Understand the asset trading exchange provided by Coinbase themselves & save your fees on buying and selling allowed top 3 cryptocurrencies
As the popularity of Bitcoin and other cryptocurrencies is increasing either due to an astronomical price increase of Bitcoin over past few days or so many public figures making pro comments and few against it, this is making more and more people learn and invest in Bitcoin.
For those who’s been daunted by the huge price tag of Bitcoin are looking for a next Bitcoin or alternative currencies which could do a bull run in coming days, weeks or months. People are actually exploring other cryptocurrencies like Litecoin and Ethereum as they have proven to be active projects with scalability and transaction handling issues of Bitcoin handled in a better way.
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Note to Beginners
For all of the investment needs, Coinbase has been an easy medium for people living in more than 25 countries to easily add their bank account or a credit card to purchase Bitcoin, Litecoin or Ethereum using the funds deposited. If you are a beginner, follow this link to understand the step by step process of adding funds and making your first purchase. I would recommend beginners to follow instructions and make a first purchase on Coinbase.
I’m a Pro, bring it on!
However, after you get your funds on Coinbase, the % of fees that it levies of each of your purchase and sale would be catch your eye if you are trading instead of just holding. If you are buying and selling frequently on coinbase, this fee could actually be of a concern as it starts eating off your profits or even losses.
What if I say there’s a way to avoid this. Yes, this is by using Coinbase’s own exchange called Coinbase Pro (previsouly GDAX — Global Digital Assets Exchange), which allows you to trade different pairs as mentioned below
Things you need to know now
Signup & Account creation on Coinbase Pro
To sign up and create your account with Coinbase Pro, follow these steps:
- Go to pro.coinbase.com
- Select “Create Account”.
- Complete the sign up form, then click “Create an account”.
- Click the verification link sent to your email address.
- After verifying your email address, you will be asked to provide a phone number.
- Specify whether you would like to create an ‘Individual’ or ‘Institutional’ account. Depending on the account type selected, you will need to provide information about yourself or your institution.
- You have the option to link your bank account so you can fund your trading account with USD, GBP, or EUR. Alternately, you can skip this step and fund your account with BTC or ETH.
Creating account as a pre-existing customer of Coinbase
Coinbase Pro leverages Coinbase’s proven infrastructure to securely store funds and private information. This also simplifies the Coinbase Pro sign up process because you won’t need to provide us with information you’ve already given to Coinbase.
However, because Coinbase Pro has higher identity verification requirements, you may still asked to provide further information during account creation.
Steps to create a Coinbase Pro account
- Visit pro.coinbase.com
- Click on the “Sign Up” button.
- You will be taken to a Coinbase.com hosted page.
- Sign in using your Coinbase.com email address and password.
- a) If you have already verified a phone number with Coinbase, then you will be prompted to enter the Coinbase 2-Step Verification code.
b) If you have not yet verified a phone number, then you will be asked to enter one.
- You may be asked to verify your identity, depending on which verifications you have previously completed in your Coinbase account.
- If Coinbase Pro supports trading with your region’s local currency (currently USD, GBP, or EUR), then you will have the option to link your bank and fund your trading account. Alternately, you can skip this step and fund your account with BTC or ETH.
Understanding various sections on Coinbase Pro
Deposit & Withdraw
These buttons on left side of the Coinbase Pro exchange will help you with transferring USD funds or digital currencies between Coinbase and Coinbase Pro.
Clicking on Deposit button will bring the below screen. To deposit funds to Coinbase Pro,
- You can use the funds which you’ve deposited into your Coinbase.
- You can deposit form the Bank account linked to your Coinbase.
- You can do a wire transfer from your bank. As seen below, on the popup
Once you have USD deposited into account, it will show up beside USD balance on the left panel above “Deposit” and “Withdraw” buttons.
The next section you see is the order book. This section shows how many orders are present for each price point.
Red ones show the sell orders for different price points.
Green ones show the buy orders for different prices.
USD spread in the middle shows the difference between the lowest sell order and the highest buy order. This generally shows the demand and volume for certain digital currency on a certain exchange. If the traded volume is high and more people are buying and selling, this spread will be very minimal. So this serves as an indicator for investors to decide whether an exchange is good or not, because not many people will trade on exchanges with less volume/demand as their orders wont get filled as expected.
Next section and widest of all is the charts section. Here you have 2 kinds of charts
- Price Chart
- Depth Chart
Price chart helps you understand the pattern of the selected trading pair over the time with an option to select the intervals like 1m, 5m, 15m, 1hr, 6hr and 1day. More on this later.
Depth Chart is another interesting chart, which shows you the supply and demand of selected trading digital currency against the trading currency. Learn more about understanding depth charts here
Below the charts, you have an empty space with two tabs Orders and Fills. When you place an order, it shows up here and time elapsed since you’ve placed that order. Once the price reaches the price you’ve place — it gets executed, which means you will be allocated the amount of digital currency according to the order placed. This is called order being filled, then it moves to the filled tab.
Next section is the Trade History. Trade history shows the list of orders getting executed currently.
Good job on finishing the basics. Proceed for next article to know more about
- Differences between Market, Limit and Stop-Loss orders.
- How to place Limit buys and Sells.
- Understand what’s Maker and Taker in trading jargon.
- How to avoid fees by placing Limit orders and being a Maker.
An ultimate guide on understanding trading BTC, ETH, LTC with USD, EUR and GBP with ZERO fees on Coinbase Pro.hackernoon.com
While you learn to use tools for trading, you also need to be responsible and pay taxes on cryptocurrency trading. Here’s an article which tries to reduce confusion and provide clarifications on taxes on gains from crypto trading.