Binance Margin Trading 2020: Guide, Instruction

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Two years ago, it was impossible to find a crypto exchange to trade on margin. Although in the stock and commodity markets, the provision of credit funds has long been a common practice. Margin trading increases the liquidity and trading volume of an asset, using leverage, a trader can increase his capital faster.

True, losses in case of failure increase significantly. On traditional exchanges, investment brokers provide borrowed funds, and on platforms that trade digital assets, margin funds are formed by traders and the site’s management. In this review, we are going to tell you how Binance Margin Trading works. This platform is constantly growing and increasing the set of trading instruments. At the beginning of summer 2020, traders were able to work with leverage on the updated version of the service.

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How to open an account for margin trading on Binance

Binance margin trading, like on any other exchange, begins with the registration of an account. It is possible to log into the service through a web browser, but we recommend that you pay attention to the PC application. The desktop client for trading on the Binance platform not only provides an increased level of crypto trading security, but also allows you to make transactions on the go using your laptop. The program is installed on Windows, macOS, Linux deb and Linux rpm. The release for windows is presented in two versions:

  1. For Windows 10 platform.
  2. For earlier versions of Windows.

The second option is suitable for those who, for some reason, are still using the seven or some other version of Windows. For example, if a dozen is not installed on the old hardware. But, trading on the stock exchange through an antediluvian laptop or computer is extremely risky. Equipment can fail at the most inopportune moment and fail a good deal and miss out on potential gains.

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Let’s list the main advantages:

  1. A wide selection of exchange pairs and prompt informing users about changes in quotes.
  2. Reliability and safety of asset storage. Customers’ deposits are insured with a special Security Fund (SAFU).
  3. Availability of all active exchange services. You can use leverage, trade futures and options, enter a P2P platform.
  4. Convenience of work. One click to switch between Pro and Lite modes.
  5. The ability to automatically repeat operations. Specify the amount of the transaction and the time interval to buy a particular cryptocurrency on the exchange without a personal visit. The Binance desktop client will do it all.
  6. Professional and responsive support service available 24/7.

Unlike a mobile application, the desktop client interface is almost identical to what you are used to seeing in a browser. The updated release of the trading application for PC has increased performance and speed of operations. The program is suitable for both experienced traders and beginners. The client gains access to any section of the Binance platform and can no longer worry about getting to a phishing site or not having time to buy or sell their digital coins in time. To avoid problems, never download software from questionable sources. Download link: https://www.binance.com/ru/download

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Detailed instructions on how to create a binance account can be found in another review on our website, so let’s not repeat ourselves, let’s go straight to margin trading. To receive borrowed funds, you must complete full identity verification and replenish your deposit. Based on the amount on your balance, a margin account will be formed.

What you need to open it:

  1. Register and go through KYC.
  2. Turn on two-factor authentication.
  3. Transfer money to your balance.
  4. Point the mouse cursor to your account icon in the upper left corner to open the control panel menu.
  5. Open the section “Balance information“By clicking on the arrow next to your email.
  6. Click the pod «Margin“And select”Open a margin account»In the menu that opens.
  7. Read the terms of the agreement and check the box next to: “By clicking the button, I confirm that I have read, understood and agree to the terms of this agreement».
  8. Click the “I understand».
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Done, margin account is activated. You can start trading using borrowed assets.

How to borrow funds on Binance

You must first secure your margin position by transferring money from your main account to your margin account balance. To do this, you need to go to the appropriate section and perform an intra-exchange transaction. You can transfer all coins or a certain part.

After the translation has been completed:

  • Go to your margin wallet.
  • Enter the cryptocurrency.
  • Click on the button “Borrow / Redeem».
  • Choose to borrow.
  • Determine the amount of leverage and confirm the loan.

The loan amount directly depends on the state of the margin account. If you have 0.5 BTC, you can borrow another one, the interest rate is calculated hourly. Its size depends on the chosen cryptocurrency, you can preview the interest on loans and limits in the section “Margin data».

If you have a margin account, you can get a loan automatically.

  • Go to the trading section.
  • Specify the type of order (limit, market, stop limit).
  • Select the mode “Cross 3x“Or”Isolated margin“(Available only upon purchase).
  • Submit your application by clicking “Margin buy / sell».
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This option allows you to quickly borrow funds when you open new positions. However, you will later have to manually repay the borrowed funds.

Difference between cross and isolated margin

When using cross-margin, it is possible to add assets to a losing position, which significantly reduces the risk of liquidation.

Isolated margin implies a fixed amount of collateral, which means the automatic liquidation of a losing position. But at the same time, you only lose the amount that you put, and not the entire balance.

Pay off Binance Borrowed Funds

In the margin wallet, the margin level is displayed with a color indicator that clearly warns how much you are at risk. The danger increases in direct proportion to a decrease in the number of personal assets and an increase in the amplitude of fluctuations in the value of a coin in the market.

If you bet on growth, but the real price does not match your forecast, your balance will be liquidated, that is, used to pay off debt. But first, you will be sent a margin call, that is, a reminder that the amount of collateral is insufficient and you need to replenish the deposit. This usually happens at a markup of 1.3, and if it falls to 1.1, the funds may be frozen.

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To get your money back:

  • Go to your margin account.
  • Please enter your currency.
  • Click «Borrow / Repay»And indicate what you want to do.

It is necessary to return everything, including interest, and be sure to use the same cryptocurrency. Check if you have enough money in your account and confirm the operation by clicking the appropriate button.

Withdrawing funds from a margin account

To fix profit and withdraw money from the exchange, you must first redirect it to the main balance:

Open a margin wallet.

  • Specify the cryptocurrency that you will withdraw.
  • Click on the button to transfer funds.
  • Write the amount of money and the direction of movement of funds between wallets.
  • Confirm the operation.

Transactions within the platform are free of duty. Keep in mind that withdrawing money from a margin account with outstanding debt increases the risk of liquidating an open position.

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In a critical situation, the exchange has the right to confiscate all the money on your deposit. Please carefully study the leveraged trading rules at binance before starting any financial transactions.

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Comparison of trading conditions with other exchanges

In the current period, margin trading is supported by a lot of cryptocurrency exchanges, and each of them has its own target audience. Futures trading platforms (by the way, this is also possible for binance) provide a higher leverage, but it is not entirely correct to compare them with conventional exchanges.

If we take direct competitors, for example, Poloniex or Bitfinex, then the conditions are very similar, but there is no support for isolated margin with a leverage of 10x.

Conclusion

If you are a novice trader, do not rush to take the maximum available loan. Trading with margin promises big profits, this type of trading is much more risky, but as they say, whoever does not risk does not drink champagne.


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