Co-founder of BearTax
As the popularity of Bitcoin and other cryptocurrencies is increasing either due to 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 to learn and invest in Bitcoin.
For those who’s been daunted by 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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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 first purchase on Coinbase.
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 GDAX (Global Digital Assets Exchange), which allows you to trade different pairs as mentioned below
To sign up and create your account with GDAX, follow these steps:
GDAX leverages Coinbase’s proven infrastructure to securely store funds and private information. This also simplifies the GDAX sign up process because you won’t need to provide us with information you’ve already given to Coinbase.
However, because GDAX has higher identity verification requirements, you may still asked to provide further information during account creation.
Steps to create a GDAX account
These buttons on left side of the GDAX exchange will help you with transferring USD funds or digital currencies between Coinbase and GDAX.
Clicking on Deposit button will bring the below screen. To deposit funds to GDAX,
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 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
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.