Centralized exchanges (CEXs)

Centralized Exchanges (CEXs): A Beginner's Guide

Welcome to the world of cryptocurrency! If you’re looking to buy, sell, or trade digital currencies like Bitcoin or Ethereum, you’ll likely use a Centralized Exchange, or CEX. This guide will walk you through everything you need to know to get started.

What is a Centralized Exchange?

Think of a CEX like a traditional stock exchange, but for crypto. It’s a business that acts as an intermediary between buyers and sellers. They hold your funds while you decide what to do with them. They provide a platform where you can trade different cryptocurrencies for each other, or for traditional currencies like US dollars or Euros.

Unlike a decentralized exchange (DEX), a CEX is run by a company. This means they have control over your funds and the trading process. This offers convenience but also introduces risk (more on that later).

How Do CEXs Work?

Here’s a simple breakdown:

1. **Account Creation:** You sign up for an account on the exchange, providing personal information (usually including identity verification - see Know Your Customer (KYC)). 2. **Deposit Funds:** You send money (fiat currency like USD or crypto) to your exchange account. 3. **Trading:** You use the exchange's platform to buy or sell cryptocurrencies. You’ll place an order specifying what you want to buy/sell and at what price. 4. **Withdrawal:** When you’re ready, you can withdraw your crypto or fiat currency back to your personal wallet or bank account.

Popular CEXs

There are many CEXs available. Here are a few of the most popular:

Binance: Register now One of the largest exchanges, offering a wide variety of cryptocurrencies and trading features.
Bybit: Start trading Known for its derivatives trading and user-friendly interface.
BingX: Join BingX A growing exchange with social trading features.
BitMEX: BitMEX Popular for leveraged trading.
Kraken: A well-established exchange known for its security.
Coinbase: A beginner-friendly exchange, particularly popular in the US.
KuCoin: Offers a wide selection of altcoins (smaller cryptocurrencies).
Bybit: Open account Another popular option with a good reputation.

CEX Fees

Exchanges charge fees for their services. These fees can vary significantly. Common fees include:

**Trading Fees:** Charged each time you buy or sell crypto. Typically a percentage of the trade value.
**Deposit Fees:** Some exchanges charge a fee to deposit funds.
**Withdrawal Fees:** Almost all exchanges charge a fee to withdraw funds. These can vary depending on the cryptocurrency and network congestion.

Here's a comparison of fees (as of late 2023 – *fees are subject to change!*):

Exchange	Trading Fee (Maker/Taker)	Deposit Fee	Withdrawal Fee (BTC Example)
Binance	0.10%/0.10%	Generally Free	~0.0005 BTC
Coinbase	0.60%/0.60%	Varies (can be high)	~0.0005 BTC
Bybit	0.075%/0.075%	Generally Free	~0.0005 BTC

Maker* refers to adding liquidity to the order book, *Taker* refers to removing liquidity.

Security Considerations

Using a CEX involves trusting them with your funds. While most CEXs have security measures in place (like two-factor authentication – see Two-Factor Authentication), they are still potential targets for hackers.

Here are some security tips:

**Enable 2FA:** This adds an extra layer of security to your account.
**Use a Strong Password:** And don't reuse it anywhere else.
**Be Wary of Phishing:** Scammers often try to steal your login credentials.
**Withdraw to a Personal Wallet:** For long-term storage, consider moving your crypto to a crypto wallet you control.
**Understand Insurance:** Some exchanges offer insurance on your funds, but it's important to understand the terms and limitations.

Getting Started: A Step-by-Step Guide (Using Binance as an Example)

1. **Sign Up:** Go to Register now and create an account. 2. **KYC Verification:** Complete the identity verification process. This usually involves submitting a photo of your ID and proof of address. 3. **Deposit Funds:** Click on "Wallet" then "Fiat and Spot." Choose your deposit method (bank transfer, credit/debit card, or crypto). 4. **Trade:** Click on "Trade" and select the trading pair you want to use (e.g., BTC/USD). Place your order. You can use market orders for instant execution or limit orders to specify a price. 5. **Withdraw Funds:** Once you’ve made a profit (or want to move your funds), click on "Wallet" then "Withdraw." Enter the recipient address and amount.

Understanding Order Types

**Market Order:** Buys or sells crypto at the best available current price. Fast, but price isn’t guaranteed.
**Limit Order:** Allows you to set a specific price at which you want to buy or sell. Order is only filled if the price reaches your limit.
**Stop-Limit Order:** Similar to a limit order, but triggered when a specific price (the "stop price") is reached.
**Stop-Market Order:** Similar to a stop-limit order, but executes a market order when the stop price is reached.

Advanced Trading Concepts

Once you’re comfortable with the basics, you can explore more advanced concepts:

Technical Analysis: Using charts and indicators to predict price movements.
Fundamental Analysis: Evaluating the underlying value of a cryptocurrency.
Trading Volume: Understanding how much of a cryptocurrency is being traded.
Margin Trading: Borrowing funds to increase your trading position (high risk!).
Futures Trading: Contracts to buy or sell a cryptocurrency at a predetermined price on a future date.
Scalping: Making many small profits from small price changes.
Day Trading: Buying and selling within the same day.
Swing Trading: Holding positions for a few days or weeks.
Dollar-Cost Averaging: Investing a fixed amount of money at regular intervals.
Risk Management: Protecting your capital from losses.

CEXs vs DEXs

Feature	Centralized Exchange (CEX)	Decentralized Exchange (DEX)
Control of Funds	Exchange holds funds	You control your funds
KYC Required	Usually required	Often not required
Speed	Generally faster	Can be slower due to network congestion
Fees	Can vary, often lower for simple trades	Can be higher, especially with gas fees
Security	Relies on exchange security	Relies on your own security practices

For more information, see Decentralized Exchanges.

Resources

Recommended Crypto Exchanges

Exchange	Features	Sign Up
Binance	Largest exchange, 500+ coins	Sign Up - Register Now - CashBack 10% SPOT and Futures
BingX Futures	Copy trading	Join BingX - A lot of bonuses for registration on this exchange

Start Trading Now

Register on Binance (Recommended for beginners)
Try Bybit (For futures trading)

Learn More

Join our Telegram community: @Crypto_futurestrading

⚠️ *Disclaimer: Cryptocurrency trading involves risk. Only invest what you can afford to lose.* ⚠️

Centralized exchanges (CEXs)

Contents