Storing your BTC on an exchange is the common way most traders save their coins. But is it the best method? Cold storage to me look expensive, since it is costive to purchase hardware.
not really, traders only keep the funds they want to trade with on exchanges. newbies who don't know what trading is are keeping more amounts on exchanges.
and most people don't trade with all they have. most of them have some funds in cold storage and only trade with smaller portion of those funds and that is kept on exchanges and only for as long as they are trading with them. if a trader stops trading for any reason like price being stable, they withdraw their bitcoin immediately back to cold storage.
as for cold storage cost, you should know that cold storage is not only hardware wallets but hardware wallets are only a sub category of cold storage. if you don't want to spend money they use paper wallet.