But what's the harm in keeping it on an exchange and not traded, is it at a loss? and if it is lost it will be the responsibility of the exchange, but if it is stored in a hard wallet and is lost, only you are responsible.
so which one is more effective and safer when securing your Bitcoin?
First of all, your coins won't get lost in an exchange. In rare scenarios, they are compromised by hackers or phishers and in a case like that, the exchange would never take the responsibility and compensate you with the amount of coins you had from their own vault. That doesn't happen.
So, the ideal solution is to withdraw and store your coins somewhere like a cold wallet, and keep your private keys safe. It is never recommended to keep storing your assets in an exchange unless you are using them for trading purposes.