HODL or trading: what is more suitable for a beginner?
Cryptoinvestors are divided into two main categories. Some adhere to Hodl strategies: they have not sold their assets for years, believing that in the future they will cost more. Those who adhere to the first strategy are called the Hodler. They are not afraid of subsidence, they do not chase the Tuzemons (from the English to the Moon – a sharp jump in the course up) – in the midst of cryptosim and price rally, they are calm and do not panic. Traiders, on the contrary, cannot afford to wait and want to get rich right today. They actively trade, guess the graphs and candles and will never miss their percentage of profit per day. We compared both strategies and figured out which one is more suitable for a novice investor.
Hodl: buy and hold
The term Hodl arose due to a typo of one of the users of the large crypto forlyum Bitcointalk․org. In December 2013, the Bitcoin exchange rate was experiencing strong correction – in two weeks the price of the coin fell in half: from $ 1,120 to $ 560. The user of the forum with the nickname Gamekyuubi created a topic with the subtitle “I am hodling” (“I am Dezhra”) instead of the spelling of the correct “I am holding” (“I hold”). In his post, he said that he was a bad trader and simply holds Bitcoin, trying to maintain funds during volatility.
Gamekyuubi admitted that he was seized by accident – he drank whiskey before creating a topic. But he became viral and the word hodl turned into a synonym for long -term investment strategies.
Gradually, the crypto community was invented by one of the decoding the term – “Hold on For Dear Life” (“Hold on the last forces”).
Formally, Hodl is a variation of classical investmenttheity Buy & Hold, “buy and hold”, from time immemorial used in the stock market.
Instead of trying to determine the right time to buy and sell, the investor simply buys an asset and holds it until he wants to withdraw funds (transfer to cash). The legendary investor Warren Buffete loves to say that you need to choose a promotion for buying as if you are going to own it forever.
Hodler do not sell digital assets, because they believe that over time their price will only increase. Therefore, Kholer holds the purchased asset and does not sell it under any situation in the market, ignoring the drawdown, cryptosims, price rally, FOMO and FUD. He believes: no matter what happens, in the future crypto will retain a long -term upward trend.
Hodler’s logic is simple: if in the future the market will grow, then the later you sell the asset, the more profit will be. Active trading with digital assets, although they may turn out to be profitable, still significantly increase the risks. It’s more reliable to just keep your assets and not pay attention to short -term losses.
Most often, the HODL strategy applies to the flagship of the cryptorrhist – bitcoin. Faith in the long -term ascending trend of the first cryptocurrency is based on its deflation in nature: the supply of bitcoin is limited, there will be no more than 21 million coins on the market, which means that while maintaining demand, the price of the first cryptocurrency will always grow.
We think that the Hodler largely form the cost and create a value supply of VTS. The coin is alive and develops largely thanks to the faith of its holders. While there are those who are ready to buy, but not sell, its high price will seem reasonable.
Hodler keep coins not only because of potentially high profit, but also for ideological reasons, such as the advantages of decentralization, complete financial freedom, faith in the massive adoption of cryptocurrencies.
Trading or active trade
The opposite of Hodl Strategy is active trade. Some traders from this category prefer trading during the day and are engaged in the so-called de-trading-closely monitor the slightest changes in quotations to earn a few percent of the deposit per day. Others prefer to buy assets in the middle and keep weeks or months until their price reaches certain values. Such a moderate approach allows you to reduce risks and rebalan the portfolio in time.
Fast profit in case of success. If the deal is successful, the trader will quickly receive his profit, which can be immediately spent, and not wait years for X.
Potentially large profitability than with passive investment. If you do not miss all the possibilities arising on the market, you can earn much more than just holding the asset. For example, if you sell the same bitcoin on local maximums, and then buy on local minimums, then you can gradually increase the number of coins in the portfolio.
Access to a large number of investment tools. Traders are available not only investments in digital assets, but also derivative financial instruments based on cryptocurrencies like futures and options.
The best understanding of how the market works and where it goes on. Active trade allows you to better understand the specifics of the market and understand how to properly use various analytical tools to predict its further movement.
However, it requires a lot of time and resources. Active trade is a full -fledged working day. To trade in a plus, you need to constantly monitor the news, monitor the state of the market, study graphs, use techanalis. Also, before you start using various investment tools, you must first thoroughly study them and understand their device. Cryptoes work around the clock, it has no weekend and it does not close for the holidays. And this means that the trader does not have days off.
High risks. Trading is the best way for a beginner to lose the whole deposit and do not earn anything. The risk of losing investment many times exceeds possible profit. Daytime trading is more gambling than investments: it is impossible to reliably predict price behavior. According to some estimates, 95% of traders lose money and trade in minus. Even if you are regularly trading in a plus, only one mistake, for example, an unsuccessful short, can destroy the profit made for months of successful transactions.
Undoubtedly, only Hodl is suitable for newcomers in crypto – this is Staking vs. mining: the safest and simplest strategy. Active trade is a lesson for professional adventurers who are ready to risk money every day.
For most investors, the following solution will be the most optimal: to combine HODL and medium -term investments. For example, 60% of the portfolio, and for the remaining 40% – trade. This will help reduce risks and at the same time not to miss the emerging profitable opportunities.
For traders, the Revenuebot market crypto offers an automated trade interface. The user can trade on top crypto exchanges, including: Binance, Bittrex, FTX, OKX and others. Revenuebot provides traders with the opportunity to create trading bots that allow you to get stable passive earnings. Of the main advantages of the service, the following can be distinguished:
- Payment for the services of the service occurs only after receiving the first profit, no prepayment is required;
- Revenuebot internal marketplace allows you to buy a finished bot and sell a profitable configuration;
- The presence of a Revenuebot referral program allows you to make money without even resorting to trading;
- Revenuebot uses a strategy for averaging dollar value (DCA), with its help you can successfully trade and receive income in the long run;
- Automatic switching of a trading pair allows you to benefit from trade always. The bot itself will switch to another trading pair if the main one is not possible to earn money.
Revenuebot has a Telegram chat for users and an official Telegram channel where the service news is published, as well as relevant information from the crypto industry. More details with the capabilities of the service can be found on the official website Revenuebot .