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How to Use Strategy Trading to Trade Like a Pro on Binance?

The crypto market is currently unpredictable. Pessimists are forecasting ultimate capitulation, and optimists are expecting $100,000 per BTC soon. So is there a chance to make money in such an uncertain environment? Yes, if you decide to go for Strategy Trading offered by Binance.


Introduction

I think it’s clear – Binance survives from trading fees. Fractions of cents flow into its account millions of times a day. So it’s evident that it wants as many users as possible. That’s why it does a lot to convince crypto traders to use its services instead of its competitors. It will offer them everything it can to gain traffic to the site… and reasonable traders can profit significantly from this.

The last subject of crypto websites was the platform’s elimination of fees for BTC trading. That’s right – now we can trade Bitcoin without paying the exchange a single cent. Binance decided to take this step, hoping that investors would start with BTC and switch to trading other currencies, from the handling of which the proceeds would already be there. Fair transaction.

Strategy Trading is another way to get customers to use Binance’s services. But what does this term mean?


What is Strategy Trading?

Sounds serious? It is, but the matter is, in fact, simple. Strategy Trading is a combination of several different trading models based on automation and Grid Trading. Still not entirely clear? You can take a peek at the introductory page on the topic or, together with us, continue to break down the case into pieces.

On the Strategy Trading platform, we have four main components:

  • Grid Trading on the Spot MarketThe spot is simply an exchange market where we exchange cryptocurrencies. We pay USDT, and we get BTC, all clear. Grid trading, on the other hand, means using a price grid – placing multiple Buy and Sell orders in close range to make money on each up or down coin movement. A well-set order allows us to automate our profits – regardless of the direction in which the market is moving.
  • Grid trading in the Futures market – You can find more information about the Futures market here, but in short, it differs from Spot in the object of trading. We are not buying a real Bitcoin or Ethereum but a contract, allowing us to buy or sell this coin at a specific price. Also different will be the ability to use leverage to maximize our profits. On the other hand, the idea of Grid trading remains the same, and just like in Spot orders, we will define the required parameters.
  • TWAP Algorithmic Trading – An option available in the Futures market that is relevant for large orders. Splitting a larger order into many smaller ones allows you to get a better execution price, even when the order size is larger than the available liquidity. The name TWAP stands for time-weighted average price obtained over an assumed period.
  • Volume Participation Algorithm – It is another useful option for more prominent players. It allows for executing large orders without affecting the market while aiming for the average market price. Moreover, it involves executing trades at a rate that correlates with the volume of liquidity and will not affect the asset price too much.

Strategy Trading In Practical Way

It may sound attractive, but is the average user able to handle it? Yes, without too much trouble, if he looks at the page dedicated to Strategy Trading. So let’s temporarily put whale options aside and focus on Grid trading in both its varieties: Spot and Futures.

To get started, hover over “Trade” at the top of the screen, then click on “Strategy Trading.” Alternatively, you can go to the appropriate place by clicking on this link.

strategy trading

Now select the spot or futures option and adjust your settings.

trading futures binance

Spot Grid

We can set the parameters of the order manually or accept automatic settings based on the technical analysis of the currency pair. In manual mode, we control such elements as the price level that triggers the order, stop loss and take profit levels, or density and grid settings.

Futures Grid

As before, we can choose between manual and automatic order settings, but we get several additional parameters. First, we can specify whether we want our bot to be market-neutral or prefer the Long or Short direction. Secondly, we choose the desired leverage level from 1 to 50. Obviously, the higher the leverage, the higher the earnings. But also, the risk of clearing your deposit increases dramatically. Finally, we should determine whether to hedge the position with our entire portfolio (Cross Margin) or only a certain amount (Isolated Margin).


Strategy Trading At A Glance

Everything is fine, but what should a freshman who does not quite grasp the issues of Grid and Futures do? First, he should make a solid introduction to the materials, looking, for example, at the Binance website. However, assimilating the basics may not be enough to set up a profitable order on his own. If only someone would be kind enough to help a little….

Fortunately, there is indeed such an option. This site can preview the most profitable strategies, whose ROI sometimes exceeds 1000%. Moreover, we can even copy the winning strategies and set them as our own! This way we can be sure that our order will bring the same profits as the one developed by an experienced trader.

In the first half of July 2022, the best results on the Spot market are the GMT/BUSD pair (ROI from 330 to 920%). On the other hand, in the Futures market, the pairs BNB/USDT (ROI 1450%), ETH/USDT (1320%), and ADA/USDT (1260%) dominate.

binance strategy trading

In both markets, we generally only need a deposit of no more than $100 to open a copy order. So it turns out that whales do not possess a monopoly on profits.

However, we must remember that there are no guarantees in the market. Conditions can suddenly change, the direction can reverse, and the greatest champion can make a mistake. Therefore, we should always bet only as much as we can lose without serious consequences for our budget.


Advantages And Disadvantages Of Strategy Trading

Once we know the whys and hows, let’s try to take stock of the pros and cons of this type of trading.

  • Automation – We enter the parameters, approve the strategy and we can take care of something else. Of course, it’s a good idea to check at least once a day whether the strategy is still working, but compared to manual scalping we have much more time for ourselves.
  • Low fees – On most currency pairs, Binance has the lowest fees in the entire industry. This is important especially in Grid trading, characterized by a large number of small transactions.
  • Any direction – You can make money on increases, decreases, and even when you don’t know which way the market will go. In a neutral setting, the price of the coin can be the same after a week, which does not prevent our balance from increasing significantly.
  • Leverage – It’s like a sharp knife – if you don’t know what you’re doing, it’s easy to cut yourself with it. On the other hand, with a properly set order, it significantly increases your profits. To begin with, however, do not combine with a large leverage, for your own safety.
  • The possibility of loss – Nothing is certain in this world. As we have already mentioned, the best strategy can fail. Moreover, you may be right about the direction of the coin, but the deposit may end sooner. As Maynard Keynes once stated, “The market can stay irrational much longer than you can stay solvent.”

In conclusion, an old quote: practice makes perfect. Don’t try to make a fortune in a week, it won’t work. Start small, with no leverage, note your mistakes and repeat the process. Understanding why you failed is much more important than success achieved by accident.

Binance Demo Account – Mock Trading

Also, if you want to practice your skills you can use demo account of Binance called Mock Trading. To do so, you need to follow just a few simple steps:

Step 1: Log in to your account. If you don’t already have one, create one at this link. Next, navigate to Binance Futures by hovering your mouse over “Derivatives” at the top and then BUSD-M Futures. Alternatively, you can click directly on this link.

binance futures

Step 2: Click on your Profile and “Mock Trading”.

multi assets mode

Step 3: Click continue and take the Binance Futures quiz. The trial account will be funded with a starting balance of $3,000.

Step 4: Click “Back to Live” to test yourself in the real market.

mock trading binance

Step 5: You can also access the Trial Trade through the Binance app. Enter the Futures option and then Mock Trading.

If you want to know more about trading BUSD-Margined futures contacts on Binance, check out official Binance website for more info!

 

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