GDAX Tutorial

This guide will break down everything you need to know about the GDAX exchange. The contents of this guide are:

-Why Use GDAX 

-Trading pairs 

-Header

-Candlestick Graph 

-Order Book 

-Depth Graph 

-Market Order (4:34)

-Limit Order (6:51)

-Stop-Limit Order 

-Funds and Balances (6:29)

Why Should I use GDAX instead of other exchanges like Coinbase?

GDAX and Coinbase are owned by the same company. Their main differences are that GDAX has lower fees and a different interface. GDAX is a trusted platform that has not faced any security issues. GDAX is designed for consumers to buy, sell, and store digital currencies, including Bitcoin, Ethereum, Litecoin and Bitcoin Cash.

Trading Pairs

To select the trading pair you want to use, go to the top of the tab on the top left of the website next to the GDAX logo. Select the trading pair you want to use. For example if you want to buy Bitcoin with US dollars, select the BTC/USD tab.

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Header

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The top of the basic exchange displays the trading pair you are looking at, in this case this is buying Bitcoin with USD. The Last Price shows the last price bitcoin was sold for. The 24 hour change compares the price of Bitcoin now to where it was 24 hours ago. Remember that crypto trading does not stop outside of 9:30AM-4PM, so most exchanges use a 24H change instead of an open/close price. The header also shows the 24 hour volume.

Graph

If you are new to finance or candle stick charts, this could look intimidating, but we will make it easy for you. The primary candlestick chart GDAX uses is split up into three sections. The top part of the graph shows the price, the middle part shows the volume (VOL), and the bottom part shows the “depth of book’. It shows how many BTC are offered (right side, red), and how many are bid at a certain price or better (left side, green). The price is displayed at the bottom along the x axis.

Each candle (bar) in the candlestick graph represents a time interval. On the top left of the chart you can select different time intervals for each candle. You can select 1 minute, 5 minutes, 15 minutes, 30 minutes, 1 hour, 2 hours, 4 hours, 6 hours, 12 hours, 1 Day, or 1 week. The photo above uses 5 minute candles.

Each candle signals the high, the low, the open, and the close for that certain interval. A candle is green if the value went up during that interval. A candle is red if it went down during that interval. The top part of the line of the candle shows the high. The top part of the bar of the candle shows the closing price of that interval if it’s a green candle or the open if it is a red candle. The bottom part of the bar of the candle shows the opening price of that interval if it is a green candle or the close of a red candle. The bottom part of the line of the candle shows the lowest price during the interval. Note that sometimes a candle will close or open on its highest or lowest point, so sometimes there will not be any lines sticking out of the candle.

There may be two lines overlaid on your graph called EMA12 and EMA26. These represent Exponential Moving Averages over the last 12 or 26 days. These are moving averages that give more weight to recent data when calculating the average. It is human nature to not want to buy something at a higher price than its average, but past performance is not indicative of future results. Instead, we encourage you to focus on the fundamentals of a cryptocurrency rather than if it went up or down in the last week or month.

Order Book

The top, red, half of the order book shows a list of sell orders. The bottom, green, half of the chart shows a list of buy orders. The first column is the quantity of a coin offered and the second column is the price. The number in between the sale and buy book shows the difference in price between the most competitively priced buyer and seller.

Depth Graph

The depth chart illustrates the buy and sell order book. The intersection of the buy and sell sections shows the market price.

Types of orders:

Market

The market order is an instantaneous order that matches the amount that you want to buy or sell with the best existing sell or buy order. This order is very simple to make. Simply type in the amount of currency that you want to buy and click the place order button. Right above the place order button you will see the estimated total that you are going to be receiving. The market order has a .3% fee on GDAX vs the 0% fee of a limit order. However, with a market order, you are guaranteed to fill your order.

Limit

The limit order allows you to set a price to buy or sell a currency. Instead of you accepting somebody else’s offer, they get to accept your offer. For example, if you think the market price of a coin is currently too high, you can set a buy order at a lower price. If the market price ever drops to the price of your buy order, somebody will accept your buy order and sell to you. A limit order can be used to achieve a better price than a market order, but there is no guarantee that it will ever be filled. For example, if you think $11,000 is too high for bitcoin so you set a buy limit at $10,000, and bitcoin never drops to $10,000, your buy order will stay active until you cancel it. When you have an active order, those funds are no longer available to you until the order fills or until you cancel the order. If you want to make a new trade using money that is already part of an existing order, you will have to cancel the order to make a new one. The money can only be used in one place at a time.

Stop Limit

A stop limit is the most confusing of the three orders and is most commonly used to stop or cut off a loss. One places a sell stop limit order if they think the price will go down and a buy stop limit order if they think the price will go up. A stop-limit order is a limit order that you would place in the future if a certain price is triggered. A stop-limit lets you create a limit order once a certain price is breached. Lets say Bitcoin is at $11,000. If you think it is possible it could quickly crash to $7,000, you could tell GDAX that once the price breaches $8,000, to automatically set a sell limit at $7,900, which would save you $900 if it actually crashed to $7,000. However, if the market was crashing that rapidly, it is possible that somebody could undercut your $7,900 and your order would not be bought. This is only a concern when dealing with large amounts of money because small orders would most likely get filled before getting undercut. This is different than setting a normal sell limit because if you were to set a sell order at $7,900 if the market price was at $11,000, somebody would buy your order immediately. In the event described above you would set a stop at $8,000, set the limit order to $7,900, and then set the amount at whatever quantity you would want to sell at that price.

How do I see my funds?

Go to the “Accounts” tab on the top right of the website and click on the specific currency that you are trying to see your balance for. Each currency has its own wallet in GDAX.

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