Above you will find the image of the spot market on the platform and at first glance this page may seem complicated to some but in reality it is easy. On the left you will see the different buy and sell orders from current traders. On the left you will find a box to quickly search for different cryptocurrencies. In the middle you will be able to place your buy orders for execution and also you will see the chart of course and the Japanese candlesticks. You can visit our technical analysis articles to learn more about how to read Japanese candlesticks.
You just need to know about the different buy orders on the platform which vary from spot to futures. On the spot market you will be able to buy immediately at the market price in an instant. This method is great when the trend is up and you want to buy before the uptrend accelerates. The other method is via limit which is simply by placing buy orders that are executed only when the price drops to a certain limit. For example if Bitcoin drops to $90k the buy order will be executed but if it doesn’t drop to that limit the order will not be executed. In selling too the order is exactly the same and does not differ.
We always recommend trading in the spot market initially as it is easier to manage risks in this market.
Margin trading
Margin trading is an advanced strategy on Binance that allows you to borrow against your assets on the platform in order to trade on the spot market. However, this method is only recommended for professionals who have many years of experience in trading. Therefore, please stay away from this method and do not use it if you are a beginner. The main purpose of explaining it in this article is to clarify its risks.
This method increases and maximizes your purchasing power, which also means maximizing losses. Losses always stop at the size of your capital, i.e. if your capital is $100 and the loan is $50, once you suffer a loss equal to $100 of the deal value, it will be liquidated and you may lose your currencies pledged against this loan. The platform withdraws these currencies from you in order to settle the loan, and this is the main reason for the risks. This method of trading is similar to leverage in the principle of maximizing the purchasing power of the deal and also increasing the risks. But it differs from it in that margin trading is always on the spot market, while leverage is on futures contracts.
