Meaning of leaving money on the exchange

[goodoboy]

Hello,

I was doing some research on Bitcoin trading.


http://prntscr.com/h76g3r

What does this mean by "Ideally, when trading, only deposit to make a trade, then get your money off the exchange." from the link above. I took a screenshot from an article.

Does this mean, if i take a trade on exchange GDAX and close it the trade with a profit of say $300, I need to withdraw $300 from GDAX instantly? Or does this mean, don't leave extra money in my GDAX trading account that I will not be used for trading only?

Thanks, still learning.

[Kloug]

It means it's more safe to hold your currency locally, in a hardware wallet, than trusting an online service to do it for you. One that can be hacked or go out of business, or be a scam. They're not as reliable as large banks (which themselves proved not to be so reliable either)

So it means when you're not actively trading but holding it for years/months.
Of course you can also screw up holding your bitcoins yourself, but then it's your own fault.

[goodoboy]

It means it's more safe to hold your currency locally, in a hardware wallet, than trusting an online service to do it for you. One that can be hacked or go out of business, or be a scam. They're not as reliable as large banks (which themselves proved not to be so reliable either)

So it means when you're not actively trading but holding it for years/months.
Of course you can also screw up holding your bitcoins yourself, but then it's your own fault.

Thanks Kloug for the help,

I plan to only day trade the bitcoin market BTC/USD so, I will be cash most of they day or when I go to sleep.

[Kloug]

Yeah then you of course should leave it on the platform.

Cashing out your losses at the end of the day isn't necessarily the best idea, though.
I don't even think it's safer, especially with altcoins, where you can double but also half your bet within a few hours.

[Jating]

Hello,

I was doing some research on Bitcoin trading.


http://prntscr.com/h76g3r

What does this mean by "Ideally, when trading, only deposit to make a trade, then get your money off the exchange." from the link above. I took a screenshot from an article.

Does this mean, if i take a trade on exchange GDAX and close it the trade with a profit of say $300, I need to withdraw $300 from GDAX instantly? Or does this mean, don't leave extra money in my GDAX trading account that I will not be used for trading only?

Thanks, still learning.

It only means that you don't store all your bitcoin in an exchange because it is not safe. Most traders here will just leave a few bitcoin or altcoin on an exchange for their daily trading needs. And if the coins already grow and just sitting on it, we have a practice to moved that coins and deposit to your personal wallet like Electrum because you have total control of it. When your coins are just sitting in an exchange, there is a likelihood of a hack resulting you losing it. Or if the exchange suddenly close because the authorities says so, like what happened to BTC-e, then its gonna be difficult for you to get it back. So to be safe moved your coins out from an exchange to a wallet that you own.

[clarkt]

If you make $300 profit in bitcoin as you said let say the profit was made on $3000, if you have not cash out your profit in bitcoin, you have not made that profit. It is still a paper profit if the profit is still in the form it was made. And if you have cash out in bitcoin but your bitcoin is still on the exchange that means you are not in charge of your fund yet and if anything happen to wallet on exchange of which you donot have private key , then youhave lost of everything.

[wilbursina]

It's not always a safe bet to keep Bitcoin in the exchange. If you have a wallet, try to keep it in your wallet, and importantly, keep your wallet's private key

[Kloug]

It's not always a safe bet to keep Bitcoin in the exchange. If you have a wallet, try to keep it in your wallet, and importantly, keep your wallet's private key

Quite ironic:

https://techcrunch.com/2017/11/07/a-major-vulnerability-has-frozen-hundreds-of-millions-of-dollars-of-ethereum/?ncid=mobilenavtrend


Trusting an online service, or trusting hardware.. really I'm not sure what's worst. It depends on the size & reputation of the service. I trust my bank probably more than I should, but I wouldn't wanna have all my money in gold bars under by bed. Or even worse, as a magic code in my memory, which I don't trust at all.

[Theb]

That is just a precaution given to people who uses exchanges as even the most reliable exchange can be vulnerable to attacks. Not to mention that the exchanges have the power to hold your account when they want it. This exchanges are not the extension of your wallet as any time they can be shutdown by the certain countries they are operating with.

[minersday]

Because a lot of people are losing money because of those fraudulents exchanges, i still remember those times in where i had more than 0.50 bitcoins on my poloniex wallet, and poloniex closed my account without any explanation, i tried to send several support tickets but none of them was answered (bitcoin was below $2500 by those times) but it was not fair, a lot of people had the same issue.
I dont know why it happened to me, but because of this is that i am so insecure about exchanges and everything that concerns about them.

[osasshem]

It is not really good leaving your profit on exchange sites, cause you are not fully in control of your coins in the account. So, it is better for you to withdraw to your wallet where you have all the access code, so as to avoid losses.

[hahahafr]

It is risky man, but there is no way that you could lose your money if you leave your money on a big exchange like polo or bittrex, not even cryptopia. That guy who lost 0.50 bitcoins probably lost them because their funds were connected to something weird, so there is no need to worry if you are going to leave your coins in there, because there is no way that you can lose them, no matter what.
I have some coins on Polo and i have never experienced something strange.

[Nasty23]

It is not really good leaving your profit on exchange sites, cause you are not fully in control of your coins in the account. So, it is better for you to withdraw to your wallet where you have all the access code, so as to avoid losses.

Yes I agree to you that it is not really good and safe to store money in the exchanger because we don't have any control on it and anytime the website can be go down and we don't have any chance to get back our money.

[tobs]

It is not really good leaving your profit on exchange sites, cause you are not fully in control of your coins in the account. So, it is better for you to withdraw to your wallet where you have all the access code, so as to avoid losses.

Yes I agree to you that it is not really good and safe to store money in the exchanger because we don't have any control on it and anytime the website can be go down and we don't have any chance to get back our money.

I actually have slowly seen a trend, that some of the exchanges try to encourage the users by giving them a personal wallets and addresses on their exchange accounts. Maybe you don't have a full control, but it's also not like your money is stored in the same place as everyone else's. That way also, there was no problems with funds in case of forks as they could easily just add them to your exchange account, because you are in a way an owner of these addresses.

[jerry0]

What about those traders on bittrex who buy like 25+ altcoins etc.  Are they really going to download 25 different wallets on their computer though?

[littlebill16]

Hello,

I was doing some research on Bitcoin trading.


http://prntscr.com/h76g3r

What does this mean by "Ideally, when trading, only deposit to make a trade, then get your money off the exchange." from the link above. I took a screenshot from an article.

Does this mean, if i take a trade on exchange GDAX and close it the trade with a profit of say $300, I need to withdraw $300 from GDAX instantly? Or does this mean, don't leave extra money in my GDAX trading account that I will not be used for trading only?

Thanks, still learning.

It is good practice to remove all funds from any accounts and in to a secure wallet whenever you are done trading, many people got burned years ago when Mt. Gox went down and it is wise to reduce the risks of such a thing happening again.

[BartS]

Hello,

I was doing some research on Bitcoin trading.


http://prntscr.com/h76g3r

What does this mean by "Ideally, when trading, only deposit to make a trade, then get your money off the exchange." from the link above. I took a screenshot from an article.

Does this mean, if i take a trade on exchange GDAX and close it the trade with a profit of say $300, I need to withdraw $300 from GDAX instantly? Or does this mean, don't leave extra money in my GDAX trading account that I will not be used for trading only?

Thanks, still learning.

The reason to do that has to do with the fact many people do not trust exchanges to hold their funds for the long term, there have been too many hacks, technical problems, scams and governments raids, and people have lost fortunes so every time you are done for the day it is a good idea to withdraw your money from the exchange, it is a pain but you need to do it.

[Youghoor]

It is very risky to leave money on a exchange, it doesnt matter how much money you have in there, i use to never leave a buck in there because i am afraid to face a hack or something else who can compromise my account or my funds, it is a serious problem and nobody should leave money in there.
I used to trade before, and after every trade, or after every day i used to withdraw that money because i dont feel safe to have money in there, you all know that they can just suddenly disappear and run away with your hard earned money.

[Welsh]

It is risky man, but there is no way that you could lose your money if you leave your money on a big exchange like polo or bittrex, not even cryptopia. That guy who lost 0.50 bitcoins probably lost them because their funds were connected to something weird, so there is no need to worry if you are going to leave your coins in there, because there is no way that you can lose them, no matter what.
I have some coins on Polo and i have never experienced something strange.

Any exchange could just disappear with the funds or get hacked. There's been several instances where this has happened and it's likely to happen in the future too. Not only that but exchanges are a gold mine for hackers to try and get access into peoples accounts which will happen from time to time. Keeping money in any online service isn't good practice. Also trusting your funds in someone else hands is not a good idea.

[kidoseagle0312]

Hello,

I was doing some research on Bitcoin trading.


http://prntscr.com/h76g3r

What does this mean by "Ideally, when trading, only deposit to make a trade, then get your money off the exchange." from the link above. I took a screenshot from an article.

Does this mean, if i take a trade on exchange GDAX and close it the trade with a profit of say $300, I need to withdraw $300 from GDAX instantly? Or does this mean, don't leave extra money in my GDAX trading account that I will not be used for trading only?

Thanks, still learning.

At least you are exploring yourself about in this things, though for a newbie like you it wouldn't be easy to understand this matter at early stage. But just be patience and continue what you are doing it now. If you leave money on trading you want to multiply your capital by this things just be careful on choosing in which coins you are going to trade in mate. and check the coinmarketcap.com choose among the top 20 listed in there. Okay