Cryptocurrency trading is becoming more and more popular as the market matures and goes mainstream.
This is evident from the increasing trading volume around the world over the last few years. Demand is growing, so there are new players trying to provide a more streamlined user experience.
One such relatively new cryptocurrency exchange is BYDFi. The platform was launched in 2020 and is focused on providing professional, convenient and innovative cryptocurrency trading features.
From copy trading to derivatives trading, BYDFi offers a wide range of options for both novice and experienced traders. Below is a complete overview and guide for using the BYDFi exchange.
How to register with BYDFi
Registering a new account with BYDFi is quite smooth. When you go to the official website, you will find a button in the upper right corner where you can register.
Here is the screen you will get:
Make sure you enter a valid email address as you will need to verify it immediately with a code to sign up. Also, keep in mind that it may take a while to receive the code itself. If you don’t get it the first time, you can always request a new code within a minute.
After creating an account, the first thing you should do is go through all possible security measures.
On the Account Security tab, press the Manage button in the security center and follow all the steps which include:
- Phone number verification
- Email Verification (This should already be done)
- Google Authenticator
- Fund password and so on
You can also whitelist payout addresses for extra security and only use them when you want to withdraw funds from your BYDFi account.
Technically, you can use the exchange without going through the Know Your Customer (KYC) process, but restrictions make it difficult. If you want to remove them, make sure you verify your identity – this is a standard procedure that almost all legitimate exchanges require. It is also relatively simple and only takes a few steps.
After completing all the above steps, you can start using the platform. Let’s see how to deposit funds first.
How to make deposits and withdrawals on BYDFi
If you have used any other cryptocurrency exchange before, you should have no problems with this particular step.
In the top navigation menu, you will find the Assets tab and through the drop-down menu that appears when you hover over it, click on the Deposit button.
This is the screen you’ll land on:
From here, all you have to do is select the network you want to use. Once clicked, the platform will automatically generate a suitable escrow address for you to send funds to.
Note: Always double check the network you are using. Sending funds over the wrong network or address may result in irreparable loss of funds.
As you can see, there is no minimum deposit. Network charges apply here.
After depositing funds, they must be transferred to the appropriate sub-accounts, depending on whether you want to use the spot exchange, derivatives exchange or other products:
Once you sort that out, it’s time to start trading.
How to trade on BYDFi (Spot)
We will first go through the spot trading platform and then look at derivatives.
BYDFi has an advanced version of their spot trading platform, but we’re going to stick with the classic as it’s something most users are probably familiar with and comfortable with. This is what the interface looks like:
As you can see, this is pretty standard. On the left are the different cryptocurrencies available, in the middle is the chart and order types, and on the right is the order book.
BYDFi supports a range of different cryptocurrencies on its spot platform such as:
- Bitcoins (BTC)
- Ethereum (ETH)
- Ripple (XRP)
- Cardano (ADA)
- Polkadot (DOT) and many others.
There are two types of orders you can use:
- Limit order – use this if you want to open a position at a certain price. This order is placed in the order book and executed as soon as the price reaches it, as long as there is sufficient liquidity. Limit orders may be partially filled.
- Market Order – Use this order if you want to immediately open a position at the best available price from the order book.
How to open a position
For the purposes of this guide, we will open a position with a simple market order that looks like this:
As you can see in the image, we want to buy BTC for 50 USDT. As soon as we hit the Buy BTC button, the order will be executed and we will have 50 USDT worth of BTC. At current prices, this gave us exactly 0.0017 BTC.
How to close a position
If you want to close your position on the spot exchange, all you have to do is sell your cryptocurrencies (in this case – BTC). Again, we’ll use a simple market order for this:
As mentioned above, we bought 0.0017 BTC with 50 USDT, and if we want to close the position, we just need to sell everything. Note that you can also partially close it and sell only part of your shares.
That’s all you can do to trade on the spot platform. Using limit orders is also very simple as the only difference is that you enter a specific price and you have to hope that the market will reach and fill it.
Now let’s see how to use the derivatives platform.
How to trade on BYDFi (derivatives)
As you will notice when hovering over the derivatives button in the main navigation menu, you have several options:
USDT-M allows you to trade perpetual contracts denominated in USDT. COIN-M provides crypto-settled perpetual contracts, while lite contracts are simplified and leveraged tokens provide other possibilities. In this guide, we will focus on the USDT-M option.
First, it’s important to remember that a perpetual contract is a futures contract with no expiration or settlement date. This means you can buy and sell it whenever you want, which makes it quite versatile.
Trading derivatives also allows you to use leverage, which makes the whole thing much more risky. It carries a huge risk of losing capital, so only experienced users should use it. Using leverage above 5x is extremely risky and should be practiced with increased caution.
This is what the derivatives trading interface looks like:
As you can see, there are a few differences, especially on the right side of the screen where you can now use more order types and adjust the leverage.
For its BTC trading pair, BYDFi has the option to use as much as 150x leverage, but we will only use 5x leverage for the reasons explained above.
The way leverage works is that it increases the position size by the leverage factor. So 5x means you open a 5x bigger position using the same capital. For example, you can use $10 to open a $50 position.
However, the catch is that if the price starts to move against you in such a way that you lose your starting capital (also known as margin), you will be liquidated. So in the example above, if the price moves to your disadvantage and you lose $10, your entire position will be liquidated. When using 5x leverage, the price must move 20% against you. The higher the leverage, the lower the percentage and the riskier your trade is.
How to open a position
Following our previous example, we will use a simple market order to open a position:
As soon as we press the Long button, we will buy 100 USDT worth of BTC, but only 17.61 USDT as collateral due to the leverage we use.
Please note that with derivatives, you can also bet on the fall in price. To do this, you need to press the red Short button and your position will take profit if the price goes down.
How to close a position
Just below the chart you will find a tab where you can manage your positions:
Here you can monitor your size, margin mode, entry price, liquidation price, margin ratio as well as your PNL. To close a position, simply press the market button on the side or place a limit order with your desired exit price.
Stop Loss/Take Profit orders
In addition to the above, you can also use stop-loss or take-profit orders so you don’t have to manually close the position. To do this, press the stop limit button and select the type of order.
The Stop Limit itself looks like this:
Copy trade on BYDFi
Copy trading is a type of social trading where you automatically follow other people’s trades. While it can be profitable, it is important to keep a close eye on your positions and follow them closely as there are many factors to consider.
Anyway, this is what the top traders dashboard looks like:
Hence, if you want to copy someone, you have to press the Copy button and enter the specifications that best suit your trading style:
What are the fees at BYDFi
As with any other cryptocurrency exchange, there are fees to open and close positions.
According to the official site, spot transaction fees are calculated as follows:
For derivatives, fees vary depending on the platform you choose to use, so it is highly advisable to look at the site and make sure you keep this in mind.
Security: is BYDFi safe?
There are no reports of a BYDFi security breach. The website provides a number of different security measures that users can implement to make sure their account is protected.
Of course, there are always risks involved with holding funds on any centralized exchange, so you should only keep what you use to trade.
BYDF customer service
BYDFi has a live customer support service. To test this, we send a random query, and after requesting to speak to a team member, someone contacted us almost immediately.
The responses were very quick and adequate and the person helped us with an imaginary problem with expected adequacy.
All in all, BYDFi seems to be a comprehensive cryptocurrency exchange with a large set of tools that some competitors do not provide.
The exchange supports all major trading pairs and there is no shortage of choice.
- Lots of additional features for beginners and advanced traders
- A comprehensive and easy-to-use interface
- Very fast customer service
- There is no telephone customer service
- Liquidity is rather thin at the time of this review
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