Binance Fiat And Spot

Are you new to the world of cryptocurrency trading? Do you want to understand the different types of trading on the Binance exchange? Well, you’ve come to the right place! Today, GFS Blockchain will help you explore two popular and beginner-friendly trading options on Binance: P2P Trading and Spot Trading.

P2P Trading

What is P2P Trading?

Simply put, P2P (peer-to-peer) trading is a direct transaction between a buyer and a seller through an exchange platform. The buyer chooses a suitable seller based on various factors such as price, reliability, etc., and completes the transaction directly with the seller. The exchange platform (Binance) acts as an intermediary to ensure the security of the transaction and minimize fraud between the two parties.

The Process of P2P Trading

  1. The seller places a sell order on the Binance P2P platform. The cryptocurrency from the seller is temporarily held by the exchange until the transaction is completed. The buyer places a buy order for the desired cryptocurrency.

  2. The buyer and seller meet on the Binance P2P platform and agree on the amount of cryptocurrency/fiat currency to be exchanged.

  3. The buyer pays the seller based on the information provided by Binance and notifies the seller upon completion of the payment.

  4. The seller waits for the buyer to confirm the payment and checks if the full amount has been received before unlocking the cryptocurrency.

  5. Binance transfers the cryptocurrency to the buyer. Successful transaction!

Pros and Cons of P2P Trading

Pros:

  • Binance is a large and secure cryptocurrency exchange, providing comprehensive security features and seller/buyer identification. This allows for quick resolution of any issues that may arise during the transaction.
  • P2P trading can be done through the Binance website or mobile app.
  • Fast transaction processing and minimal transaction fees.
  • Flexibility in payment methods between the buyer and seller, including electronic payment gateways such as Momo, ZaloPay, ViettelPay, ShopeePay, AliPay, Apple Pay, or bank transfers. It is recommended to choose a fast 24/7 payment gateway for bank transfers due to the maximum 15-minute B2B transaction limit.
  • Simple and user-friendly process. After purchasing cryptocurrency with fiat currency, it can be transferred to the Spot wallet for immediate trading.
  • Protection of privacy. The P2P exchange platform does not collect information about the buyer and seller. There is no need to use any bank account or electronic payment gateway to conduct transactions between cryptocurrency and fiat currency.

Cons:

  • P2P trading currently only supports direct transactions for 6 basic cryptocurrencies: USDT, BTC, ETH, BNB, BUSD, ADA. If you want to buy other cryptocurrencies, you need to buy one of these 6 cryptocurrencies first and then trade on the Spot market to get the desired cryptocurrency.
  • Direct storage of fiat currency (VNĐ) is not available on Binance P2P. Transactions can only be made through direct bank transfers between the buyer and seller.
  • Bank information of the seller is not displayed directly on the initial information page. The buyer can only see the account information after proceeding to the payment step. If there are difficulties in transferring between two banks or within the same bank system, the transaction may fail. The buyer may have to cancel the transaction, affecting their reputation on the exchange. If the transaction is canceled three times in a day, no more transactions can be made on that day.
  • Errors may occur during the process. For example, the buyer has not yet made the transfer, but the seller has unlocked and confirmed the transfer of cryptocurrency, or vice versa. In these cases, Binance will provide support to the buyer and seller, but there may be a waiting period for resolution.
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How to Trade P2P

Here’s a step-by-step guide to trading P2P on Binance:

  1. Choose the appropriate payment method.
    Choose the appropriate payment method

  2. Enter the amount of cryptocurrency to be traded and click “Buy/Sell Crypto.”
    Enter the amount of cryptocurrency to be traded

  3. The buyer should take a screenshot of the successful payment and send it to the seller via the chat box to expedite the transaction. These messages will also be used by Binance to evaluate the transaction between the two parties in case of any issues.

  4. The buyer must make the payment directly to the seller using the provided payment information, such as bank transfer, Momo, ZaloPay, etc. If the payment is successfully made, do not click “Cancel” unless the seller has refunded the amount to your account.

  5. If the buyer has not made a successful payment, do not click “Confirm” as payment has not been made yet.

  6. After successful payment, the cryptocurrency will be transferred to the buyer’s funding wallet.
    Cryptocurrency transferred to the buyer's funding wallet

  7. Transfer the cryptocurrency from the funding wallet to the Spot wallet to continue trading on Binance.
    Transfer the cryptocurrency to the Spot wallet

  8. Confirm the amount of cryptocurrency to be transferred between wallets.
    Confirm the amount of cryptocurrency to be transferred

  9. Check that the cryptocurrency is in the Fiat and Spot wallets.
    Check the cryptocurrency in the Fiat and Spot wallets

  10. You’re all set! Start trading on Binance using the P2P method.

Spot Trading

What is Spot Trading?

Spot trading, also known as immediate trading, is a method of exchanging one cryptocurrency for another at the current market price. Buyers and sellers (traders) can profit or incur losses based on the price difference at different trading times when conducting spot trades.

Example:

Let’s say you want to trade the NEAR/USDT cryptocurrency pair on the Binance Spot exchange. The current market price for NEAR/USDT is 5, meaning 1 NEAR = 5 USDT. You have 1000 USDT in your spot wallet and want to buy NEAR with the entire amount. Here’s what you can do:

  1. Choose the NEAR/USDT trading pair and place a buy order for NEAR. If the trade is successful, you will have 200 NEAR and no USDT in your spot wallet.

Congratulations! You have completed one spot trade for the NEAR/USDT pair.

To make a profit from this spot trade, you can wait for the market price of NEAR/USDT to increase and then place a sell order for your NEAR (the price at which you sell depends on your profit-taking strategy). If the market price reaches, let’s say, 12 NEAR/USDT, and you successfully sell all your NEAR, you will have 2400 USDT in your spot wallet and no NEAR.

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In this way, you have made a profit of 1400 USDT (excluding transaction fees) from two spot trades on the Binance Spot exchange.

Types of Spot Trading Orders on Binance

Spot trading is a popular method of trading due to its user-friendly nature and various order types to meet different trading needs. Here are four types of orders available for spot trading on Binance:

1. Limit Order

  • Select “Limit” and enter the necessary information for the order, including the buy/sell price and quantity of the cryptocurrency.
  • You can also use the slider below to set your budget for the trade.
  • Click the “Buy/Sell” button to place the order.

2. Market Order

  • Market orders involve buying or selling cryptocurrency at the current market price.
  • Enter the quantity of the cryptocurrency you want to buy/sell.
  • You can also use the slider below to set your budget for the trade.
  • Click the “Buy/Sell” button to place the order.

3. Stop-Limit Order

  • Stop-Limit orders combine two types of orders: stop orders and limit orders. Traders often use them as stop-loss orders in the crypto market.
  • When you place a Stop-Limit order, if the market price reaches the stop price, the limit order will be triggered immediately. To better understand this order type, let’s look at the example below:
    • The current market price for ETH is 3500 USDT. You have 4000 USDT in your spot wallet. Place a Stop-Limit order to “Buy 1ETH at a stop price of 3000 USDT and a limit price of 2800 USDT.”
    • When the market price drops to 3000 USDT, the limit order will be activated at 2800 USDT.
    • When the market price reaches 2800 USDT, the order will be executed, and you will have 1ETH and 1200 USDT in your spot wallet.

4. OCO Order

  • OCO (One Cancels the Other) means that when one order is executed, the other order will be canceled.
  • An OCO order is a combination of a limit order and a stop-limit order. It allows traders to place two orders simultaneously, and when one order is successfully executed, the other order is automatically canceled. Let’s look at the example below for a better understanding:
    • The current market price for ETH is 3500 USDT. You have 4000 USDT in your spot wallet. Place an OCO order to “Buy 1ETH” as follows:
      • Limit Order: Set the buy price of ETH at 3000 USDT. When the market price reaches this level, the buy order at 3000 USDT will be immediately triggered and cancels the stop-limit order.
      • Stop-Limit Order: Set the stop price to buy ETH at 3800USDT. When the market price reaches this level, the limit order at 4000 USDT will be triggered, and the buy order at 4000 USDT will be executed, canceling the limit order at 3000 USDT.

How to Place Spot Trading Orders on Binance

Here’s a step-by-step guide to placing spot trading orders on Binance:

  1. Log in to the Binance website and select “Trade” > “Simple” from the menu.
    Binance Spot Trading

  2. Choose the cryptocurrency pair you want to trade by typing it in the search bar and selecting it.
    Choose the cryptocurrency pair

  3. Choose the spot trading order type. GFS will introduce four order types, which you can refer to below:

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1. Limit Order

  • Select “Limit” and enter the necessary information for the order, including the buy/sell price and quantity of the cryptocurrency.
  • You can also use the slider below to set your budget for the trade.
  • Click the “Buy/Sell” button to place the order.
  • The order will be in a waiting status, as shown in the image below:
    Waiting status of a Limit Order
  • The order will be executed if the market price matches the price you set for the order.
  • After the order is executed, it will no longer appear in the “Open Orders” section. You can check the transaction history for successful orders.

2. Market Order

  • Select “Market” and enter the quantity of the cryptocurrency you want to buy/sell.
  • You can also use the slider below to set your budget for the trade.
  • Click the “Buy/Sell” button to place the order.
  • After clicking the “Buy/Sell” button, the order will be executed immediately. You can check the successful order in the transaction history.

3. Stop-Limit Order

  • Select “Stop-Limit” and enter the necessary information for the order, including the stop price, limit price, and quantity of the cryptocurrency.
  • You can also use the slider below to set your budget for the trade.
  • Click the “Buy/Sell” button to place the order.
  • After clicking the “Buy/Sell” button, the stop-limit order will be waiting for execution. You can check the successful order in the transaction history.
  • The limit order will be activated if the market price reaches the stop price, and the order will be executed when the market price reaches the limit price you set.

4. OCO Order

  • Click the arrow next to “Stop-Limit” and select “OCO” from the dropdown menu.
  • Enter the necessary information for the order, including the stop price, limit price, and quantity of the cryptocurrency.
  • You can also use the slider below to set your budget for the trade.
  • Click the “Buy/Sell” button to place the order.
  • After clicking the “Buy/Sell” button, the OCO order will be waiting for execution. You can check the successful order in the transaction history.
  • If one order is executed, the other order will be canceled automatically.

Now you’re ready to start spot trading on Binance!

Conclusion

There are various ways to trade in the cryptocurrency market, and it’s important to understand the different types of orders to make safe and effective investments. With the information shared today by GFS Blockchain, new investors can choose the best trading method for themselves on the Binance exchange, ensuring the safest and most profitable income.

Stay tuned for more articles in the “Trading Guide” section of GFS Blockchain. Don’t forget to join the GFS community groups to discuss with other members:

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