When listing a new coin on Binance, you may see amazing numbers like a 2400% increase, but the reality is not as it seems! Let's explain the details with an example so you don't fall into the trap. 🔍

How are the prices of the new currency determined at launch? 📊

When listing a new coin, Binance sets 3 main prices before trading starts:

1. Opening price 💰:

• It is the actual price at which trading begins based on supply and demand.

2. Lowest price 📉:

• Often derived from the ICO/IEO price.

• It does not mean that anyone was able to buy at this price after listing.

3. Highest price 📈:

• Shows the highest value reached by the price during the first moments of trading.

Common Misconception 🛑

❌ “I can buy the currency at the lowest price and sell it at the highest price immediately!”

✅ Fact: Everyone enters the trade at the opening price, which is the price set by the market with the first buy and sell order.

Illustrative example

Imagine a new coin like $VANA is listed:

• Lowest price: $1 (IPO or reference price).

• Highest price: $25.70 (at the moment of buying peak).

• Opening price: $21.79 (the price at which trading actually began).

The mistake people make:

Some people think that someone bought the coin for $1 and immediately sold it for $25.70 to make a huge profit of 2400%, but the truth is completely different!

Example scenario:

1. Before listing:

• The initial coin offering (ICO/IEO) price is set at $1 only.

2. Moment of opening the trade:

• Due to the high demand for the currency and the high demand compared to the limited supply, trading starts at $21.79 (opening price).

• Anyone trying to buy the currency will buy at this price and not at $1.

3. Climax moment:

• The price quickly rises to $25.70 due to high demand in the first minutes.

• However, most traders who bought at $21.79 cannot sell all of their positions at $25.70 because the market moves so quickly.

4. Price correction:

• After the buying peak, some traders start taking profits and selling the currency, so the price gradually decreases.

• Eventually, the price returns to levels well below the peak, surprising new traders who thought they were going to make huge gains.

Result:

• Almost no one buys at $1 and sells at $25.70 as some imagine.

• Most traders enter at the opening price and have difficulty making quick profits due to market volatility and rapid price corrections.

Conclusion 📝:

Don't be fooled by big numbers like 2400%!

• Understanding how the market works when new currencies are launched will help you avoid emotional decisions.

• Always focus on the opening price and be aware of the fact that volatility occurs in the first moments of listing.

#Trading#Cryptocurrencies#Binance 🚀