Coinbase Pro (GDAX) Ultimate Trading Guide

Coinbase Pro Ultimate Trading Guide

Coinbase Pro (GDAX) vs Coinbase

Coinbase offers two options when wishing to trade cryptocurrencies, through Coinbase or Coinbase Pro. Coinbase Pro (GDAX) offers a number of advanced functions not available on Coinbase and allows you to trade for much cheaper fees. Getting started with Coinbase Pro can be intimidating especially if you are a beginner, this ultimate Coinbase Pro guide will allow you to trade on the exchange with confidence.  We will be running through all the common queries from signing up, buying and selling to understanding the charts and interface.

Whilst Coinbase Pro does offer lower fees and a more powerful trading platform a word of warning to total beginners, there is more to understand with Coinbase Pro and it is easier to make mistakes compared to Coinbase.  So if you have never traded before we would suggest getting a number of trades under your belt on Coinbase first to build up confidence and experience. To understand the full set of differences between the platforms checkout Coinbase vs Coinbase Pro.

We are not financial advisers and this should not be taken as financial advice, make sure you understand all the risks before getting involved in Cryptocurrency.

GDAX becomes Coinbase Pro

Coinbase Pro is the new name for GDAX (Global Digital Asset Exchange), the rebrand was announced in May 2018.  Currently both the GDAX and Coinbase Pro user interfaces are available, this will be the case until the end of June 2018 when GDAX will cease to exist. If you are familiar with GDAX you will find the transition very easy there has only been minor tweaks to the UI.

Registering with Coinbase Pro

If you are an existing Coinbase user,  good news since when you register for a Coinbase account you automatically get a Coinbase Pro account.  Simply head over to Coinbase Pro and log on with the same username and password you would use for Coinbase.  If you have two factor authentication enabled for Coinbase you will need this code.  Depending on the identification you used to register for Coinbase you may be asked for additional identification,  you should then get immediate access to your account.

If you don’t have a Coinbase account you will need to register here first.  If you use this link you will get $10 worth of free Bitcoin when you buy your first $100 of Bitcoin.  When you have completed the initial information on the sign up link you will be prompted to provide some ID for verification. Which can be an ID card, passport or drivers licence.  Check out the Coinbase website for a full list of accepted forms of identification.  The sign up process is simple and only takes about 5 minutes. Once you are registered it would be sensible to enable two factor authentication in the interest of making your account more secure.

Logging into Coinbase Pro

To sign into Coinbase Pro simply head to Coinbase Pro and click sign in, remember the username / password and two factor authentication method will all be the same as your Coinbase account.

Coinbase Pro logon screen

Coinbase Pro Currencies

The cryptocurrencies currently available for trading are:

  • Bitcoin (BTC)
  • Bitcoin Cash (BCH)
  • Ethereum (ETH)
  • Litecoin (LTC)

Understanding the layout

Traders looking at lots of complicated screens

When you first login you will be greeted by the trading screen below.  If you don’t see this screen click on Trade near the top left of your screen. When you first see the screen you’re either going to have sweaty palms and think what the hell does all this mean or you are going to feel like the Wolf of Wall Street and be wanting to shout buy, sell and feel like putting on red braces.  Either way we got you in this Coinbase Pro complete beginners guide.

The Coinbase Pro main trading screen

First let’s take a quick look around the screen to get familiar with the main interface,  then we will dive into each section in more detail.

Coinbase Pro Navigation Bar

The top of the page holds key pricing data and the anchor for the main menu

Coinbase Pro Navigation Bar

  • Trading pairs can be selected by clicking on the top left dropdown labelled Select Market.  This allows you to choose from cryptocurrencies Bitcoin, Litecoin, Bitcoin Cash, Ethereum and the Fiat currency you wish to buy it in for example Euros or Dollars.
  • Based on the currency pair you have chosen you will see the last traded price, change in price over 24 hours and the volume of trades.

Order Form

The main work area of Coinbase Pro.  Used to buy and sell cryptocurrencies plus move money into and out of your account

Order form on main GDAX screen

  • Deposit – here you can deposit funds into your account
  • Withdraw – this is used to move funds out of your account
  • Buy –  this is where you can buy one of the four available cryptocurrencies; Bitcoin, Litecoin, Bitcoin Cash, Ethereum
  • Sell  –  this is used to sell your cryptocurrencies.  Like a buy this can be a market or limit sell

Order Book

Coinbase Pro main screen highlighting the order book price chart and trade history

This area shows the open buy and sell orders on the exchange

  • Red numbers – Represent the sell orders
  • Green numbers –  represent the buy orders

Price Chart

Graphical representation of recent movements in the market

  • Price chart – Shows for change in price over a period of time
  • Depth chart –  shows the number of buyers and sellers at various prices

Trade History

Trade history shows orders that have recently executed. Again similar to the rest of the interface buy trades are shown in green and sells in red.

Now let’s look at each area in turn to get a greater understanding of how to use Coinbase Pro

Trading Pairs (Select Market)

The first thing you will need to do whether you wish to buy or sell is choose the trading pair. This essentially allows you to choose the cryptocurrency you wish to purchase and which fiat currency you wish to use to pay for the trade.  Fiat currency is your traditional government backed currency such as the US dollars. You can also use Bitcoin to fund the purchases.

To choose your trading pair click on select market , you can then narrow down the available pairs by highlighting in blue the currency you wish to trade with.  In the below screenshot we have chosen to see the trading pairs available for Euros.

Cryptocurrency and fiat Trading Pairs available in GDAX now Coinbase Pro

The cyptocurrencies available for purchase on Coinbase Pro are currently Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH) and Ethereum (ETH).  If you wish to buy other cryptocurrencies not listed here you would need to use an exchange such as Binance. The trading pairs available will depend on your region and you will generally want to select your local currency.  For example in the USA you would want to select Dollars and in Europe you would wish to select Euros. Let’s look at some example pairings.

US Trading Pairs

  • BTC /USD – Bitcoin / US dollars, ie buy Bitcoin with US dollars
  • BCH /USD – Bitcoin cash / US dollars
  • ETH /USD – Ethereum / US dollars
  • LTC /USD – Litecoin / US dollars

European Trading Pairs

  • BTC /EUR – Bitcoin / Euros, ie buy Bitcoin with Euros
  • BCH /EUR – Bitcoin cash / Euros
  • ETH /EUR – Ethereum / Euros
  • LTC /EUR- Litecoin / Euros

Bitcoin can also be used to fund the purchase of other cryptocurrencies. So for example you could have a pair of LTC / BTC which would be the purchase of Litecoin using Bitcoin.

So choose the pairing you want and let’s proceed to the next stage to deposit funds.

Depositing Funds into Coinbase Pro

On the left hand side of your trading screen you will see the buttons to deposit and withdraw funds.

The section of the GDAX trading screen which allows deposits and withdrawals

When you click on deposit funds you will see the screen below which allows you to choose the currency you wish to deposit,

Currency options available when depositing funds

Currently you can only purchase cryptocurencies using either fiat currency (Euros, Dollars) or Bitcoin. So if you choose to deposit another crypto such as Litecoin you are effectively just choosing to store that crypto in your online Coinbase Pro wallet. Generally you will be choosing to deposit fiat currency or Bitcoin.  Let’s look at how each works in turn:

Deposit Fiat

After clicking deposit, choose your local currency from the above drop down box.

Deposit screen seen by US cusomers

Bank Account –  allows you to transfer funds from your standard bank account into Coinbase Pro. The bank account screen allows you to register a bank account and then use this linked account to transfer money in and out.  The Bank account method will take 3-5 business days. If you wish to use a bank account but need the funds quicker you can use a wire transfer to receive the deposit the same day or if in Europe a SEPA transfer which completes in 1-3 days.

Bank Wire – When you click on Bank Wire you will see all the details you need to enter at your bank to initiate a wire.This service is available to those who have access to USD-denominated order books and allows same day transfers.

Coinbase SEPA payment information screen

SEPA Transfer – European customers can also deposit funds from any account that is not linked  via a SEPA transfer which take 1-3 days to complete. Once you have clicked on deposit click on the SEPA tab and take a note of the details on screen, then set up a payment from your bank account to the account listed ensuring you include the reference number. UK customers may wish to read eliminating SEPA international banking fees when transferring into Coinbase.

Coinbase account –  if you already have funds in your Coinbase account you can pull this across for use on Coinbase Pro by selecting deposit, Coinbase account, entering the amount and then clicking deposit funds.

To understand the fess involved read our Coinbase fees guide.

Deposit Bitcoin

Click on deposit on the main screen and then choose Bitcoin from the currency type list.

Deposit Bitcoin Screen

BTC Deposit– If you open up the Bitcoin deposit tab you will see a Bitcoin address both in text and QR code form.  You can use this address to send funds from your chosen wallet to your Coinbase Pro account.   When depositing any other cryptocurrency apart from Bitcoin into your Coinbase account you are just using it as an online wallet, probably not recommended for large amounts.

Coinbase BTC Wallet – If you already have Bitcoin in your Coinbase wallet this allows you to transfer it into your Coinbase Pro account for trading.

Withdrawing funds is the exact opposite process of depositing and has the same options available.  You can withdraw to a bank account, Coinbase wallet or to a cryptocurrency address.  You would use a wallet address to transfer your Bitcoins or other crypto from Coinbase to another wallet.

Order Book

The GDAX order book showing buys and sells

The order book shows currently active buy and sell orders in the market.  The buys shown in green on top and below this are the the sell orders in red. You can think of the order book as representing supply and demand. The sells are people offering their coins for sale on the exchange and supplying the demand for those that wish to make a purchase. For each price level you will see a market size, this is a measure of the number of coins that are for sale or demanded at that price. For example in the Bitcoin order book shown in the screenshot above you can see 2.4 bitcoins are available for sale at 7150.00 EUR, if a matching buy order comes in for Bitcoin at 7150.00 EUR this will reduce the market size for a moment. Coinbase Pro is a busy exchange so you will see the order book changing quickly.

In between the buys and sells you can see the spread which measures the difference between the lowest sell order and the highest buy order.  If the number is low this indicates the markets are relatively well matched between buying and selling, making a liquid market and therefore a healthy exchange.

Coinbase Pro Charts

Price Chart

GDAX candle price chart

The price chart is pretty self-explanatory,  it shows the value of the coin over time. Time ranges available are from one minute to one day. The standard chart type is candle if you prefer the line chart this is also available.  The following chart shows an example line price chart this time set with a time period of one day.

The second type of price chart found in GDAX a line chart

Below both types of  price chart you can see the volume associated with that price activity. The charts are interactive so hover over any area you want more accurate pricing for.

Depth Chart

GDAX depth chart showing buys in green sells in red

The depth chart visually shows the same thing as the order book i.e. at each price point how many are willing to buy and sell. Like many parts of the Coinbase Pro interface the screen is clearly split with buy orders being shown in green on the left and sell orders in red on the right. The chart shows the number of buyers to the number of sellers in the market, or you can think of it as supply and demand.  Along the bottom is the price of the coin and the vertical Y axis shows the number of coins being demanded at that level. 

So reading the chart above we can see for example that at a sell price of 7200 EUR approximately 40 Bitcoins are on the order books available for sale. If you want an exact figure you can hover over the point you are interested in and it will tell you the exact price and the number of coins available at this price and the total value of all those coins i.e. the price * number of coins available.

Open Orders

This area of the screen will show any open orders that you have. In the example screenshot you can see an open limit order for one Bitcoin at $1,000 ( wishful thinking).   If the price met that set in the limit order the order would move from the order section to fills.  If the order conditions were not met it would remain in orders,  in this case of wanting a Bitcoin for $1,000 it will probably remain open for a very long time.

View currently open orders on GDAX in the open orders section

Trade History

The name of the trading history screen can be a little confusing since it may sound like this is your personal order history, it is not. The trade history area of the screen shows orders on the exchange that have been completed. Orders will start off on the order book when open and move to the trade history screen when completed.

GDAX trad history screen showing completed orders

Coinbase Pro Market Order

For those of you reading this thinking when can I just get on and buy some crypto, good news because that’s now.  We are going to start off with the easiest method which is a market buy.  Market buys are simple to understand, you enter the amount you wish spend in the currency funding the transaction, the screen shows you the amount of the coin this will allow you to buy and if you are then happy you click place buy order. The screen below shows we can buy 0.49 Litecoin’s for $100.

Market buy for Litecoin

Let’s run through a practical example. We wish to buy $100 of Litecoin

1 First we would select the trading pair of LTC / USD through the select market dropdown on the top left of the screen

2 Next we enter the amount we want to buy in terms of the currency we are using to fund the transaction.  In this case we want to buy $100 worth of Litecoin so we enter 100.  

3 The exchange then calculates the amount of Litecoin this will allow us to buy,  we can see in this case it is 0.49 Litecoin just under half a Litecoin. If you are happy with this price then simply click place buy order.

Advantages of a market order are they complete almost instantly and are the simplest to do.

Creating a Market Sell order is just as simple we enter the trading pair to select the coin we wish to sell then simply enter the amount of these coins we wish to sell.  Below we have chosen the pairing of LTC / EUR, we enter the number of coins we wish to sell and the screen then updates to tell us the total amount we will receive for the sale. Below we are selling 1 Litecoin for 146.42 Euros.

Performing a market sell of Litecoin

Market Order vs Limit orders

We have just run through an example of a market order.  A market order is simply buying the cryptocurrency at its current price, you can think of it as like the buy now button in eBay or walking into a shop and paying the price on the shelf.  You’re basically saying I am happy to make a purchase /sale of this cryptocurrency at the current price.  This is also known as a market taker order since you are simply accepting the price given and paying it.

With a limit order you specify a price you are willing to pay.    This is a little like going into a shop and haggling or bargaining.  You are not simply accepting the price on the shelf you are suggesting the price and offering it up to any takers. In this case you are a market maker since you are creating an offer and seeing if someone accepts it.

The cheapest way to trade cryptocurrencies is through a limit order since this has zero fees.

Coinbase Pro Limit Order

Let’s run through a practical example.  Imagine the price of Litecoin today is $200, we are not willing to purchase at $200 but we think good value would be at $180.  So we put in a limit order of $180, if the price falls to $180 the purchase is made automatically for us.  In this way we are becoming the market maker we are not simply buying at the market rate as in a market order but creating an offer of value and seeing if there are any takers.

Advantages of a limit order are there are zero fees, second of all it allows you to take advantage of some of the volatility in the crypto market.  Again say we wish to purchase Litecoin and the current market value is $200 per Litecoin we could put in a limit order of $199.  This means if the price does fall to $199 we have got the trade for no fees and slightly below what was the current market rate when we first looked.  

What we choose to set the limit order at will depend on how quickly we want the order to go through and what our motivations are.  If we are happy to pay for market rate but just wish to get zero fees we can do a limit order and simply click on the order of the top of the order book and this will populate the limit order with the current buy price,  this should go through fairly quickly.  If however we are not motivated by getting the current price as quick as possible and are willing to chance that the price will go lower we can set a limit order somewhat below the market price and see if it executes.  If a price does not go as low as the limit order the trade would not take place.

Let’s run through an example of a limit order and then discuss some of the advanced options available.

Using GDAX to perform a limit buy of litecoin

We wish to buy 2 Litecoin’s using Euros and the current market price for Litecoins is 147 Euros.  We want to pay zero fees but think this is a good price for Litecoins so wish to purchase quickly.

1 First ensure the correct trading pair has been selected in this case LTC / EUR from the select market dropdown on the top left of the screen

2 Under limit price enter the price you are willing to pay for the coin. We look at the top of the buy order books and see the price is 147 Euros. We think this is good value so to ensure this goes through quickly enter 147 in the limit price 

3 Next we enter the number of coins we are willing to purchase at that price so in amount we put 2. Double check all the information you have entered is correct and then click place buy order

This is how you place a standard limit order.  It is also possible to use advanced options with limit orders.  You will see the advanced drop down box just above the place order button.

GDAX limit buy advanced options

 The advanced options available to us relate to the time and execution of the order and are as follows:

  • Good till cancelled – This kind of order will sit on the books indefinitely, until the order is filled or you decide to cancel it if the price is never heard. This is the default
  • Good till time – This allows you to keep the order on the books for a specified length of time. For example in the screen shot below we have a limit that will execute if the coin hits the value specified within one day or the order will cancel itself. 

Using GDAX limit order advanced option good till time

  • Immediate or cancel –  Does what it says on the tin if the order cannot be met immediately it will be cancelled
  • Fill or kill  – Very similar to the immediate or cancel order,  this order will attempt to buy immediately but will only execute if the full order can be met.  For example if we were trying to buy 10 Litecoins at $180 but only 9 were available at this price the order would not execute

Read more about the advanced options here.

Coinbase Pro Review

Those already familiar with GDAX will find the transition to Coinbase Pro very simple. There has been a number of minor tweaks to the user interface but you would probably have to look hard to find them. So first off if you are a fan of GDAX you are going to continue to enjoy the experience.

Since Coinbase Pro comes as a freebie to all Coinbase users it seems a no brainer that if you are happy with Coinbase that you checkout Coinbase Pro.  Coinbase Pro as the name suggests is a much more professional trading platform delivering significantly more information and flexibility in buy and sell options vs Coinbase. The range of options is both its strength and weakness, since it gives a significant amount of flexibility and lower to no fees but that comes at the cost of complexity. In summary if you are new to trading you probably want to start with Coinbase which has a very simple and intuitive interface. Coinbase Pro is aimed at the more experienced trader who is confident in what they are doing and would benefit from the additional options at their disposal.

Further Reading

If you enjoyed this Coinbase Pro tutorial also checkout these articles

Simple guide to the Blockchain

What are Coinbase’s fees

How to trade cryptocurrencies cheaply

Buying bitcoin cheaply in the UK

 

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