How to start trading cryptocurrency and altcoins on Binance
🚀 Update 2020-01-01: I have started trading using Gunbot (a crypto bot) – you will find more information here: https://github.com/magicdude4eva/docker-gunbot
Coinbase is not available to South Africans and Germans (and is only supported for these countries): Coinbase changed their TOS in 2017 and has started revoking access for users from non-supporting countries. You can then only buy buy ETH via Changelly or Luno (South African exchange). If you are based in a SEPA country, I suggest you use Litebit.eu.
After you have dabbled in in crypto-currency on Luno, you are now ready to really go “underground” and have major #FOMO since your friends are investors in XVG, NEO, OMG, ENG, XRP – coins which are referred to as altcoins as they typically do not trade on consumer exchanges such as Coinbase, Luno and others.
My personal favourite exchange is Binance. Binance is a secure exchange that many people use, I like that Binance fees are halved because they have their own currency Binance coin(BNB) which will when used to pay your transaction fee will cut your fee in half!
Binance is a popular Chinese cryptocurrency exchange, which is popular for its crypto to crypto exchange services. While the company is still fairly new on the market, it has managed to gain a lot of popularity thanks to its impressive number of Initial Coin Offering listings, but also due to its low trading fees (0.1% or a 50% discount if you use their own BNB currency).
Binance is headed by Changpeng Zhao and a team distributed around the world. It has all of the main features you want to see in an exchange like support for trading pairs with all of the major coins (BTC, ETH, LTC, NEO), multiple languages, multiple device platforms, clean user interface, and importantly, extremely high throughput from its order matching engine of up to 1,400,000 orders per second.
Binance does not provide fiat (eg. Euro, USD, ZAR) to cryptocurrency exchange, rather focuses purely on crypto-to-crypto and in order to trade, you will need to move Ethereum (ETH) or Bitcoin (BTC) into Binance. To do this, we will use Coinbase as explained in this guide.
For the impatient – skip the guide and be done in 7 steps
In case you are like me and you only need the manual afterwards, here are the quick steps:
- Register an account on Coinbase
- Register an account on Binance, enable 2FA and enable BNB for fees
- Get your Binance ETH wallet address
- Send ETH from Coinbase to Binance
Pro tip: Transfer your ETH/BTC from Coinbase to GDAX (your Coinbase account is automatically linked) and then to Binance and you will save yourself the fees
- Check your Binance transaction history to see that the ETH arrives
- Buy BNB on Binance to avoid “dust coins”
- Scroll to the bottom of the blog post and tip me pls…
Note: If Coinbase does not allow you to pay via Credit Card, you might need to do a full verification. Alternatively use Changelly for credit card payments (clicking on the image below will open a Changelly window where you can instantly buy):
Important security advice
I strongly encourage you to enable 2FA (two-factor authentication) and use the free app Authy to manage your codes. 2FA adds another level of security in addition to your password as it generates a unique code every 30 seconds which is required for login or withdrawals. Should your email/password be compromised (I hope you use unique passwords per website and a password manager such as 1Password), the perpetrator will not be able to log into your account without your 2FA code.
When you enable 2FA, make sure that you also store any recovery key you receive – I use 1Password for Families to manage all my logins and secure data. The great thing about 1Password is that it synchronises via Cloud to all your other devices and you will never need to remember a password:
Get Bitcoin or Ether on Coinbase
I personally prefer Ether as it has lower transfer costs and is generally not as volatile as Bitcoin. When purchasing Ether, ensure what the withdrawal limits are (some exchanges do not allow to transfer less than ETH 0.1 – approx $60) and you are then stuck with something you can not fully use.
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On Coinbase, you’ll be able to purchase BTC or ETH using conventional fiat methods including PayPal and Credit/Debit Card; each has different buying times and limits, generally the longer the buying time the higher the limit. When I started off, I purchased 0.5ETH with my credit card as it was the quickest way:
Once you have received your Ethereum, head over to Binance to get your wallet address, search for ETH and then click on the “Deposit” button next to “Ethereum” (do not make the mistake and pick “ETC”):
The generated “ETH Deposit Address” is your permanent Binance ETH-address via which you can send and receive Ethereum from anywhere.
Pro tip: Instead of transferring straight from Coinbase to Binance, you can save transfer fees by transferring your ETH/BTC from Coinbase to GDAX (your Coinbase account is automatically linked as GDAX is Coinbase’s exchange) and then to Binance. Just click on the relevant currency pair, then deposit and then select the Coinbase account. Once done, you can then withdraw from the same screen into your Binance account.
If you feel uncomfortable using GDAX (no idea, why you should as you will have access to it anyway and can save yourself the fees), you can also just transfer straight from Coinbase:
Once you have sent your ETH, head over to Binance’s deposit history where you will eventually see your ETH arrive (this typically take several minutes but can sometimes take between 1-2 hours if the network is congested):
A word about Binance Coin (BNB)
Once you have signed up to Binance, the first thing you should do is to enable “Using BNB to pay for fees” to get a 50% discount on all fees:
In addition, all ICOs offered on Binance will have a discount for using BNB to invest, and the long term promise is owning a stake of a future fully decentralised exchange that rumours have is already in the works. There will be natural deflation as every quarter, Binance will use 20% of profits to buy back BNB and destroy them, thereby steadily driving up the price (up to 50% of all BNB in circulation).
Let’s trade and buy some BNB
You are now ready to buy some Binance coins (BNB) – head over to the basic trading view – this screen is initially confusing, but you will find your way quite quickly:
1 Sell Wall: This section shows the current offers for BNB. Sales are always marked in the RED. In trading, we also call a sale a “short” (i.e. shortening your position). You can click on any price in the “Sell Wall” to populate the Selling price in “6 Buy/Sell”
2 Buy Wall: Similar to the “1 Sell Wall“, it shows the current requests for BNB. Buys are marked in GREEN. In trading, we also call a buy, a “long”.
3 Coins: I favourite the coins I am interested in. Since I only trade in ETH pairs, I ignore BTC.
4 Trading History: This shows you the recently executed orders
5 Open Orders: Your open orders
6 Buy / Sell: The forms to trade your coins. A market-trade will buy/sell at the current market price. A limit-trade will only fill your order if the price is met.
If you want to instantly buy 5 BNB, click on the “Market”-tab, enter “5” and click “Buy BNB” – this will instantly purchase 5 Binance coins at the current market-price:
I would however stick with the “Limit”-trades as this is how you will generally trade going forward. Enter the “5” as the quantity and then pick a price you are willing to buy. For this follow the buy/sell wall to the left and look at the charts and determine where the price will land up with.
Automated Trading via Gunbot Cryptobot in Docker
I am an official Gunbot Reseller and provide a Docker Image which has the setup to auto-trade ALT-coins:
Congratulations – you have just purchased your first #altcoin. Just remember to trade responsibly going forward!
DISCLAIMER: This is not investment advise. Do your own research and draw your own conclusions.
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