...if you're a newcomer to the cryptoworld (refer to my tutorial here: First Crypto Investment with Coinbase). The user interface is simple and easy to use.
Flourish with GDAX
Once you gain experience with Coinbase, it's time to move onto GDAX - the angel of the crypto exchanges. Why? Because GDAX is designed for advanced traders that want to place market, limit, stop, and margin orders. (Coinbase is simplified where you can only place market orders.) The best benefit of GDAX is the ability to pay ZERO exchange and transfer fees. Here's how:
Definitions for the below content: An exchange or trade is when you buy or sell currency. A transfer is when you want to send an amount of currency from one account to another account/exchange platform: Transfer Crypto from GDAX to Binance.
1. Set up an account on GDAX
Use your same email and password as your Coinbase account.
2. Fund your account
Background: Both Coinbase and GDAX are exchange platforms owned by the same company. Therefore, if you linked a bank to your Coinbase account, the same account will be linked to GDAX. Also, you can transfer funds instantly and for free: Transferring Funds from Coinbase to GDAX. To deposit money, click on the 'deposit' button and select the source and amount. Depending on how you fund your account, your money may not show up for a few days.
3. ZERO Exchange Fees
Remember the fees from my Coinbase post? The fees ranged from 9.9% to 1.495% (This is why some people call Coinbase a scam). However, GDAX has more features that aren't user friendly and may scare you away. So let me help you! Below is a screenshot of the GDAX exchange interface and I've boxed and labeled (A-G) each feature. The descriptions below tie to the labeled boxes.
Descriptions
A - Sell orders are in red. This is where sellers are selling a specific amount of their coins with an asking price.
B - Buy orders are in green. This is where buyers place buy orders for a specific number of coins at a specific price.
When an seller's asking price matches a buyer's asking price, then the order is filled up to the amount of coins at the seller's asking price. For example, if there are 5 coins for sale at $1 and a buyer wants to buy 7 coins at $1, then 5 coins are filled in the order; the buyer needs to wait for 2 more coins to be up for sale at $1.
C - Chart of the filled orders. You can change the time scale and chart type. Use this to determine if the value it trending up or down.
D - Visual chart of the buy orders (green) and sell orders (red). Use this to determine which side has the largest order size near the mid-market price and try to predict where the value will trend towards. For example, if there is a very large market size for buy orders near the mid-market price, that means other buyers will need to outbid that price if they want to obtain that coin. Therefore, the market price may trend upwards.
E - Open orders are your buy or sell orders that have not been filled yet. If your buy order price is too low or sell order price is too high, you can cancel your order and submit a new order.
F - Filled orders are your orders that have been executed and you will have the exchanged currency in your account.
G - Trade history displays the orders that have been filled realtime. If you are seeing red (sell orders) non-stop, then the price should be trending downwards.
Please take the time to understand what all of this means and never invest money that you can't afford to lose. Once you're ready to submit an order, review the GDAX fees: GDAX Fees. If you submit market orders, you will be a 'taker' and your transaction fee will be between 0.1% to 0.3%. If you place a limit order, you will be a 'maker' and your transaction fee is 0%!
*As an intermediate trader tip, you should be able to quickly execute your limit order if your price is near the mid-market price. You can quickly set your order's price by clicking on an order in boxes A or B (image above). By clicking on an order, your order will automatically copy that order's price.
If this doesn't excite you, let me give you an example of how much money you will save with GDAX. If you exchange $500 USD 10 times in GDAX as a 'maker', your total transaction fees is $0. Whereas, the same 10 exchanges on Coinbase will have an average exchange fee of about 3%. (To have easier numbers, let's assume your value increased about 3% between each exchange so that you always exchanged with a value of $500.) Each Coinbase exchange will cost you $15 ($500 * 0.03 = $15.) Therefore, 10 trades on Coinbase will cost you $150!! ($15 * 10 = $150) Just trading the $500 on GDAX would keep $150 more in your account!
4. Bonus: ZERO Transfer Fees
When you make a withdraw from Coinbase (send coins to another wallet/exchange platform), there is a transfer fee: Coinbase Fees. Below is a screenshot when I sent Bitcoin (BTC) from Coinbase to BitGrail (another exchange platform). The transaction fee was about 2.19% (0.00120487/0.05507128 * 100 = 2.19%)
- In BitGrail, I recieved 0.05386641BTC (0.05507128 - 0.00120487 fee = 0.05386641BTC) -
- Image showing 0.03BTC was transferred out of GDAX on 12/13/2017 -
- Image showing that 0.03BTC was deposited in Bittrex without any fees (if there were transaction fees, the deposited amount would be less than 0.03BTC) -
You should be proud of yourself! You know how to exchange for the 'big 3' coins (BTC, LTC, and ETH) and transfer them with ZERO fees! Personally, having no fees is just the tip of the iceberg of how crypto will improve our world.
Using GDAX's features and continuing your crypto research will allow you to become a successful investor. Learn how to properly use limit and stop orders to maximize your gains. You can save a lot of money by placing limit orders and transferring currency on GDAX while dodging the Coinbase fees.
I hope this helps your a lot! Come and join the picnic to learn more!
**This is not financial or investment advice. Be sure to conduct additional research and never invest with money you can't afford to lose.**
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