GDAX: How To Trade Using Coinbase’s Global Digital Asset Exchange

The Global Digital Asset Exchange (GDAX), one of the most famous Bitcoin and cryptocurrency trading exchanges in the world, launched by the Coinbase team in May of 2016, aimed at more advanced users and professional traders.

What Is GDAX?

Global Digital Asset Exchange, abbreviated to GDAX, is one of the world’s most popular places for the exchange of cryptocurrencies. It is run by the same company that owns Coinbase headquartered in San Francisco. As a regulated US-based exchange, GDAX is insured and backed by some of the biggest investors in the industry like the New York Stock Exchange (NYSE), Andreessen Horowitz, and Union Square Ventures.

Over the years, GDAX has hailed to one of the biggest cryptocurrency exchanges due to its extreme liquidity. It offers advanced trading features, competitive fees, and varieties of deposit options. The exchange allows traders to leverage up to 500:1. Most importantly, GDAX offers FDIC insurance to customers, which means, in the case of loss of funds by the exchange, a customer might be entitled to up to $250,000 in remuneration depending on the sum of the customer’s assets.

Features Of GDAX

The following are the most common features of the exchange:

Margin Trading

One of the remarkable features of the exchange compared to other exchanges, is its margin trading options. Once you are set to trade margin through GDAX, the amount of leverage you can access depends on which currency pair you want to trade. GDAX bids margin trading with leverage up to 3x on BTC/USD and ETH/USD pairs, up to a limit of $10,000, or 2x for BTC/EUR pair up to 3,000 EUR, and up to $500 for LTC/USD pair.

If you are willing to use on-loan money to trade cryptocurrencies through GDAX, you have to enable margin trading at the top of the margin trading panel. For BTC/USD, you can leverage as high as 3x. Meaning, if the combined value of your BTC and USD balances sums to a total of $3,000, you can purchase or sell $9,000 worth of BTC/USD.

Fluent Design

The ease-of-use feature offered by GDAX makes it one of the most sort-after exchange. GDAX presents user with an instinctive UI, with instantaneous order books, monitoring tools, trade history, and a simple order processing tools that enables every customer to trade easily, regardless of having previous experience or not. The interface is well-organized, so that traders will not have any difficulty with finding what is needed, whether it is trading history, tools, or help.

API Support

Like some other exchanges, GDAX offers a Websocket feed that lets traders easily gain access to real-time market data. The trading API also allows for the development of secure trading bots.

GDAX’s abundant trading API offers an effective way for developers to build digital asset trading bots/applications, to track the market, view trading history, monitor open orders, and more, so as to offer related functionalities of the exchange. The followings outline exceptional properties of the GDAX’s API

• A customizable, WebSocket-synced Order Book implementation
• API clients with convenient methods for every API endpoint
• Preoccupied interfaces that allows you to worry-less about HMAC signing or JSON formatting.

Security

GDAX uses PGP encryption to secure customers transaction data. Also, 98% of the customers’ funds are locked in cold storage using multi-signature keys and encryptions.

Fee Structure

There are no fees for making deposits and withdrawals from GDAX account. Only bank fees apply in the case of Wire transfers. GDAX offers 0% maker fees and taker fees as low as 0.1%. There’s also a discount of 0.01 percent for the takers at the end of each day. According to the exchange, the below table summarizes fee structure of the percentage of a 30-day volume.

Multiple Currency Pairs

Currently, the exchange supports these FIAT currencies:

• USD
• EUR
• GBP

Also, when it comes to digital currencies, the three matching currencies available are:

• Bitcoin (BTC)
• Ether (ETH)
• Litecoin (LTC)

GDAX offers a wide range of fiat and cryptocurrency pairs, including BTC/USD, ETH/USD, LTC/EUR, LTC/USD, ETH/BTC, LTC/BTC, BTC/GBP, and BTC/EUR, among others.

There are no limits when it comes to trading or deposits. However, there is a limit of 50,000 US dollars per week for withdrawals, but it’s not affected by the verification. Depending on the country, available trading pairs can vary. Some of the most popular regions available are:

• US – BTC/USD, ETH/USD, ETH/BTC, LTC/USD, LTC/BTC
• Canada – ETH/BTC, LTC/BTC
• Europe – BTC/EUR, ETH/BTC, LTC/BTC
• The United Kingdom – BTC/GBP, ETH/BTC, LTC/BTC
• Australia – ETH/BTC, LTC/BTC
• Singapore – ETH/BTC, LTC/BTC

The full guide can be found on GDAX support page here.

Support

GDAX has a very extensive FAQ page and also offers ticket submission and email support.  According to the reviews from majority of the users, the support team usually respond to users’ need within 48 hours.

Getting Started With GDAX

Account Registration

To sign up and create your account with GDAX, follow these steps:

• Simply navigate to gdax.com from your web browser.

Note: As a security measure, make sure the Green padlock symbol is shown in your browser address bar, and the protocol is HTTPS, not just HTTP.

Select “Create Account“.

• Complete the sign-up form, then click the “Create an account” button
  

• Check your inbox in the mail you provided, and 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'  Depending on the account type selected, you will need to provide information about yourself or your institution.

Account Verification

Users who are already registered on Coinbase don’t have to create an account from scratch and can log in with their Coinbase credentials.

However, GDAX requires two level identity verification for new users. The verification is necessary, and users are not allowed to place deposits or trade before the verification process is completed. So, depending on the location, GDAX has an option for individuals and institutions, whereby you have to fill in the details during registration. The rest of the steps mainly involve verifying your identity and residence, in an effort to increase compliance with the available rules.

The following are the requirements for US users alone:

• Photo of a state ID or driver’s license
• The residential address
• Social Security number (SSN)

For users in the UK:

• A photo of an ID card, driver’s license or Passport.
• The answer to a couple of identity questions

For other users (Singapore, Australia, Canada and European countries):

• A photo of an ID card, driver’s license or Passport.
• Another photo of a different ID document.

Funding your GDAX account

GDAX currently accepts Bank transfers. Credit/Debit Card deposits can also be made via Coinbase (since Coinbase users also have a free access to a GDAX account). However, there is no information on the minimum initial deposit on GDAX.

Note that according to the GDAX support, Bank Account deposits made to GDAX are sent via the ACH bank transfer system, which typically takes 3-5 business days (which can be as many as 7-10 calendar days, depending on the timing of weekends and other bank holidays) to complete after initiating a purchase.

There are four basic options for making a deposit, which are:

• Bank Account
• Bank Wire
• Coinbase Account
• BTC/ETH/BCC/LTC Address.

USING BANK ACCOUNT

• Select the bank account from the “Source” field and enter the amount you want to deposit
• Click the “Deposit funds” button

USING BANK WIRE

• Give the information they provide to your bank to have a wire transfer  Wire transfers are good if you need to send more than your weekly limit.

USING COINBASE ACCOUNT

• Select the Coinbasewallet you want to transfer from and enter an amount.  Note that since BTC was selected in step 2 that it will only show my BTC and USD  Note that transfer is instant and free between Coinbase and GDAX!

• Click the “Deposit Funds” button

USING CRYPTOCURRENCY ADDRESS (In this example, we are considering BTC)

• Go to Gdax.com/trade
• Choose a trading pair with the currency you wish to deposit from the “select product” menu.

• If you want to deposit ETH, select ETH/USD or ETH/BTC.

• ​Select the Deposit button at the top left.
• Select the “BTC address”, “BCH address”, “ETH address”, or “LTC address” tab.

• Copy the account address shown.
• Open the external wallet you would like to deposit from, and send to the GDAX account address provided.

Trading Digital Currencies On GDAX

Now that you have your fund on the exchange, you’d like to buy BTC (or any digital currency as the case may be) on GDAX.

There are three basic ways to buy/sell a digital asset on GDAX:

1. Market Orders: 0.25% fee

This is the easiest method of executing orders on GDAX, and very similar to how orders are filled on Coinbase. A buy order can be placed at the current market price and filled immediately. This option allows traders to pay the market price as it changes. All you need do is to set the amount you want to trade, and you place your order.

2. Limit Orders: 0% — 0.10% fee

Limit orders are the default way to buy or sell cryptocurrencies on all exchanges. Limit orders allows traders to place an order onto the order books at a specific market price you are willing to trade your assets. For example, if ETH is at $560 and you want to buy your in at $540 or lower. You should put in a limit order. If the market moves to the specified price, it becomes filled immediately. However, If the market doesn’t move to your limit level, the order won’t be filled.

A limit order is 0% fees if you are in the “taker” position. If it executes, you will pay a 0.10% fee as GDAX recognizes you as a “maker.”

3. Stop Orders: 0% — 0.10% fee

A stop order is also known as a “stop loss” order, which allows you to minimize risk and stop your loss. This is a strategy that requires some charting or technical analysis skills. For example, if the market for BTC is at $8000 and you want to buy at $7600 or lower.

Meaning, in this case, $7600 is the starting price you’re willing to pay. If the market hits $7600, your stop order will trigger a buy at the market price until your specified amount of BTC is purchased.

4. The stop-limit buy order

This type order is the combination of the stop and limit buy to create a bracket that you’re comfortable buying in. The stop will specify the price trigger you want to start buying at. This will execute as a market buy. However, unlike the simpler stop order, the limit comes in to create a resistance of how high you’re willing to go. This alleviates your risk in case the market price shifts outside of the threshold you’re willing to trade. As an example, a stop-limit combination of the stop at $320 and the limit at $325 would allow you to execute a buy on your preferred currency only within the range. The advantage of this is that you get a very exact threshold for your price. However, your order may not be filled if the market does not hit your stop price.

Withdrawal From Your GDAX Account

• Navigate to the GDAX website and log in
• Choose the product from the drop-down list for the cryptocurrency you want to withdraw.  As at the time of this writing, GDAX only accepts Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCC), and LiteCoin (LTC).  In this example, we are choosing the BTC/USD pair because we want to withdraw the BTC.

• Click the “Withdraw” button

GDAX Withdrawal Methods

As described for deposit your funds on the exchange, there are also four available options for withdrawal:

1. Bank Account
2. Bank Wire
3. Coinbase Account
4. BTC/ETH/BCC/LTC Address.

Bank Account

• Enter the amount you want to withdraw, choose the bank account with which you want to receive your fund, and enter any required security information by GDAX.

• Click the “Withdraw funds” button

Bank Wire

• Contact your bank to get the information needed to have money wired to your account.  If you do not have any wire informationon Coinbase it will prompt you to add some as shown below.

CoinBase Account

• Select the Coinbase wallet you want to transfer to and enter an amount.  Note that since a BTCproduct was chosen in step 2, it will only show BTC and USD   The something applies to ETH and other digital assets.

• Click the “Withdraw Funds” button.

An External BTC Wallet Address

• Fill in the “Amount” and “Destination” fields. Destination will be the Bitcoin wallet you are sending funds to, and input any security information requested and then click the “Withdraw funds” button.