Trading Cryptocurrencies (1)



The world of cryptocurrency is expanding each day with the need to gear up to the present age mode of managing one crypto assets and resources. One of these is trading your crypto assets on exchanges. This can be done on many exchanges but there is an issue, knowing the right way to trade, this comes from knowing the different terminologies that come with trading with their advantage and disadvantage. This helps to align newbies, investors with the technicalities of trading, mitigate loss and make a profit.

We already learn from the course of this week about the different types of trading by Professor @reminiscence01 on Trading Cryptocurrency. With the two major types of trading being Spot and Future Trading


What Is Spot Trading ?

Spot Trading is the first go-to for traders most especially newbies. Traders can easily pick a price for their cryptocurrencies and sell at the Spot price, the easiest way to trade is done through spot trading. New entrant to crypto finds Spot trading as simple as ABC. Spot trading is the ability to buy and hold a coin till it hit profit, then sell. More experienced traders can also use Spot trading to buy a coin at the present market price, then set it to sell at a particular price.

Advantages of Spot Trading.

  • Traders are safe from market liquidation and volatility.
  • Spot trading presents the fastest and most durable way to trade crypto.
  • Traders are not bound by a minimum amount to buy a coin. Though exchange like Binance, HotBit and many more has a minimum amount any crypto asset can be traded, the minimum is set at the least negligible.
  • Spot trading is transparent, unlike DeFi AMM. Traders can pick from the many price action of the crypto coin they want to buy by holding the corresponding coin and trading it to their preferred coin.
  • Spot trading provides immediate delivery of coins to individual wallets. Unlike IEO, IDO and the likes deliver coins after a set time. Spot trading on exchanges comes with immediate ownership and access to coins.

Disadvantages of Spot Trading

  • Initial entry into Spot trading at an inflated price will surely lead to loss of asset value when the token price has had a retrace or market correction.
  • Newbies coming into Spot trading newly tends to make a loss from spot trading due to their inability to interpret market trades and fluctuation. They play into the volatile hand of cryptocurrency and exchange bots.
  • In the case of any irregularities in either trading or making a loss after trading has been done, there are no refunds of funds because the token has exchange hands.
  • Both Newbies and oldies play into the hands of bots program into many exchange trade. Market manipulation and the likes make sure the market goes against traders while the bot makes the most profit from exchanges.
  • There is no interest rate applied to Spot trading. Nothing like ROI, APR, APY when trading on spot trading.
  • Traders who hold coins on exchange in spot trading are most time not eligible for airdrop of many cryptocurrency projects. They are instructed to hold it in their wallet and not on exchange. Therefore, holding a coin on the spot trading market makes traders ineligible to get airdrop of other coins.

Future Trading.

Crypto traders can now have more options in trading their coins, an advanced version of spot trading is the Future Market trading. Though navigating through Future trading isn’t for the faint-hearted, it gives better leverage to trading by giving opportunities to traders to predict market price and action of a coin, by setting coins price, go long or short on a coin, Future Trading comes with the diversity of trading. Though it makes volatility more dangerous, Future traders are encouraged to be more professional in market analysis. The buying of Future contract by adding leverage to it. By leveraging at a particular rate, 5X, 10X or going all-in with the coin. Future trading gives the chance to buy a particular asset at a set date and price through a future contract.

Advantage of Future trading.

  • Investors are the main focus of future trading and it helps investors to be in control of the price of their coins.
  • Future traders are open to the margin in price action in the market.
  • Price fluctuation doesn’t affect future trading. Since investors can enter the market at a set time, date and price, it makes them safe from market fluctuation while the leverage help to mitigate losses, investors are advised not to under-leveraged future contract in other not to be in loss.
  • The best way to make a profit from crypto trading is by riding both the bull and bear market. Future trading makes this possible.

Disadvantage OF Future Trading.

  • It’s the riskiest aspect of trading, especially when greed to make a huge profit come in when leverage is set too high.
  • Options, menu and triggers on Future are too complicated for newbies to decipher and use, therefore, only professional and investors makes use of future trading.
  • Future traders despite being able to set future prices through a future contract cannot affect future events, that is why their investment is still at risk of external news and factors.
  • With an expiration date set to many future trades, traders are prone to makes losses at the end of an investment.

Margin Trading

On the occasion of not being able to have huge command at the market. Margin Trading comes to play by providing a higher purchasing power to traders by giving them the opportunities to buy more through acquiring more purchasing power leveraging at the market like futures trading. Traders can use a $50 owned crypto asset to purchase $5000 worth of coins by leveraging on his coins at 100x. When such a trader makes losses, his account is liquidated, while purchasing power is derived from the platform exchange through the borrowing of funds.

Advantage of Margins trading

  • The most visible benefit of margin trade is the ability to command much higher funds at the market through borrowing. This opens higher opportunities for traders to make the best use of the market

  • Margin trade commands speciality and professionalism.

    The disadvantages of Margin Trading

  • Margin traders face the risk of liquidation when huge losses are made. This can also extend to the exchange itself.

  • The intricacies of margin are so advanced and can be highly risky for not only newbies but professional investors.

Whenever a newbie is trading, he is exposed to so many options in the market and this goes to orders, there are different types of cryptocurrency Orders.


Market Orders is simply the lifelines of sports trading, traders can immediately exchange their coin for their corresponding tiers with the market order. Market orders are easy to use and comprehend.

GALA is still a new coin, we can see from the screenshot above concerning the GALA/USDT pair, above here, we have a market order to buy GALA at $0.89 USDT.

Pending Orders: This goes by its name, it’s when traders set a particular buy and sell price of its crypto token on an exchange. We also have different types of pending orders.

Limit Orders: This is the buying of coins at a set price triggered by price action meeting such a price set already. When a trader has studied the market and found a pump is already in place and also wish to opt-in at safer price action. Such a trader can use the limit order, this can be done by setting the limit order at a set price, at any time the market movement reached this set price, it triggers a sell or buys.

Example of limit order on Binance Exchange


Stop-limit order: This is another type of order that protect traders from manipulative price action. A trader knowing well from an analysis that crypto assets might have a rest will set a stop-limit order, thereby enabling the system to buy at a set price by giving a limit to the price.


the above shows a stop-limitnorder of GALA/UDT price set at $0.01
Stop-limit order as been set above.

OCO Order: This is One Cancel the Other order. In protecting oneself against losses and market manipulation. Traders set soo many orders at the market, it is necessary to be in control of your funds. OCO order enables a trader to open to different orders but whenever an order is met, the other order is cancelled. To initiate an OCO order comes when a trader has studied the market enough to see an asset retesting resistance. Such traders will place a stop-limit order and limit order. Immediately one of the orders is triggered, the other order gets cancelled.

Screenshot_20211015-200057 2.png

Exit Order: As the name implies the issue is to exit a trade when profit is made. Exit order comes in two forms.
Stop-loss order: This is the saving grace for a crypto trader to mitigate loss. This is a set price triggered when the market goes against traders. This order can run concurrently with market orders and pending orders.
Take-Profit order: This order closes the position of the trade when profit is made at a particular price.

Performing a trade on Binance Exchange

  • First is by login in on the Binance app, then search for the crypto token you want to exchange by clicking the Market icon. Also, make sure you have enough corresponding assets to trade with, e.g. USDT, BNB, BTC, and ETH.

    Picking your favorite crypto token to exchange in the market.</center

    change in the market.**

    • After searching the crypto assets, click the pair that suits you, a spot trading platform comes up, a trader can from there exchange his favourite coin for another asset. If the price action a trader takes is the same as the latest and lowest price action on the sell menu, such coin will be sod instantly and the corresponding asset delivers to its owners.
      The same goes for the highest price action on the buy-side of the market trade. The order to buy or sell gets filled easily. But if the price hasn’t been reached by the market, it will come down as a trade buy Limit.


    To wrap it all, there are no trading functions without their good and bad side depending on how experienced a trader is and what he wants to do with his crypto asset. But whenever a trader knows these things, he tends to be more equipped to sail through the manipulation of the market.

    Posted Using LeoFinance Beta