What is Trade Coin on Binance? Learn about trading orders on Binance
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Trade coin on Binance is a keyword that many people mention and suggest when learning about cryptocurrencies and trading cryptocurrencies. However, on Binance, there are many different types of trading orders; which one to choose? This article is definitely for you if you are finding trading on Binance 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.
What is a Trade coin?
Unlike standard coin buying/selling, you need to use cash, place an order to buy that coin, and own that coin in a crypto wallet. When required, you execute the order to sell that coin, and the money is transferred directly to the bank account. This is like buying and owning physical gold.
Unlike you trade forex or trade gold, where you change the exchange rate of pairs or gold in the market, what you change is just the exchange rate; you do not own any assets.
Meanwhile, trade one coin pair on Binance (assuming you have coin pair AB), which means you use your existing coin B to buy coin A or sell your current coin A to receive coin B. And when you have purchased 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 high and possibly about to correct down, you would Sell A.
Learn trading features on Binance: Trading P2P, Spot, Futures, Margin
How to choose coin pairs to trade on Binance?
* See more: The complete guide Binance from a to z
When accessing the Binance exchange, there are many different coin pairs. So what do coin pairs mean? Which coin pair do you want to trade?
One coin pair consists of 2 parts:
The first coin is the base coin you can buy or sell.
The back part can be one coin, one stablecoin, or 1 unit of fiat currency is the unit of valuation.
Binance exchange has three coin pairs: coin/coin or coin/stablecoin or coin/fiat.
1. Coin/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 one base coin from 1 quote coin, you must place a BUY order with that coin pair.
If you want to sell one base coin to get the quote coin, you must place a SELL order with that coin pair.
E.g.:
You have BTC and want to buy BNB. You must choose to trade the BNB/BTC pair and place an order to BUY BNB.
2. Coin/stablecoin
Examples of coin/stablecoin pairs: BTC/USDT, ADA/BUSD, BCH/BUSD…
If you want to buy one base coin from 1 quote coin, you must place a BUY order with that coin pair.
If you want to sell one base coin to get the quote coin, you must place a SELL order with that coin pair.
E.g.:
You have BTC and want to buy BNB. You must choose to trade the BNB/BTC pair and place an order to BUY BNB.
2. Coin/stablecoin
Examples of coin/stablecoin pairs: BTC/USDT, ADA/BUSD, BCH/BUSD…
If you have one stablecoin B and want to buy one coin A, you will have to choose the pair A-B and place a Buy A order.
If you have one coin A and want to sell coin A to get stablecoin B, you must place a SELL order for coin A.
E.g.:
You bought BTC at a low price, now BTC has risen, you want to collect USDT to take profits, you have to choose the BTC/USDT pair and place an order to sell BTC.
3. Coin/Fiat money
Fiat money is a form of currency issued by the government and considered legal.”
Coin/Fiat pairs are XRP/AUD, TRX/EUR, ADA/AUD…
If you have GBP in your Binance account and want to buy BNB coins, you must select the BNB/GBP pair and place a Buy BNB order.
Types of trading orders on 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 an order type used to buy a coin at the current price instantly. This type of order is used when you are not too concerned about coin price movements. Or, when the coin price fluctuates too much, you do not 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 to the price you set or sell coins when the price drops to the price you set.
- OCO orders can be understood as Limit and Stop-Limit orders combined. If you want to simultaneously buy coins at a low price and buy coins when the price rises to a specific price, you can use an OCO order. Or conversely, you want to sell when the currency is at a high price and at the same time cut your loss when the coin drops to a specific low price. You can also use OCO orders.
So you have a good understanding of trade coins and trading orders on Binance. At this point, you have also distinguished the difference between buying/ordinary selling coins and trading coins. In the following article, Investiki.com Will guide you to trade coins on Binance to understand better the terms mentioned above.
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