How Binance Takes Responsible Trading Seriously, and Why You Should, Too
Key Takeaways:
Responsible trading is about having complete control over your trades and being ready to face any consequences for your actions.
This responsible approach helps you avoid substantial losses and safeguards you from having your entire trading account wiped out.
At Binance Futures, we encourage users to trade responsibly and practice self-discipline, especially when they feel pressured by heavy losses or a losing streak.
Trading is a serious business. Yet, novice traders often don’t approach trading seriously enough.
Most novice traders often look for quick wins, and they rarely have a carefully outlined plan of how to approach the markets. In contrast, successful traders take responsibility for their actions and control factors that are within their means.
Trading should be well-planned and deliberate. If you want to make profits consistently, you must trade responsibly.
What is Responsible Trading?
The beauty of a free market is that everyone can participate in it. When you’re in a trade, the market will do whatever it wants to do – it could go up, down, or sideways. This is entirely out of your control.
What you can control, however, is the risk you take, how and when you trade, and the choice of market conditions that fit your methods and style best.
Responsible trading is about having complete control over your trades and taking responsibility for your actions. Trading responsibly also implies not spending beyond your means. In other words, responsible traders don’t risk money that they can’t afford to lose.
The best way to be a responsible trader is to embrace the notion that in trading practice does not make perfect. No one can guarantee you a positive return, no matter how good you are. The key is to understand and adopt risk management strategies.
Below are some tips and good practices that will help you become a more responsible trader.
4 Pillars of Responsible and Safe Trading
1. Practicing Self-Discipline
Self-discipline is the ability to identify and avoid any behavior that could lead to negative consequences. In trading, this means telling yourself to avoid harmful excesses, like acting compulsively or treating trading as gambling.
At Binance Futures, we encourage users to trade responsibly and practice self-discipline, especially when they feel pressured by huge losses or a losing streak. To that end, we have launched the Cooling-Off Period function for users to disable Futures trading activities temporarily to prevent compulsive trading behavior.
Once the Cooling-Off Period function is enabled, you will not be able to trade all futures-related products such as USDⓈ-M and COIN-M Futures, Grid Trading, Options, and Futures Battle via the Binance App or desktop.
To get started with the Cooling-Off Period function, simply go to the futures trading interface and click [Trading Rules].
Next, select the duration of your Cooling-Off Period and click [Confirm] to activate.
Learn more about the Cooling-Off Period function in our FAQ.
2. Continuously Educating Yourself
Cryptocurrency trading is a vast subject that may seem overwhelming to novice traders. The truth is that trading is complicated; there are no shortcuts. Therefore, it is important for traders to continuously educate themselves to stay sharp and competitive.
Binance Futures has continuously worked towards educating traders on every aspect of crypto trading, from the underlying technology of cryptocurrencies to the complexities of cryptoeconomics.
Educational content is freely available on Binance Academy, Binance Research, and even beginner-friendly product overviews such as Bitcoin Futures Overview.
3. Protecting Your Capital at All Times
Risk management is a core concept that is key to every winning trader’s success. It helps you avoid substantial losses and safeguards you from having your entire trading account wiped out.
On the Binance Futures trading interface, we have embedded risk management features such as stop-loss orders to help users manage risk.
Additionally, Binance Futures has also established other safety features such as liquidation mechanisms and insurance funds to protect users from adverse losses.
4. Knowing When to Stop
Knowing when to stop, and learning to recognize unhealthy trading habits, calls for being honest with yourself about the risks you take on and the sorts of behavior that accompany it.
After an unsuccessful trade, for example, do you then keep trading to recoup your losses immediately, putting yourself at risk of running up heavier losses in the process?
As a responsible trader, you should always keep yourself in check and ensure that you have procedures in place to avoid compulsive trading behavior.
Binance Futures has set in place several procedures to remind users of such risks and prevent them from trading on impulse. For instance, when a user experiences a losing streak or suffers a heavy loss, we continuously remind them of the risk involved in trading and encourage them to hold back on trading activities.
Exchanges and Users Share Responsibility
Naturally, responsibility doesn’t end with the traders. Every exchange is responsible for educating its users, as much as it is for enabling access to the products. In a sense, because exchanges can easily list new projects or tokens, it is even more important to ensure that responsible trading principles are inculcated in users’ DNA.
Binance Futures has made sure its products are embedded in a complete risk management system that delivers a safe and fair trading experience. We offer users the necessary means and tools to:
Prevent trading addiction by setting trading limits and self-exclusion tools.
Guarantee data privacy and security by adding security tools designed with privacy in mind and compliant with regulatory requirements.
Deliver a secure trading environment to users by integrating cyber-security monitoring capabilities.
Binance Supports Responsible Trading
We are conscious of our market-leading position. It is because users have a good experience with us that we became the largest crypto derivatives exchange by trading volume. As a market leader, we have a great responsibility to educate and protect users.
We continuously think of ways to promote and ensure responsible trading among our users so they can have a pleasant and safe experience, which include:
1. Insurance Funds - Unlike other insurance funds, Binance’s insurance funds are used in the way they were intended for. On several occasions where market volatility was extreme, our insurance funds were activated to absorb losses from users.
2. Platform Security - As one of the most exciting industries, the cryptocurrency space attracts a lot of attention. Unfortunately, this also includes bad actors who attempt to find ways to disrupt the market for their gain. There are often reports of hacking attempts, some successful, others thwarted. What is certain is that no single platform or exchange can claim to be 100% hack-proof, so the goal is to ensure we have well-rounded protection systems in place to prevent these attempts. Even as trading volumes grow by the day, we continue to deliver one of the fastest and most stable matching in a safe environment protected from bad actors.
These are just a few examples, and we will continue to innovate and improve our offerings. As a service provider, we always think of user-friendly ways to offer a safe and responsible trading platform. As a business, we think of sustainable and responsible practices that benefit our users and the market.
Read the following helpful articles for more information about Binance Futures:
(Blog) Crypto Futures Trading: Things You Need to Know Before You Begin
(Blog) Crypto Futures Risk and Money Management: 5 Things You Can Do to Better Manage Trading Risk
(Academy) The Psychology of Market Cycles
And many more Binance Futures FAQ topics
Risk Warning: Digital asset prices can be volatile. The value of your investment can go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance is not liable for any losses you may incur. Futures trading, in particular, is subject to high market risk and price volatility. All of your margin balance may be liquidated in the event of adverse price movement. Past performance is not a reliable predictor of future performance. Before trading, you should make an independent assessment of the appropriateness of the transaction in light of your own objectives and circumstances, including the risks and potential benefits. Consult your own advisers, where appropriate. This information should not be construed as financial or investment advice. To learn more about how to protect yourself, visit our Responsible Trading page. For more information, see our Terms of Use and Risk Warning.