Veteran players all know that in the crypto space, transaction fees are an unavoidable hurdle. No matter what, you have to pay a fee to the exchange for each trade, and sometimes it can even exceed your profits. After several transactions, the fees can even surpass your initial capital.
If we want to reduce transaction fees, we first need to understand how they are calculated. All exchanges are pretty much the same; aside from differing fee rates, everything else is similar: Position Value ✖ Fee Rate = Fee. Taking the leading exchange Binance as an example, its fee rate is 0.15% for market orders and 0.20% for limit orders. So if you have $10,000 in capital and use 10x leverage, your position value becomes $100,000. Multiplying by the fee rates, 100,000 × 0.0005 = $50 and 100,000 × 0.0002 = $20, so opening and closing a position would cost you $40 to $100. This is a complete trading process; it doesn't seem too bad, but this is just for one transaction. If we assume you make 10 trades a day for 22 days in a month, your fees would be $8,800 to $22,000. Looking at your capital, doesn't it seem that your fees equal your capital?
Now that you know the fees are so high, you might feel like avoiding crypto trading altogether. Don't be discouraged; there are ways to significantly reduce fees. Again, using the top exchange Binance as an example, let me share some methods with you.
First, holding platform tokens can offset part of the fees. Some platforms, like Binance, offer this feature.
Second, upgrading your VIP level means better benefits. Note: it is quite difficult to increase your VIP level as it requires a large trading volume.
Third, by entering an invitation code, you can activate a fee reduction service. If veteran players did not enter it before, they can still do so now if they meet certain conditions.
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