Advanced Trading on Coinbase: How to Maximize Your Crypto Profits

The easiest way to start using Coinbase is in the platform’s simple mode. That way you can buy and sell coins with a minimum of complications, using whichever standard payment methods you’ve connected up with your Coinbase account.

That’s great if you just want to HODL some coins, but after a while you may want to step up your trading and dive into the charts and the order book, or maybe you’re already familiar with how trading works, and in either case, you’ll need to switch modes and get to grips with advanced trading on Coinbase. 

What Is Advanced Trading on Coinbase?

Up until 2022, Coinbase operated its regular platform, and also a more advanced exchange called Coinbase Pro. However, the Coinbase Pro features were migrated across to a new mode on the standard platform called Coinbase Advanced.

This means users can choose from two different styles within one platform, using the simple mode if all you want to do is quickly buy and sell coins, and switching to Coinbase Advanced if you want a more professional trading experience with additional tools. To first get set up on Coinbase, please check this earlier guide: Getting Started With Coinbase.

Switch to Coinbase Advanced Mode

To get into advanced trading on Coinbase, you’ll need to switch modes, and to do this, check across in the vertical navigation bar to the left of the Coinbase home screen, and down at the bottom you should see a switch labelled Advanced. You can then click there to toggle between modes.

Top Coinbase Advanced Trading Features

Let’s run through the trading and investment features you can gain access to by using the Coinbase Advanced trading mode, and highlight how to use them to your advantage if you want to focus on maximizing crypto profits.

Trade Spot With Market and Limit Orders

Whereas on Simple mode, you simply select the coin you want to trade and then click through to either buy, sell or convert it, in Advanced mode, you’re looking at a trading console with charts and a visible order book, and you need to place orders to buy and sell coins.

This introduces more dimensions to your trading, and is preferable over the long term if you want to get a feel for the market, and for how exchanges actually operate.

In advanced mode you can place Market Orders–which execute immediately at the best market price–or alternatively, you can place Limit Orders. The advantage of Limit Orders is that you can set a trigger price at which they execute, so for example you can open an order to sell an asset when it hits a certain price level, or to buy an asset when the price dips to a certain level.

This allows you to set orders and leave them, and it lets you plan out strategies and then place orders accordingly, and as forward thinking is key to trading effectively this can help to keep your market activity disciplined.

Use Technical Analysis on the Charts

You need to know where to place your buy and sell orders, and if you’re in Advanced mode you’ll have a trading chart to refer to, on which you can apply integrated Technical Analysis tools and indicators.

And even if you’re not setting orders in advance, Technical Analysis allows you to better understand trends and patterns that are playing out, and can assist when assessing what may unfold next. That said, always keep in mind that these indicators cannot predict the future with certainty, they can only offer signals to assess the probabilities of a range of future movements.

That means Technical Analysis should be used in conjunction with other pointers, such as looking at liquidity cycles, and at our position in the Bitcoin halving cycle. Also, Technical Analysis is a vast area, and you can get as complicated as you like with it. At first though, just applying a few simple tools–such as Fibonacci levels and moving averages–can be a good way to figure out key price levels.

Additionally, it’s worth getting familiar with chart formations–meaning patterns such as bull flags, and head and shoulders formations–and at different types of candlesticks–looking at the shape of the body and the wick–to identify further signals as they develop on the charts.

Check the Depth Chart

Also on the subject of charts, in Advanced mode you can check the Depth Chart, which gives a real-time visualization of what’s happening in the order book. This chart shows supply and demand, with bids (buy orders) in green on the left and asks (sell orders) in red on the right.

This way, you can clearly see points at which there are a lot of orders, known as sell walls and buy walls. These walls can indicate positions of support and resistance, although the dynamic can change rapidly as market psychology shifts, and remember also that orders can be pulled, and walls may be set up by whales (entities or traders operating with size) to influence the market.

Stake Your Coins

Short-term trading can be stressful, so if you’re planning instead to simply HODL some coins on a longer-term time frame, it’s worth taking the opportunity to earn passive income in the process, and you can do this by staking your coins through Coinbase.

In order to do this, you need to click on More in the navigation sidebar, and then click on Earn. From there, under My earning assets, Coinbase will list which coins in your portfolio are eligible for staking, alongside an APY calculation for each, and you can simply click on the asset you want to stake, then click Start Earning, and click through the popups to initiate the process, checking all the details along the way.

Also, under Buy new earning assets, the Earn page displays other listed tokens that can be staked on Coinbase, so check there to see which are eligible and what kind of APYs are on offer.

Trade Derivatives

On Coinbase Advanced you can trade Spot, or if you go over to the navigation sidebar on the left you’ll see that there’s also a Derivatives tab.

In the Derivatives section, users can trade futures contracts with leverage, which means you can control larger positions than if you were only using your own capital, and what’s more, you can take both long and short positions, allowing you to bet on prices both rising and falling.

Overall then, the benefits of derivatives trading are that you can amplify gains, and you can profit from the market moving in either direction. However, you might also amplify losses, and leverage introduce the risk of liquidation–if that happens, you’ll lose all the funds that you had in the liquidated position.

Please note though that whether or not you can engage in derivatives trading on Coinbase depends on your region, as this service is restricted in some countries, and also, you’ll need to complete a further Coinbase approval process before gaining access.

Advanced Trading Tips

Let’s finish with some professional trading tips to make sure you’re maximizing crypto profits and not handing gains back to the market.

• Navigate the Bitcoin halving cycle. Some tips are applicable across asset classes, but one point that’s only relevant to crypto is to always be aware of our position in the Bitcoin halving cycle. This four-year cycle creates the wider context within which all crypto trading takes place, and it has proven–up to now–to be the best indicator of where the market is heading next.
• Understand crypto sector rotation. Within crypto there are multiple sectors, so, broadly, we have BTC, and then ETH, and then major alts, and then there are smaller subsectors such as meme coins, AI coins, and DeFi tokens, and these too can be broken down still further. And the key point is that these sectors ebb in relation to one another, with capital flowing towards hot sectors while others cool off.
• Don’t over-diversify. In contrast to the above point, it can be profitable to concentrate on a minimal number of assets and sectors, developing focused expertise and familiarity. That said though, this can depend on how much time you have available to follow crypto developments and keep track of your portfolio.
• Don’t over-trade. Crypto is fast-moving and during a bull run you’ll see sudden explosions in price, meaning you can often be tempted to sell one coin and jump into a new trade. While that can sometimes make sense, it’s on the whole advantageous to avoid over-trading. Plan ahead, know what you’re holding and why, and have clear plans for entries and exits. Of course, you should be quick to change direction when necessary, but avoid chasing the market and don’t become impatient.
• Manage your risk. Think carefully about sizing, and about the risks and returns on the coins you’re looking at. Take profits on the way up, and if you’re trading derivatives on Coinbase, be aware of the risks associated with using leverage.