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I decided to make this article to show to @bmjc98@Ruffa@Laurenceuuu the Spot Trading on Binance, especially to @Ruffa because she is hesitating to spot trade maybe because she thought she will gonna lose her money.
Spot trading is simply buying and selling crypto. It is NOT THE SAME as Future trading where you can earn a commission, but too risky, and might gonna lose your money once the market goes against your prediction.
In spot trading, you will simply buy when the price is low, and sell when the price is high. The reason why I advised @Ruffa to do spot trading on Binance rather than swapping on Bitcoin.com wallet, is because we don't know when the price will go up and when it will go down. On Binance you can set the desired amount you want to buy or sell certain crypto and just WAIT until it reaches your target price (I will gonna explain it later). However, if you just swap on Bitcoin.com wallet, you need to monitor the market price from time to time and you also need to be fast to do the swapping because the price will change in just a matter of seconds.
You might ask why I trade on Binance, not on Bityard where I did my demo trading? That is because Binance is the most trusted crypto exchange platform. It has the highest volume among all the crypto exchanges and with 9.8 Exchange Score on coinmarketcap.
And on Bityard, you can't do Spot Trading because they only have Margin Trading. And their chart is so simple as their system, so you won't be able to learn more about the indicators and more technicalities of the market.
Why choose an exchange with the highest volume?
The higher the trading volume of a crypto exchange, the more users it has and those users think that the platform is trustworthy to send their money and safe to trade. Most traders are checking the volume of a certain platform before they trade in there. But be careful, volume can be manipulated, so do not just rely on the data provided by the exchange. You can check the volume of a certain exchange on Coin Market Cap. https://coinmarketcap.com/rankings/exchanges/. Those who placed large orders are choosing an exchange with the highest volume.
The Binance trading system is quite complicated at first, but once you have tried it, it is just so easy to operate. But take note, to gain a good amount of profit in Spot Trading, you also need to learn the basic indicators and chart reading. Most traders in Spot are basing on the Support and Resistance, RSI, and EMA. (In case I am wrong, you can correct it in the comment section). You can visit @Eybyoung article about the Trading Indicators to know more about RSI, EMA, and other indicators.
But I will show here why Support and Resistance are important in Spot Trading.
Support means the area where the asset's falling price will find, and Resistance is where the asset's rising price will run into.
And to use Support and Resistance effectively in Spot Trading, you need to understand how the asset's price move.
For example, you want to buy and sell BCH (Refer to the picture below). As you can see, the lowest price ($300.90) is the support and the highest price ($380.47) is the resistance.
That means you can buy BCH at $300.90 and sell it at $380.47 which gives you a $79.57 profit, once the BCH price reaches those support and resistance level.
The reason why you need to base it on Support and Resistance is that there is a possibility that those prices will be reached again. By the way, you can cancel your order anytime as long as it didn't reached the order price yet. If you want to buy and you think the price will still go lower than the Support level, then you can cancel your order and set a lower price. The same thing if you want to sell and you think the price will still go higher than the Resistance level.
You will not lose your money in Spot trading, in fact, it is the safest type of trading. Not unless you buy at a low price but the market drastically drops lower than the Support level. BUT in that case, you just need to WAIT until the price goes up again, you can then sell your asset. Just always remember, BUY WHEN IT'S DOWNTREND, AND SELL WHEN IT'S UPTREND.
That is just a simple explanation of Spot trading based on Support and Resistance. If you think it is complicated, you can write your questions in the comment section.
Now that you know when to buy and when to sell based on the Support and Resistance, let's go to the steps on how to do Spot Trading on Binance. (Open your Binance app and follow these steps)
Open your Binance app and click 'Trades'.
Choose the name of the crypto you want to buy or sell.
On the section below the 'limit' order, it is where you will enter your target price or order price. For example, you want to buy BCH at $300, then simply enter $300 there, or you want to sell BCH at $380, then simply enter $380.
Below the order price is the amount of BCH you want to buy or sell. For example, you wish to buy 1 BCH or simply adjust the percentage you can see just below it.
And just below it is the total amount you will receive. The available balance of your BCH or USDT is also shown just below the total receiving amount.
Lastly, click the buy or sell button.
Once you have placed your order, it will appear in the 'Open Orders' section below. If you want to cancel, simply click the 'Cancel' button and click 'Confirm'. You can also check your order history by just clicking the button shown in the photo.
And once the market reaches your target price, your placed order will then be executed. As simple as that, it is not as complicated as you guys think it is.
Spot trading is just so easy to execute, what you need to learn more is Technical Analysis of the market. I advise you to watch the tutorial videos on youtube and read articles about trading.
Choose FIAT in Spot trading. That means when you buy crypto you need USDT, and when you sell crypto you will receive USDT.
The default order is 'LIMIT ORDER'. But if you want to place an order as soon as possible, you can choose 'MARKET ORDER'. By choosing the Market Order, you can instantly make a transaction at the current market price.
Don't hesitate to ask questions below in case you didn't understand it. The market is going down, I guess it's a good time to buy crypto. 😉