What is the Best Exchange to Day Trade Cryptocurrency?

What is the Best Exchange to Day Trade Cryptocurrency?

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It's 2020 and there are a staggering 208 different exchanges.

We've gone through all of the top options and put them head-to-head.

There are three key things you want to consider when choosing an exchange:

  1. Instruments – more options to choose from mean more potential setups
  2. Fees – the difference between gradual profit and overall loss
  3. Margin – scale up returns without increasing the size of your account

Let's see which is the best exchange for day trading cryptocurrency.

Instruments

A few years ago, trading cryptocurrency was a little simpler. There was bitcoin and a relatively small number of altcoins to choose from.

These days, things are a little different.

The big choices are Spot Trading, Futures, and Perpetual Swaps.

Spot trading refers to actually buying and selling an asset. This is the most common type of trading. It's what most people refer to when they say they trade cryptocurrency.

An exchanges is great for spot trading if it has plenty of altcoins to choose from and at least one fiat pair (Eg. USD or EUR).

Futures, or more formally Future Contracts, are a derivative instrument. This means their value is pegged to the underlying asset, but they aren't the asset itself.

This means that if you go long on a bitcoin contract, you aren't actually buying bitcoin directly, but you still profit from it increasing in value just the same.

Futures are important for day trading since they allow you to go long or short on a position. Enabling you to turn a profit in any market.

Exchanges with more futures to choose from are better.

Perpetual swaps are also a derivative instrument. They're basically exactly the same as futures but with a different mechanism for staying pegged to the underlying asset.

Number of different instruments for the major cryptocurrency exchanges

Let's unpack this table a bit.

Fiat pairs were counted based on unique pairs. So an exchange with USD, USDT, and USDC would still be counted as having only one pair.

Every exchange had a USD pair and most altcoins traded against BTC.

Altcoins varied from zero on BitMEX, which is used exclusively for futures and perpetual swaps, and 221 on Huobi.

Futures and perpetual swaps tended to be bitcoin and many of the same top altcoins (Ethereum, Bitcoin Cash, Ripple, Eos, Litecoin, Tron, and Ethereum Classic).

Which exchange has the best instruments?

🏆 Binance and OKEx

This is a tie as both these exchanges are neck-and-neck when it comes to the instruments available for trading.

Binance is a bit ahead in the number of altcoins and OKEx in futures/ perpetual swaps.

This means that if you want to trade altcoins then Binance is a better choice and if you want to trade BSV (Bitcoin SV) future, then OKEx is better.

Trade smarter, earn more.

Signal can help.

Fees

One of the important questions that comes to mind when trading frequently is "what are the fees?"

There are three different types of fees: withdrawal, maker, and taker.

Withdrawal is simply taking your money out of the exchange. Since it is a small, flat fee and done infrequently, it isn't too much of a concern.

Maker is when you add liquidity in the market. This means limit orders which sit on the order book waiting to be filled.

Taker is when you remove liquidity in the market. This means market orders which match with other orders on the book and fill immediately.

The fees for each of the exchanges are shown below. Withdraw fees are not dependent on volume, but maker/taker are. To make the comparison simpler, I've selected tiers which can be easily achieved.

Fees for the major cryptocurrency exchanges

As you can see, they are all percentage based. This is great when you're first getting started since it means you aren't incurring large fees when using smaller position sizes.

To compare similar types of exchanges, it's worth noting that Binance Futures, OKEx Futures, BitMEX, and PrimeXBT are all slightly less, since they are all for trading futures.

Which exchange has the best fees?

🏆 Binance

Binance's fees are less than all the altcoin exchanges. When it comes to futures, its fees are less than BitMEX for market orders (Taker) but more for limit orders (Maker).

Trade smarter, earn more.

Signal can help.

Margin

Being able to use margin gives traders the ability to earn higher returns with the same investment.

For example, a return of 10% with 20x margin becomes 200%. Of course, margin comes with risk and has a similar amplifying affect on losses.

Margin can be used with both spot trading and futures/perpetual swaps.

Not every coin can be traded with margin and the amount available depends on which coin it is, if it is a future or not, and what the exchange has decided is reasonable.

The table below gives a sense of what margin looks like for each of the major exchanges. If an exchange isn't listed, then it doesn't support margin at this time.

Amount of margin for the major cryptocurrency exchanges

As can be seen, spot trading has lower margin than futures, but more coins to choose from.

Binance has the most choices for margin spot trading. OKEx has fewer choices but higher margin for some of them. Binance has the highest amount of margin for bitcoin futures and PrimeXBT the highest for altcoin futures.

Which exchange has the best margin?

🏆 Binance

Given the sheer number of options for spot trading and very competitive 125x/75x margin for futures, Binance takes the lead. It is an all around good choice for margin trading.

Trade smarter, earn more.

Signal can help.

Which is the best exchange to day trade cryptocurrency?

Great, now that we've gone through how each exchange compares in fees, instrument types, and margin capabilities – which is the best?

🏆 Binance 🏆

Now that you know which exchange best suits your needs, it's time to put this knowledge into action.

To improve your trading, use Signal. A simple automation tool that makes you a better trader and saves you time.

Input buy and sell orders and rest easy knowing you're protected if the market moves against you. Use features like a trailing stop loss to help you take advantage of rallies and increase profit.

Learn more

Happy trading,
Team Signal