
Step 3: Starting From the Homepage
The Homepage is filled with different links and functions for a crypto trader to use. On the top of the screen there is a space which displays any upcoming events or offers, or any ongoing bonus programs, as seen below.
One Standout feature is the presence of the Binance Token or BNB to pay for fees. It can be considered as the exchange’s own cryptocurrency. Users can use this token when trading to get a 50% off the trading fee. The value of the Binance token is expected to grow over time with the addition of more members and traders.
Below is the main listing of several crypto currencies including major ones like Bitcoin, Ethereum, and Ripple etc. Another standout feature of Binance is the presence of multiple markets such as the Binance Token Market, the Bitcoin Market, the Ethereum Market and the USDT Market. A person will need some cryptocurrency in their account like Bitcoin or Ethereum to begin exchanging coins.
The Exchanges Tab
After coins have been successfully added to your account, click on the Exchanges Button in the top left corner of the screen. You should then see the two options: Basic and Advanced.
The only difference between the Basic and Advanced modes is the presence of extra tools and graphs in the advanced version, which are mainly aimed at assisting experienced traders and investors to trade efficiently. The basic version is favourable for novice traders with its simplistic interface and tools.
Step 4: Depositing Funds
After you have your Binance account up and working, you need to transfer some funds from another exchange or platform. In this example, we will take IQ Option. After you’ve transferred funds from IQ Option, go to the “Funds” tab on the Binance Page. After that, click the Deposits and Withdrawals Tab, where you can also check your coin balance every time you log in.
Step 5: Transferring Funds from other Exchanges
For depositing, first search the coin you want to deposit in. In this example, we will use Ethereum (ETH). You have to note the Deposit address before depositing. You then have to copy and paste the ETH deposit address in the recipient box on the IQ Option platform. Enter the amount of ETH/USD you want to send and continue.
Congratulations, your funds are now sent to your Binance account from where you can start trading.
Step 6: Beginning to Trade
Once you have received your ETH balance, trading can finally commence. Go to the Exchange tab and сlick on the “basic” tab. This is advised for any beginner or novice trader as the Advanced tab can get a bit overwhelming.
You will notice that like FOREX, cryptocurrencies are also traded in pairs. The most popular pairs include Bitcoin, Litecoin, XVG etc. In general, most coins can be traded with Bitcoin. In this example, we will pair our ETH with XVG, hence, the XVG/ETH pair.
On the far-right hand side, you will find the ETH tab and then search for XVG. Click on the appropriate trading pair which will redirect you to a page as shown below. Click the star icon next to XVG/ETH pair to add it to your favourites.
Step 7: Buying a Coin
If you want to buy a particular coin (in this case XVG) set the desired amount on the Buy tab as shown below.
Exchanging Altcoins with Bitcoin
In case an altcoin does not have an ETH pair, we then have to exchange our Ethereum tokens with Bitcoin to trade as usual. There is a BTC tab right next to the abovementioned ETH tab. Click on the BTC tab and search for the currency you want to exchange it with, in this case ETH. Click on the ETH/BTC pairing and you’re done.
Step 8: Selling a Coin
When selling a coin, the steps are more or less similar to Buying. Click on the market tab and enter the amount of ETH you want to sell. There is a slider where you can select a percentage of your total ETH balance that you wish to sell. After finalising, click the Sell ETH button and you’re done.
Step 9: For Depositing
After selecting a particular coin you want to deposit, click on the deposit button after double checking the currency and the amount selected. For instance, when depositing Bitcoin, make sure you click the deposit button next to the BTC symbol. This is essential as the address for each coin is different, and mixing them up can be a costly mistake.
Step 10: For Transferring
It may so happen that you want to transfer tokens from a wallet or any other exchange for maximum profitability. In this case, the address you’ll be sending to will be automatically generated under the tab “BTC Deposit” in case of Bitcoin. When transferring Bitcoin tokens from a wallet or an exchange to Binance, the address will be shown below.
Binance is a top-notch exchange in the Asian cryptocurrency community, and many traders from around the world are attracted to it. As the world of cryptocurrency adoption grows and investors flock in, crypto-exchanges like Binance will only grow in popularity, giving traders the opportunity to amass fortunes through crypto trading.