First & foremost, thank you for using the.pylot – Your fully automatic, one minute setup, cryptocurrency trading engine in the cloud. If you are not an active user yet, please join our Telegram group or sign up and try it for free.
Today, we would like to explain & demonstrate to you, why it is absolutely crucial to pay your fees in BNB (Binance Coin) on the cryptocurrency exchange Binance.com.
Trading Fees vs. Actual Fees
The stated trading fees (default tier) for maker & taker trades are only 0.1%. This is low in comparison to other exchanges, therefore you might think that the discount of 25% (reducing the fees per trade to 0.075%) might not make a huge difference overall, which is generally true.
The real problem are the minimum lot sizes for buy & sell trades that Binance enforces, which often are a full coin. Let’s look at an example trade to clarify what we mean:
Our Buy Trade: 10 ARDR for a total cost of 0.01 ETH (ARDR / ETH: 0.001)
The fee for this trade, not paying them in BNB, would be 0.010 ARDR, (0.1%) and would leave us with 9.99 ARDR.
As selling or buying ARDR requires a lot size of 1, without any decimals, we can now only sell 9 ARDR, even though we have ALMOST 10. That is an automatic loss of 10% of the value.
(Note: Yes, we know that you can convert the 0.99 ARDR into BNB as dust, but this doesn’t change the actual outcome of trades. We will talk about this below.)
Now let’s assume that ARDR has a 10% gain in value against ETH and the.pylot is selling it at this decent profit.
Our Sell Trade: 9 ARDR for a total return of 0.0099 ETH (ARDR / ETH: 0.0011)
( – 0.1% fees in ETH)
And there it is! Even though the.pylot would have made a cool 10% profit for you, effectively you have less ETH than before and the trade closed with an actual loss of 1%. Of course this is an extreme example, but especially with smaller total trading budgets, this can affect your overall profits tremendously.
The advantage of using BNB
By activating to pay trading fees in BNB, not only would you have saved 25%, but as well there would be no reduction in the balance of the coin that you’ve bought, because it’s independently settled in BNB. That means the same trade, while paying fees in BNB would have been:
Our Sell Trade: 10 ARDR for a total return of 0.011 ETH (ARDR / ETH: 0.0011)
( – 0.075% fees settled in BNB, as well for the initial buy trade)
How to activate to pay fees in BNB?
To activate the settlement of fees in BNB, you will need to open your account overview here and switch “Using BNB to pay for fees (25% discount)” to “ON”.
Converting remaining small balances (“dust”) to BNB
Another way of getting those losses back is to convert your remaining micro-balances to BNB, which is a fairly new feature. Especially if you previously didn’t use BNB to pay your fees, you might have a lot of different small coins left as dust in your account, unable to actually trade those.
Furthermore, this will give you the necessary balance in BNB to pay fees for future trades, without needing to specifically buy & hold BNB (even though BNB seems to be a great long-term investment with steady gains in value).
To convert your small balances to BNB, you will need to go to your account balances under Funds > Balances, where you will find a button that says “Convert to BNB”.
In the next screen, you can select all the coins that you would want to convert to BNB. As Binance shows all coins with a value below 0.001 BTC, make sure that you really only choose the remaining balances of previous trades.
Please be aware, that while this might recover most of your losses, it will not turn the actual trades into a positive return. That means that your statistics & results that you have with the.pylot might show a negative return, even though it actually traded for a profit. It’s also possible that trades show as profitable, but are actually a net loss when it comes to the base currency it was traded in, as shown profits are based on the buy & sell rate, not on the base currency balance. We will add a feature to see the base currency balance-based results in a future update of the.pylot, as it is actually not a bug but technically correct.
Thank you for taking the time to read through this trading advice. We would like to emphasize once more how important it is to use BNB to pay your trading fees for making profitable trades on Binance.com with the.pylot.
Learn more about the.pylot & feel free to ask any questions in our Telegram group.
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