Bitcoin Investment Strategy: HODL vs. Trading

Which is better? HODL vs. Trading ?
Hodl is a long-term strategy of investing. - OR - Trading is a short-term investment strategy.

I created this post because everything I’ve read about strategies for investing crypto, are all vague or undefined. Hopefully this article can help improve your financial decisions.

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Hodl or Long-Term Strategy HODL vs. Trading

WHAT

• This is a passive investment
• It’s buying cryptocurrency and keeping, securing, or hodling it for a long period of time despite the changes ofprices in short-term market .
• It’s often used by investors that trusts or believes that their asset’s value will increase in long-term

HOW

🎯 SET GOALS!

• Determine or know what cryptocurrencies are for long-term investments?
• Rank the ones you’ve chosen to know how allocate your funds.
• Will your investment goals be set with time or with value of coin?
• Set a target for when to pull out, whether time or value based as well.
• Set your limits to what you’re willing to risk or lose from your investment.

WHY

• If you’re confident that the cryptocurrency you chose to invest in are long-term winners .
• If have the confidence in your ability to analyse technical stuff.
• If you just want to invest.

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Trading or Short-Term Strategy HODL vs. Trading

WHAT

• Trading embraces the short-term volatility of the coin’s price changes.
• Profits from these drastic changes.
• Rewards are quicker but it requires a lot of effort.
• Usual terms ranges from minutes, to hours, to days, or months.
• Trading is an active investment strategy , which requires a lot of attention, focus and time for research and being active with other platforms.
• Prices changing to direction that you don’t want it to go to, whether up or down can cause a lot of stress.
• If it gets more difficult, most people still sway to the short-term investment strategy or “trading” because of the potential for high percentage gains in a short period of time which does not require a trait most people don’t have - patience.

HOW

🎯 SET GOALS!

• Determine which coins are profitable in short term.
• For every investment set a criteria for example, volume, market cap., coin purposes, etc.
• Set a target for when to pull out.
  • % of return you gain (Realistic)
  • % of value you lose (Set to value you can accept to lose)
• Set daily, weekly or monthly targets on profit.
  • Use this data to gauge whether this is more profitable than passive investment strategy.

Having these done beforehand is a great advantage. It will guide you through this road. You might change or bend them if better opportunities come..

WHY

If you have enough spare time to invest, enough capital in order to gain sizable returns in a short period of time, and confidence in your ability to analyze, then trading is the way to go for you.

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SO WHAT SHOULD YOU DO? HODL vs. Trading

Know how much of your capital, like 60%, you want to invest in cryptocurrency assets that you think are long-term winners, you want to safely bet, as this is a safer choice compared to trading. And leave or hodl these assets until the time you set is reached. On the other hand, or the remaining %40, you can trade on coins that are more volatile.

Determining the percentage of investments you put in on either strategies are all dependent to whatever goals you’ve set, motivations you have or circumstance you’re in. Each person have unique situations, and what’s best for me or someone else might not be best for you.

Set rules for yourself, such as;

• Only invest what you’re willing to lose
• Religiously follow goals, plans, strategies, and targets you’ve written down.
• Track everything.
• Compare your active trading against bitcoin’s passive performance.
• If trading can’t beat Hodling’s numbers then adjust funds accordingly. Vice versa.
• Diversify, diversify, diversify your investments.