GDAX is an exchange used for buying and selling some of the more popular cryptocurrencies including Bitcoin, Ethereum and Litecoin.
GDAX is very closely affiliated with Coinbase – a popular platform in the United States used for purchasing cryptocurrency with fiat (Dollars, Euros, Pounds). In fact, you can use the exact same user account for both services.
Once you make your initial cryptocurrency purchase, let’s say, Bitcoin, you can then use GDAX to buy and sell Ethereum and Litecoin with the Bitcoin that you purchased.
You can even continue to trade Bitcoin and fiat if you’d like – hopefully with smart trading choices.
Remember, the information in this article should be looked at as software advice, not financial advice.
When exchanging cryptocurrencies on GDAX, you have the option of executing trades as a maker or as a taker. If you execute your trades as a maker, you can do so without incurring any trading fees.
What’s the difference between a maker and a taker?
When trading in a market, makers provide liquidity to the market by specifying, beforehand, the price that they’re willing to buy or sell at.
On the other hand, takers buy or sell at current market price – they are essentially taking liquidity away from the market.
On most cryptocurrency exchanges, makers will incur fewer fees than takers but, as mentioned above, there are no fees for maker orders on GDAX.
This essentially allows you to trade for fee. You’re still responsible for taxes in the United States and trading as a maker generally requires you to be more precise with your trading prices – it’s easy to put buy orders in that are too low and sell orders in that are too high.
Buying Bitcoin, Ethereum and Litecoin with GDAX
As mentioned earlier, GDAX and Coinbase are owned by the same company. Interestingly enough though, it’s cheaper to exchange fiat for Bitcoin on GDAX than it is on Coinbase.
Coinbase / GDAX is a United States based company with a reputable history so many retail American traders make their first purchases using these systems.
Remember, to pay lower fees, use GDAX, not Coinbase.
The video tutorial above will show you everything you need to know to get started purchasing and trading cryptocurrency using GDAX.
GDAX Limitations
Although GDAX is a good place to get started in trading cryptocurrency, there are some limitations that force more experienced traders onto other platforms.
First of all, at the publishing of this article, the only cryptocurrencies that can be traded on GDAX are Bitcoin, Ethereum and Litecoin.
Other exchanges allow users to trade dozens of cryptocurrencies all in the same place. Some of the more popular places to trade are Binance, Bitfinex, Poloniex and Gemini.
The charting tools available for GDAX are very limiting. As a beginner trader, I find it much more difficult to get the big picture when looking at charts on GDAX. I recommend using TradingView for all of your cryptocurrency charting needs – I’ve also published a tutorial on using charts on TradingView that you may find valuable.
