How do I trade cryptocurrency on Binance and make profit? I'm a beginner.
I have been trading crypto currencies on Binance for a 6+ years now.
As an experienced trader, I can tell you that trading crypto currencies on Binance has been a roller coaster of super crazy highs and lows. I have watched some crypto pairs rise 11,000%, 800%, 200%, and even 5% on some days.
At times I have managed to multiply my money 400% in a week and other times I have snagged a 5% profit in a week.
I am not a major crypto hodler.
Despite the high volatility of cryptos, I have chosen to remain a crypto trader rather than a hodler because I need my money to be circulating in and out of a venture for it to best benefit me and my situation. I simply cannot sit around as I wait months or years even for crypto to rise and for me to watch it go through these crazy highs and lows.
For these reasons, I needed a strategy that could best suit me. And after some experience, I came up with this one.
I trade my crypto on Binance. After a few months of interacting with the platform, I noticed that at least 50 different trading pairs manage a 10 - 20% rise daily. Some even go to crazy highs of 800% in one day on some occasions! Some selected few manage 100% rises while others do between 40% and 80%.
My focus at this point is usually on the ones that rise 10 -20 % daily as they are the regular occurrences and the purpose of this story. This strategy applies only to spot trading.
The strategy
Scenario 1
If you put in $1000 on Binance and track a 10% rise on one pair, you will have made $100. Repeat this every day and you will be making $100 a day, every single day. At the time of writing, Several pairs rose at least 10%. And this happens every single day! With your $1000 investment, you only need to pick one pair that pleased you and you fell comfortable with, buy it, wait for it to rise at least 10% then sell it.
You can even set a stop limit price on the platform that will automatically do this for you. You just put in the price you wish to exit at and the platform will it sell for you.
You will exit the trade with $100 profit give or take as you still have to pay trading fees.
A 10% rise in my experience can happen in about a few hours, or less than a minute even depending on the volatility of the pair you chose. On some lucky days, it happens within the first 10 minutes. You make your entry and exit, make your money, leave the platform and move on to other things until the next trading day.
Scenario 2
If you put in $2000 on Binance and track a 5% rise, you will also make $100 per day every single day.
With $2000 in, a 10% rise will guarantee you $200 daily!
Scenario 3
Put in $500 on Binance and track a 20% rise you will make $100 daily.
Remember that they are maker and taker fees that are deductible by Binance for facilitating these transactions.
Why put in more money and not less?
Imagine putting in $200. For you to make $100, you would need to trade a pair that would rise 50% which is much rarer than a pair rising 10%.
Again with $200, you would need to trade at least five different crypto pairs rising 10% a day to make your minimal $100 target. This can be exhausting as the different pairs could be rising at the same time. It could create confusion on which one to choose which could lead to mistakes that will lead to losses.
Putting in at least $1000 for this strategy is much safer and less taxing. The more money you put in, the easier it is to make a profit and the less taxing it is to find different pairs at different times to turn in $100 a day.
A $5000 investment with a 10% profit strategy could give you $500 daily! Neat, right?
Stable coins
Make sure that you are trading your crypto against a stable coin such as USDT, BUSB, BIDR, GBP, etc. That way, after exiting a trade, you store your money in a currency that won’t change in price until you decide to trade again.
You don’t want the surprise of finding that your $1000 turned into $340 overnight after storing it in dogecoin. Remember that your $1000 using this strategy is the investment that will make you $100 a day. So you must make sure it remains intact.
Of course, there is some probability that dogecoin could rise during that period which could mean more profits for you, but that is not the strategy here.
Remember to withdraw or transfer your daily gains if you do not wish to reinvest them.
After some days of using this strategy and after a thorough understanding of it, you can adjust your profit margins to 15% or higher to make more money per day.
Trading fees
You can also learn to trade past the 10% mark maybe 12 to 14% to allow some room to make the extra money needed to pay the trading fees. This will ensure that your initial $1000 investment remains intact. But this is after you have mastered the strategy.
Alternatively, you can set aside some money in BNB if you are using Binance which will not only lower your trading fees but will also ensure that your $1000 initial investment remains intact and that the trading fees are not being deducted from it.
Benefits and disadvantages of this strategy
The benefits of this strategy are one, you will not be subject to the sharp drops of cryptos which will help keep your initial investment intact. As you only buy during a rise and sell after your 10 to 20% rise. You exit immediately after you make your money and are cushioned from potential losses due to these sharp drops.
As a disadvantage, buying and quickly selling day after day will lead to you paying more fees as you are charged for every time you buy and every time you sell.
Also, after targeting only a minimal rise such as 10 or 20%, you might miss out on profits in case the crypto pair you chose rises to 30, 50, 100, or even 200%.
Storing your money in a stable coin when you are not trading will also prevent you from making potential profits had you kept it in a coin that rose in value during that time.
You also miss out on the power of compounded interest as you only buy a rise and don’t allow your money to multiply. This is assuming that even after you gain your $100 on day one, you trade $1000 on day two and not $1100.
Can the strategy work?
Yes, the strategy can work but only if you stick to it. As human emotions and your greed ratio can interfere with your trading strategy, self-discipline is super important here. But only to the extent that it makes sense. Tact is also paramount in this case.
Imagine a scenario where you set out to trade a 10% rise only. You put in your $1000. You buy and sell after a 10% rise then sit it out. But the crypto pair continues to rise up to 50%. Had you waited before selling in this case, you would have made not just the $100 you initially sought out to make, but $500 on that day.
So tact is very important. That’s why a proper understanding of technical analysis is important for a crypto trader to gain maximum returns from their venture.
In this specific scenario, for example, a skilled trader would not only make the initial $100 that they sought out to make but an extra $400 minus the trading fees of course. The point is they would still have made their daily $100.
How to do it practically
Analysis
After setting out your trading profile on Binance, study the pairs for a few days and observe their patterns. Make sure you observe the ones that rose the highest on that specific day — as in the ones with the highest green percentages in the last 24 hours. This is for beginners. Experienced traders already know this. Experienced traders will also be able to select a trading pair with enough volume to fulfil their buy and sell orders. Selecting trading pairs with low volumes will not work in a trader's favour.
In my experience, many crypto pairs will remain in the green for at least two days before they disappear off the top list. Sometimes they keep rising consequently for three days before they start falling. Please note that in between the 24 hr periods they may rise and fall but they pick up after a few hours and keep rising in value for the next three days. Sometimes a specific pair could keep rising for a whole month! Like Shiba Inu did back in 2021 for the month of October. It rose 1128% in one month on Binance!
This strategy of buying during a rise and selling after a 10% or 20% rise again will cushion you from the sharp drops during the 24 hr periods.
Wake up early/sleep later/ manage your time
Yes, even crypto trading requires you to wake up early. Binance uses the UTC. Which give and take is different from the normal periods that the majority in the world uses. For example, when a trading day starts on Binance, it’s 3 am in Nairobi, 1 am in London, 11 pm in New York, etc.
Proper time management is required here to take advantage of the daily rise that will guarantee you your daily $100.
Make sure you are awake and alert during the time that a 24hr trading period starts on Binance.
You will notice that many pairs could rise (and they do rise) 10% at any point during the trading period, but in my experience, trading at the start of a 24 hr period is less problematic using this strategy.
Why do so?
The behavior of a crypto pair for the first few minutes of a new trading day can tell you a lot about how it is going to behave during the day. Some begin to rise immediately while some begin to fall immediately.
They also rise or fall significantly during the first few hours. They might keep rising and falling during the 24 hr period, but the first few hours are the most important and the safest to trade for a person who would wish to use this strategy to make $100 a day trading crypto. So time management is super important.
Of course, nothing is guaranteed in crypto trading due to the high volatility of these assets, but catching the pairs on a fresh 24hr trading period is a neat and safe start.
How to do so successfully
Check your greed
Of course, making money and the promise of quick returns after some little effort can make us super greedy. Check your greed. If you intend to only make $100 or $200, stick to that. Keeping your money in after you have made your desired target could lead to you witnessing a sharp drop that can make you lose not just your daily gains but even your initial investment.
Stick to your strategy
Again together with checking your greed, stick to your trading strategy. Of course, you would wish to make more, but after you have made your targeted money, have the courage and personal discipline to safely get out of the trade.
A sharp drop could make you lose all your gains which is super frustrating from personal experience. Better to walk out with 10% gains than to watch all you have made including your initial investment disappear into thin air. Tomorrow is after all another day to make another $100.
