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Your Guide to Binance Spot Trading

2024 Mar 08
7min

Key Takeaways

  • Spot trading is among the simplest and most traditional ways of buying and selling financial assets.

  • Binance Spot trading platform offers a user-friendly interface with low fees and high liquidity. It’s suitable for all kinds of traders.

  • The guide covers the basics of spot trading and shows you how to use Binance Spot so you can easily buy or sell cryptocurrencies anytime.

Introduction

When people first begin their journey into cryptocurrency trading and investing, they often start with spot trading, which is among the simplest ways of buying and selling financial assets. 

Binance Spot is a spot trading platform that offers a user-friendly interface, allowing users to easily buy and sell assets with low fees and high liquidity, making it ideal for both beginners and experienced traders.

In this article, we will cover the basics of spot trading, how it differs from other forms of trading, and some of its advantages. After that, we will learn how to do spot trading on Binance.

What Is Spot Trading?

Spot trading is a direct and immediate form of trading, with transactions settling instantly and without any kind of leverage. It’s one of the most basic forms of trading and can be done with a variety of asset classes, such as cryptocurrencies, stocks, commodities, forex, bonds, and more.

Although spot trading may occur directly between traders, transactions are usually facilitated by an exchange like Binance.

What’s the Difference Between Spot Markets and Futures Markets?

Spot markets execute instant or short-term trades with immediate delivery, while futures markets involve contracts that set delivery for a future date. Spot trading relies on the current market price based on supply and demand. Futures contracts, on the other hand, are based on agreements between buyers and sellers.

What’s the Difference Between Spot Trading and Margin Trading?

Spot trading requires full asset purchase and immediate delivery, while margin trading allows borrowing funds to enter larger positions. Margin trading amplifies both potential profits and losses, offering increased risk and reward.

Advantages of Spot Trading

  • Lower risk: Spot markets rely solely on buy and sell orders without concerns of liquidation or margin calls. It’s ideal for users who want to buy and hold.

  • Simplicity: Spot trading is straightforward, making it accessible for everyone and ideal for beginners.

  • Immediate entry and exit: Traders can enter or exit a trade at any time.

How to Spot Trade on Binance?

In this example, we will go through the Binance Spot interface. Then, we will illustrate how to buy BTC with USDT using a limit order, followed by an example of how to sell BTC for USDT using a market order.

How to access the Binance Spot interface

1. Log in to your Binance account and find [Trade] → [Spot].

2. You will be redirected to the Binance trading interface.

3. On the left side is the order book. Sell orders (asks) are in red, while buy orders (bids) are in green.

4. The trading chart at the center is an interactive chart of the selected trading pair. In this example, BTC/USDT.

5. The trading pair list is on the right side. It contains all available trading pairs on Binance. You can use the Search function to find specific pairs.

6. Below the chart is where you can create buying and selling orders. But to do so, you need to fund your Spot Wallet.

7. For example, if you are buying BTC with USDT, you need to first add USDT to your Spot Wallet. Click the [+] icon to fund your account and choose your preferred method.

How to buy BTC with USDT

1. The first step is to choose an order type. A limit order allows you to set a specific price for your order (not necessarily the current price). A market order will try to fulfill your order as soon as possible at the current available price.

2. If you are using a limit order, specify the price and amount you want to buy and click [Buy BTC] to create the order.

3. You will get a notification at the top right corner of your screen. 

Note that you can track your open orders at the bottom of your trading interface.

4. If BTC reaches your order price, your order will be filled.

How to sell BTC for USDT

The process for creating selling orders is very similar. Let’s see how you can sell your BTC for USDT. In this example, we will use a market order.

1. Choose your order type, set the amount, and click [Sell BTC].

2. Since we are using a market order, the selling order will be created and filled immediately at market price.

How to view my order details

You can view your order history, trade history, and other details at the bottom of your trading interface.

You can also edit open orders by clicking the edit button near Price and Amount.

On the right side, you can click the bin icon to cancel orders individually or the [Cancel All] button to cancel all open orders.

Closing Thoughts

Embarking on the exciting journey of cryptocurrency trading often starts with the simplicity and accessibility of spot trading. Binance Spot, with its user-friendly interface, low fees, and high liquidity, is the ideal platform for both novice and seasoned traders.

Further Reading

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

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