Binance Coin (BNB) is a digital currency supported by an exchange of the same name. Despite its limited functionality, it is still among the top 10 cryptocurrencies in terms of market valuation and trading volume.
This makes sense when you consider the billions of dollars traded on the Binance exchange every day.
To trade BNB, the first step is to open an account on a regulated exchange, deposit funds, select Binance Coin from the list of platforms, and finally buy BNB (open a long position) or sell BNB (open a short position).
This guide on how to trade Binance Coin will break it down in layman terms so you don’t trade blindly. But, if you don’t have time to read all of this to the end, this is what you need to do to trade Binance Coin right now ..
Step 1: Open a trading account
Step 2: Fund your account
Step 3: Choose how much Binance Coin you want to exchange
Step 4: Buy BNB (go long) or sell BNB (go short)
Step 5: Confirm the trade
With that said, you will be trading it in fiat currencies such as the US dollar or Japanese yen. Or, you can trade Binance Coin with another digital currency like Bitcoin, EOS, or Ripple ..
In any case, each Binance Coin pair will have a different exchange rate. For example, if you are trading Binance Coin with USD, the pair could be valued at USD 27.50. Your task is to determine whether the price will rise or fall.
When you learn how to trade Binance Coin, you will quickly realize that the fundamentals are no different from stocks, forex, commodities, or any other asset class for that matter.
Ultimately, the overall goal is to correctly predict whether Binance Coin will rise or fall in value relative to another fiat or digital currency.
To make sure you clearly understand the concept before moving on, let’s take a look at a real basic example of how to trade Binance Coin.
You have decided to exchange Binance Coin for USD.
The pair is presented as BNB / USD and is currently worth $ 190.50.
You think Binance Coin is undervalued against the US dollar, so you place a buy order.
You bet $ 500
In a couple of days, the BNB / USD rate will cost $ 220.40.
This gives a 15.7% profit, so you get paid with a sell order.
With your $ 500 bet, you made a total profit of $ 79.50.
Once again, the above example shows that trading Binance Coin is no different from trading any other financial market. The main idea is to predict in which direction the price of the cryptocurrency will move. Predict correctly and you make money.
As you learn how to trade Binance Coin, you need to think about which strategy is right for you. For example, if you are a complete beginner, you might want to consider a long term buy and hold strategy.
The easiest way to trade Binance Coin is to use an online broker and hold your investment for months or years. This is, of course, provided that you believe that Binance Coin will be worth a lot more in the future.
The reason to consider this traditional investment strategy is because you don’t need to know anything about chart analysis or technical indicators. In turn, you shouldn’t be interested in short-term price fluctuations.
As an extra tip, if you want to use a long-term Binance Coin strategy, your best bet is to use a commission-free platform like eToro. At the same time, you can keep your trade open for as long as you want without falling under constant commissions.
If you are an avid trader looking to profit from ever-changing price fluctuations, then you probably won’t be interested in a long-term buy and hold strategy.