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August 20, 2018

How to trade on GDAX?

The basics of trading at GDAX

Revain is back with the new instalment in our article series for those who want to master the best cryptocurrency exchanges around.

As you will know if you’ve read our previous articles on the topic, which can all be found here, we have so far covered quite a few exchanges, and each one is split into three parts. You will find out the very essentials for GDAX trading here (registering, selling, etc), the more advanced strategies can be found in the article called “Advanced Trading at GDAX”, which will be out soon, and the “Trading at ...like a Pro” is, you guessed it, for those who want to become an irreproachable pro of exchanges.

You’ll be able to find the exchanges we’ve reviewed in the dashboard section, for example, here is Coinbase Pro (Gdax) and the guide to it will be in the blog’ beginners section, a part of which you’re reading now.

We strongly recommend that if you aim to master exchanges, you’re to read the basic part first, come back to the main page of the beginners' section, and find the Advanced article, and then the Pro one. Without reading all three your experience may be less than you want it to be, especially if we’re talking strategies, which we will be covering in the next chapters.

These articles come with the usual warning: use 2FA-authentication, consult a professional before you start trading with real money, read all the project documentation, and keep up with the latest events and reports from the field, which you will be able to find here.

Never leave home without protection

If you’re looking to make absolutely massive amounts on cryptocurrency, you’ve come to the right place. Crypto comes with its own risks, of course, as you will know by now. Although there are debates on whether the dollar is more stable than crypto, both are just essentially symbols of trust, which exist as long as they are accepted by other people.

Since 1971, if memory serves, when the gold standard was cancelled, there was no exchanging the dollar for gold as before, and essentially both crypto and dollars are backed up only by people and governments who are willing to exchange them for goods and services. The dollar has a reputation, and crypto is thought to be more volatile as a relative newcomer to the market.

This volatility is the reason some people witnessed with satisfaction a 150 000 000% increase in the value of Bitcoin (from 5 cents in 2009 to $15 000 in December). It also means crypto periodically swings wildly in price, which means there are no guarantees you will make profits.

The market, however, works to an extent in the same way as Forex (at some point beating New York Stock Exchange daily volume), so if you know EXACTLY what you’re doing you can more or less predict price movements.

Crypto, however, is a lot riskier than traditional funds, so we have to warn you that if ever it was important to be the expert, the time is now. Stay close, we will protect you, but you will still have to take responsibility for any steps you take.

Know the game well, don’t keep much money in exchanges, go for cold wallets, and if you are trading seriously and find cold wallets cumbersome, spread your finds in a variety of exchanges to minimize the risks. We think that’s it.

May the 4th be with you

GDAX (Global Digital Asset Exchange) is an exchange that allows you to trade funds, pretty much like any fiat exchange would, but with added complications like limitations on types of coins when it comes to withdrawals, presence or absence of fiat to crypto options, coin disintegration, and so on, so watch out and read carefully.

GDAX allows different levels of access to different countries (because that’s not racist at all), so if you’re from Canada, for example, you will have access to fewer currency pairs than if you’re from the US.

Security warning! This, and security of exchanges, in general, is what SEC wants you to bear in mind, and we also recommend you read the full text, which can be found here:

“The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not. Many platforms refer to themselves as "exchanges," which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange. Although some of these platforms claim to use strict standards to pick only high-quality digital assets to trade, the SEC does not review these standards or the digital assets that the platforms select, and the so-called standards should not be equated to the listing standards of national securities exchanges. Likewise, the SEC does not review the trading protocols used by these platforms, which determine how orders interact and execute, and access to a platform's trading services may not be the same for all users.”

GDAX actually takes this business seriously, which is impressive and provides a lengthy checklist on the site, which we recommend you follow closely.

Is GDAX Coinbase?

Coinbase, which we hope you are well aware of, is the father company behind Coinbase Pro, aka GDAX. Essentially Coinbase is a lot simpler and much more straightforward. Coinbase Pro, however, has a crypto wallet, a fiat-to-crypto option, convenient trading tools, a substantial market cap of $236 299 035 USD, a reasonable number of trading pairs, and there are maddening levels of security at this exchange, which we like. We’re told there are regular audits, funds insurance, and that nearly all the funds use cold storage, so if you take your security extremely seriously, GDAx is definitely the place for you.

Registration

The registration procedure is actually very simple and straightforward. Fill out in your information at pro.coinbase.com ===> Sign Up.

We have to point out GDAX pays particular attention to a strong password, which is a good sign.

Your password needs to be very complex, otherwise, it simply won’t be accepted.

Afterwards, you will find a letter in your inbox (don’t forget to check the Spam and Junk folders, etc), which you need to open and click to complete your registration.

Accept the user terms, put in your phone number and country, and wait for the confirmation SMS.

Note that you can skip the following section, which wants some more data like the source of income and street address, from you, but you will need to do your KYC later if you're going to trade seriously. For example, you will no be able to deposit and place orders until you fill in this section, and the note that states so on the left will annoy you until you do. You’ll be able to use your Coinbase account data if you have that already.

GDAX will require you to submit documentation, which is a good sign on one hand because they are taking your safety seriously, but there may be some long waiting times. Submit the required documentation according to all requirements and make sure it is valid and not blurry so you don’t have to begin again from scratch.

GDAX has a variety of verification procedures; for instance, you will need to go through another process for linking your bank account. If you’re not prepared for a lot of red tapes, consider other, less demanding exchanges, which you can find in this section.

Depositing

GDAX supports fiat and crypto deposits, so if you want to start straight away, go to pro.coinbase.com/trade, then Assets, then Deposit, and choose the Currency Type, at which point you will be granted an address.

Beware! Sending the wrong type of coin to the right address or the right type of coins to the wrong address means fail. In most instances, you will lose your assets forever, and sometimes the coins will just be rejected and returned. Double-check everything, go to the platform you’re sending funds from, and use the address to transfer the money. If you’re doing this for the first time with fiats, you’ll be transferred to Coinbase to set your bank account up.

Select the Deposit from Bank option to deposit USD into GDAX from a bank. Please make sure you include Reference Numbers if they are required - carefully. SEPA transfers will also require plenty of additional information, so make sure you follow the rules clearly if you’re depositing in Euros.

Use the ADD BANK link if you want to deposit dollars, which will be under BANK if you choose USD in Currency Types.

Withdrawing

Withdrawing is done in pretty much the same way:

  1. Pro.coinbase.com/trade.
  2. Assets.
  3. Withdrawal.
  4. Currency Type.
  5. Destination (input destination address for crypto or choose a bank if we’re talking USD or Euros).
  6. Select the amount.
  7. Select the Withdraw option.

Trading

GDAx, in addition to its instruments, supports a few interesting types of orders, which will we cover in more detail in the next instalment. The names, however, will intrigue you. Post Only, Fill or Kill, Good Til Cancelled - does that sound like a good spy movie stuff to you? Essentially trading involves going to https://pro.coinbase.com/trade/BCH-BTC, for example, and placing various orders, which you will see on the left.

Choose the Buy or Sell option, depending on your interests, and choose the type of order. We will cover that topic in the next chapter, but basically market orders will mean that you are buying or selling at best available price, limit order won’t be fulfilled until the conditions set by you (i.e. price) are met, and a stop order is buying or selling when a price hits the amount indicated by you.

Note the fee and click “Place an order”. Consult the Order Book on the right for guidance on prices and check out the price chart for price movements.

Finally

GDAX has not been in the business long (since May 2016, but in the short time it has been around it came to be one of the biggest exchanges around, which tells us it likely has a good future. That also means it is one of the more advanced exchanges around.

If you’re completely new and you don’t want to jump into the deep end, check out Kucoin, which remains our favorite no matter how many exchanges we view. Still, if you want to get advanced and are willing to spend time, GDAX with its beautiful API and a good reputation in certain circles (like Wall St Journal and New York Times) is just the right fit for you.

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