Dummies guide to Binance Margin Trading - Review and FAQ //
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Dummies guide to Binance Margin Trading - Review and FAQ

Alsyd Eabidin

I want to review binance margin trading today and I'm going to go through several questions/comments that I've received over the last week. Includes questions on loan interest, leverage, how the mechanics of margin trading works, how to best use it to your advantage, and more.

What is Binance Margin Trading?

Binance Margin Trading is a feature that allows users to borrow funds from the platform in order to trade. The borrowed money will have to be repayed with interest, determined by the lender. This can be a risky proposition for both sides of the deal.

Binance Margin Trading is available on select pairs and requires that you first deposit collateral into Binance Wallet before you can open a margin position. The maximum leverage available is 1:3. For example, if you have $5 in your Binance wallet, your margin position could be worth up to $15 because of leverage ($5 * 3 = $15). You can choose how much collateral you want to leave in your Binance Wallet and how much you want to borrow from Binance (1x-3x leverage). Once your order has been filled, the entire amount will be used for trading purposes and any remaining balance will be returned back to your account.

Advantages of Margin Trading on Binance:

  1. Binance margin trading is a feature that allows traders to borrow funds from to trade.
  2. The platform enables the borrowing of funds from a peer-to-peer network.
  3. Interest rates are set by users and are negotiable.
  4. When you borrow funds for margin trading, you will be charged interest on the loan in real time.
  5. The maximum leverage you can use is 1:3 until 5th Aug 2019, and will be reduced to 1:2 after 6th Aug 2019.
  6. In order to use 1:3 leverage, users would have to complete a “Risk Level Assessment”, which is one step above KYC verification.
  7. Traders can only start margin trading by first depositing their own cryptocurrency into the platform.
  8. There are advantages and disadvantages of using leverage in Binance Trading.

How to start Binance Margin Trading?

 Binance is one of the best cryptocurrency exchanges in the world. It offers a wide range of altcoins, has low transaction fees and offers margin trading.

The platform has been around since mid-2017, but it’s still one of the most popular places to trade cryptocurrencies. It’s not just for beginners either: Binance boasts over 5 million users and 300+ trading pairs.

If you want to learn how to use Binance, here are some tips on how to start using their platform:

  • Go to here and login to your account.
  • Go to Margin Trading.
  • Click on Margin Trading & select the asset you want to trade with.
  • Enter the amount of asset you wish to purchase & click on Buy **Asset** button
  • Click on Margin Account at the top and you will be able to see your Total Net Asset. Value, Loanable Amount, Initial Margin Ratio and Maintenance Margin Ratio.
  • It isn't as complicated as it sounds.

Click on Margin Account at the top and you will be able to see your Total Net Asset Value, Loanable Amount, Initial Margin Ratio.

Which pairs can I trade on margin?

  1. BTC / USDT
  2. ETH / USDT
  3. XRP / USDT
  4. BCH / USDT
  5. LTC / USDT
  6. EOS / USDT
  7. ETC / USDT
  8. NEO / USDT
  9. BNB / USDT
  10. XMR / BTC
  11. LTC / BTC
  12. This is the current list of pairs on binance you can trade using margin trading.

How to lend your crypto on Binance?

  1. Binance provides the best options for margin trading and it is the most popular crypto-to-crypto exchange.
  2. Before getting started, it is important to understand that margin trading is very risky business.
  3. It allows you to earn money from your crypto holdings if the market moves in a favorable direction for you.
  4. With crypto loans, you can offer your cryptocurrency as collateral in return for a loan which you pay back with interest.
  5. This process gives lenders access to the collateral without actually selling it and borrowers can get a loan without going through a troublesome bank process.
  6. Margin Trading for beginners basically works this way: you put a certain amount of funds (cryptocurrency like Bitcoin or Ethereum) on your account and borrow a certain amount of other cryptocurrencies from Binance’s platform. Then you sell them at a higher price and buy them back at a lower price. The difference between buy and sell would be profit or loss.
  7. Margin trading is an effective strategy to make profits by taking advantage of the difference in price of the same assets over time, but this is not suitable for everyone.

What is the interest rate for the loans on Binance Margin Trading?

Binance Margin Trading is a feature that allows you to trade more than you would normally be able to by using leverage. Binance offers 1:2, which means that for every $1 worth of cryptocurrency you have deposited, you can borrow up to $2 worth of it. This allows you to put down less capital and still make the same amount of trades.

The interest rate for the loans on Binance Margin Trading is the same across all pairs. However, how much does it cost to borrow depends on each asset’s exchange rate (USDT). Some examples of altcoins: ETH, BNB, NEO, XRP, TRX, EOS, DASH etc

  • BTC: ~4%

  • Some examples of altcoins: ETH, BNB, NEO, XRP, TRX, EOS, DASH etc

Is Binance Margin trading risky?

  1. Binance margin trading allows a user to borrow money from a broker to trade a financial asset, which forms the collateral for the loan from the broker
  2. If you are an experienced trader who knows what you're doing and have always been comfortable with your risk, Binance margin trading is good for you.
  3. However, if you don't know what you're doing or are a novice, then it can get complicated very quickly. 
  4. High leverage means you may win huge or lose big. You need to know what you're doing if you want to go into Binance margin trading. 
  5. Binance is not the only platform that offers margin trading, though they do offer low fees. 

How do I pay back the borrowed money on Binance Margin trading?

  1. You have to pay back the loan debt in the same currency that you borrowed.
  2. If you borrow BTC, you have to pay back BTC. If you borrow ETH, you have to pay back ETH.
  3. If you can’t buy back the amount of the debt by selling the coins, Binance will automatically place sell orders for those coins at a price that is higher than the market price.
  4. So if you’re borrowed 10 Bitcoin and the market price drops below $9,000 and there are no BTC buyers on Binance at this price, your position will be liquidated and all of your margin balance will be used to close your position.
  5. When this happens, any remaining assets in your margin wallet are transferred to your spot account.

You should take care when using bianace margin trading

Can I short sell coins on Binance Margin trading platform?

  1. Binance Margin trading is an extension of the existing Binance Spot trading platform that allows users to trade cryptocurrencies with leverage.
  2. Yes, you can short sell coins on Binance Margin trading platform.
  3. You need to meet the minimum amount of capital required for margin trading in order to short sell coins on Binance Margin trading platform.
  4. No, you can't short sell coins on the Binance Spot trading platform.
  5. Before you begin, make sure to transfer your funds from your asset holdings to one of your margin wallets in order to begin short selling coins on the Binance Margin trading platform
  6. You can enter your 'long' or 'short' trade either directly from the “Trade” tab or from the “Margin” tab using take-profit and stop-loss orders.
  7. Short selling coins on Binance Margin trading platform is simple, as long as you meet these requirements.

Where is the best place to exchange your coins after trading them on Binance margin trading platform?

 If you're trading on Binance margin trading platform, then you already know how awesome it is. You can trade your coins and make huge amounts of profit with just a few bucks. And if you trade wisely, then your profits will be even bigger.

But what if you want to exchange some of your coins after trading them on Binance margin trading platform? That's where things get tricky! There are plenty of sites out there that offer this service but not all of them are legit. And even if they are legit, they might not accept your coin or give you the best rate for exchanging it.

So where should you go? To me, there's only one place: Binance. It has all the secure features, flexible interface and other options that a quality platform should have. And it is not only comfortable to trade there, but also it is possible to get payouts with no problems.

So I would recommend binance as the best option for you!

Conclusion about my first experience with binance margin trading

  1. With the right amount of preparation and a risk management strategy, margin trading can help you multiply your account balance.
  2. The most crucial aspect of this is to literally take it slow.
  3. Becoming an expert at margin trading takes time and practice, and starting with small amounts will give you the knowledge necessary to trade more confidently later on.
  4. Additionally, I have learned that choosing my own personal risk level is really important.
  5. While this is pretty obvious, it’s even more important when investing in volatile assets such as cryptocurrency, which are generally more high-risk than other asset classes.
  6. But diversifying in a smart way and being willing to invest for the long term can help offset some of that risk.
  7. It goes without saying that doing thorough research before placing any trade is essential.
  8. The key takeaway from using Binance’s new margin feature is that while it’s exciting to finally be able to trade with leverage on my favorite exchange, I still need to be careful not to get ahead of myself.
  9. Margin trading can be profitable if done correctly.

Learn how to trade bitcoin and other altcoins in the margin market with a leverage of up to 125x!

 Binance is one of the biggest cryptocurrency exchanges in the world. It has a very simple and easy to use interface that makes it easy for beginners to start trading.

Binance offers a margin trading feature, which is not offered by many other exchanges. This allows you to trade with leverage up to 1:25, which means that you can buy or sell more cryptocurrencies than you actually have.

The following guide will show you how to open an account on Binance, deposit money and place an order using the margin trading feature.

This guide turned out to be very helpful to many people that wanted to understand the basics of margin trading. And I'm happy to say, it continues to become more and more in demand by new traders on the binance platform. Of course, I always suggest anyone interested in margin trading use extreme caution. Margin trading can quickly turn from an opportunity for growth into a total loss for your invested capital quite easily.