Topic: risk in hodling and trading strategy (Read 26446 times)
I was once a true believer in the HODL thing and have always defend it but now I realize I am just an idiot who got played by the real veterans. The real strategy is to never hold for long because if a coin is going to pump then it will pump. Even if you miss the chance, there are many altcoins out there so there are plenty of chance you can experience that pump you have been waiting for life. I only advised to hold your coins for months and trade it if it don't give you gains because you will get emotionally attached to it and you will never sell.
What a nice topic I just learn some tips and differences between trading and holding in the crypto industry although I have not practiced it yet thanks so much for this information. This topic has makes me to develop interest on Trading instead of holding as the risk is less and probability of profit making is little guaranteed.
I've seen many times on this forum statements like:
"trading is risky, holding is safer"
"when you are hodling you are not making that many mistakes"
"in trading there are much more possibilities to lose money"
"if you would buy ether for 1$ look where you could be now"
"Hodler is not affected by whales making pump and dump"
Let's discuss then how does investing time goes with risk taken (lets discuss only about risk).
Hodler strategy risk:
Hodler is buying coins by fundamental (whitepaper, team, code, hype, being unique in specific segment) analysis for very long period. Hodling is a strategy very often suggested for newbies in cryptos (when you are newbie than buy good coins and sell on profit after years - I heard it thousands time). What can go wrong?
1- whitepaper is just a document with words. It can be copied and change a little. Faked. I can create my own whitepaper in which ill write that tomorrow ill be on mt everest.
2-team can be faked with fake twitter account with bought followers
3- code - who of us can check if code is OK? How many of currencies have working code now? Most of them are just concept without working product jet.
4- hype can be bought.
5- being unique didn't give you certainty of being unique forever. 1 month after your investment there can be new ICO with better team, bought hype and with working product delivered faster.
6- you are newbie and you did fundamental analyst wrong or didn't do at all just jump after hype or because someone said that its great investment
7- there are 1600 coins. More than 1400 won't survive next few years because they are not necessary. Your decision must be precised and full of luck
What if any of above will happened? Your investment will continuously goes to 0. And if you are hodler you will never sell until there will be nothing to sell. When you are buying with hodler strategy you are risking 100% of your investment. I don't think there is more risky way.
Trader
Good trader have loved coins that he checked fundamental and trade on them. He is trying to buy low and sell high. When trade is not going how he planned it he sells. He don't w8 for coin to hit bottom to panic sell, he tries to sell on the rise. His risk is set by him by stoploss which is set in his trading strategy. And it depends on time period he is investing in and expected profits. He don't fallow pump and dump.
Time period:
When trader see good buy opportunity on 1d candles he has to set stoploss lower, he takes bigger risk then but possible profit is bigger.
When he sees opportunity on 5 min candles he can set stoploss even 0,5% under buy point risking only 0,5% of his investment.
Trader is taking known risk each time he enters trade and this risk i related to expected profits. When trades are not going well he can stop trading, lock money into bitcoin or usd and change strategy. Hodler takes unknows risk - up to 100% - for unknown profit. With hope that his analysis was good and data wasn't faked. He also don't have chance to learn to invest because after first buy decision there is only hodl
"trading is risky, holding is safer"
"when you are hodling you are not making that many mistakes"
"in trading there are much more possibilities to lose money"
"if you would buy ether for 1$ look where you could be now"
"Hodler is not affected by whales making pump and dump"
Let's discuss then how does investing time goes with risk taken (lets discuss only about risk).
Hodler strategy risk:
Hodler is buying coins by fundamental (whitepaper, team, code, hype, being unique in specific segment) analysis for very long period. Hodling is a strategy very often suggested for newbies in cryptos (when you are newbie than buy good coins and sell on profit after years - I heard it thousands time). What can go wrong?
1- whitepaper is just a document with words. It can be copied and change a little. Faked. I can create my own whitepaper in which ill write that tomorrow ill be on mt everest.
2-team can be faked with fake twitter account with bought followers
3- code - who of us can check if code is OK? How many of currencies have working code now? Most of them are just concept without working product jet.
4- hype can be bought.
5- being unique didn't give you certainty of being unique forever. 1 month after your investment there can be new ICO with better team, bought hype and with working product delivered faster.
6- you are newbie and you did fundamental analyst wrong or didn't do at all just jump after hype or because someone said that its great investment
7- there are 1600 coins. More than 1400 won't survive next few years because they are not necessary. Your decision must be precised and full of luck
What if any of above will happened? Your investment will continuously goes to 0. And if you are hodler you will never sell until there will be nothing to sell. When you are buying with hodler strategy you are risking 100% of your investment. I don't think there is more risky way.
Trader
Good trader have loved coins that he checked fundamental and trade on them. He is trying to buy low and sell high. When trade is not going how he planned it he sells. He don't w8 for coin to hit bottom to panic sell, he tries to sell on the rise. His risk is set by him by stoploss which is set in his trading strategy. And it depends on time period he is investing in and expected profits. He don't fallow pump and dump.
Time period:
When trader see good buy opportunity on 1d candles he has to set stoploss lower, he takes bigger risk then but possible profit is bigger.
When he sees opportunity on 5 min candles he can set stoploss even 0,5% under buy point risking only 0,5% of his investment.
Trader is taking known risk each time he enters trade and this risk i related to expected profits. When trades are not going well he can stop trading, lock money into bitcoin or usd and change strategy. Hodler takes unknows risk - up to 100% - for unknown profit. With hope that his analysis was good and data wasn't faked. He also don't have chance to learn to invest because after first buy decision there is only hodl
The risk of holding is when the price will not rise any more you lose at all. But the risk in trading also is when you don't know how to trade you will lose your money at all. It is so very risky.ln holding your token you have the Chance to multiply your capital if the price increase. While in trading you can save and earn in every trade if you know how to trade.
What you described is applicable, first of all, to new and little-known projects in which no one has invested for a long time due to too high a risk.
Now investors prefer bitcoin and altcoins from the top 100 of the list, and this, as you know, projects of a completely different level, and holding their coins is much less risky than trading.
Now investors prefer bitcoin and altcoins from the top 100 of the list, and this, as you know, projects of a completely different level, and holding their coins is much less risky than trading.
We choose what coins we will hold, and holding the most stable coin with great liquidity is always the best strategy when holding.
However, in the past when the altcoins market was still good, there are a lot of promising coins that already brings profit to investors and we were tempted to buy them and hold them, but now, they are significantly down.
Question is, are we still willing to hold?
Answer is simple, of course we should still, let us not look at the price but what the team are doing for the project to survive and to grow.
most investors decide based on what they see on the price, so they will never see the real value.
What you described is applicable, first of all, to new and little-known projects in which no one has invested for a long time due to too high a risk.
Now investors prefer bitcoin and altcoins from the top 100 of the list, and this, as you know, projects of a completely different level, and holding their coins is much less risky than trading.
Now investors prefer bitcoin and altcoins from the top 100 of the list, and this, as you know, projects of a completely different level, and holding their coins is much less risky than trading.
-snip-
Those point you gave about Holder strategy risk points are really meaningful. It's true for me that trade is risky than holding. And of course for those person who don't know properly about trade like me. But for good trader trade is the best option because they can profit more than holder with their trade strategy.
When we look out to make an earning we're supposed to take risk. This way there will be risk associated with each and every activity. When it comes to holding and trading of cryptocurrencies the risk is quite high as the market moves were hard to predict based on the way its been developed. Being professional will let the user learn and earn good out of trading which is possible only through continued practices.
Trading and holding are risky on cryptocurrency , even all included investing too but for me.. holding is very risky than trading because I didn't know how to execute trading on exchanges just know pump and dump of coin price , didn't know any strategy.
I holding some coins which around one hundred coins on my ERC20 wallet and few coins that I hold is dump now , maybe I didn't follow any update of their coin projects. Thats a sad moment on my life in cryptocurrency
I holding some coins which around one hundred coins on my ERC20 wallet and few coins that I hold is dump now , maybe I didn't follow any update of their coin projects. Thats a sad moment on my life in cryptocurrency
According to statistics, only 8% of traders constantly go into a plus, and now it is only 3%. It is impossible to become a trader in a day, a month, or even in a year. This is a profession that needs to be studied for a long time, including the first-hand experience, merging first deposits. Being an investor is calmer than a trader, but you need to understand that money is invested in the project today, and profit can only be obtained in even five or ten years.
Trading and holding are risky on cryptocurrency , even all included investing too but for me.. holding is very risky than trading because I didn't know how to execute trading on exchanges just know pump and dump of coin price , didn't know any strategy.
I holding some coins which around one hundred coins on my ERC20 wallet and few coins that I hold is dump now , maybe I didn't follow any update of their coin projects. Thats a sad moment on my life in cryptocurrency
I holding some coins which around one hundred coins on my ERC20 wallet and few coins that I hold is dump now , maybe I didn't follow any update of their coin projects. Thats a sad moment on my life in cryptocurrency
According to statistics, only 8% of traders constantly go into a plus, and now it is only 3%. It is impossible to become a trader in a day, a month, or even in a year. This is a profession that needs to be studied for a long time, including the first-hand experience, merging first deposits. Being an investor is calmer than a trader, but you need to understand that money is invested in the project today, and profit can only be obtained in even five or ten years.
Trading and holding are risky on cryptocurrency , even all included investing too but for me.. holding is very risky than trading because I didn't know how to execute trading on exchanges just know pump and dump of coin price , didn't know any strategy.
I holding some coins which around one hundred coins on my ERC20 wallet and few coins that I hold is dump now , maybe I didn't follow any update of their coin projects. Thats a sad moment on my life in cryptocurrency
Yes trading is risky not just of the high volatility but also because of a lack of strategy. We understand lossing in trading because it's normal, if we don't want to lose then stop trading, that's all. So we need to learn even 2 -3 indicators in trading so thay our money is not wasting, have a potential profit. I holding some coins which around one hundred coins on my ERC20 wallet and few coins that I hold is dump now , maybe I didn't follow any update of their coin projects. Thats a sad moment on my life in cryptocurrency
Of course a lot of depend on coin. If you choose coin with bad capitalization and low volume there's a big chance that you'll suffer from loses. Personally i prefer to trade with BTC and ETH. It's a relly reliable coins. But of course you have to be ready facing risks.
That's the main motive of many people out in the trading industry.
They go for the stable coins to invest.
And according to me it's a wise decision ofc.
Those coins have very less chances to fall or grow with huge percentage.
So it's better to invest in those.
Hope this helps.
This is well written, but I don't know how did you elaborate hodling, Risk is everywhere no matter if you are holdler or not. But the point is why people are afraid of "Risk"? Because many people think Risk is something that must be avoided on any cost but Risk can't be avoided in the financail market. What people need to understand is how to accept the risk; Remember that taking the risk and accepting risk are two different things. When people learn in a hard way they will understand that accepting risk is equal to accepting the cost of doing business. So accepting risk is the main thing to understand. The early you understand it the early you learn more about Markets.
Of course a lot of depend on coin. If you choose coin with bad capitalization and low volume there's a big chance that you'll suffer from loses. Personally i prefer to trade with BTC and ETH. It's a relly reliable coins. But of course you have to be ready facing risks.
That's the main motive of many people out in the trading industry.
They go for the stable coins to invest.
And according to me it's a wise decision ofc.
Those coins have very less chances to fall or grow with huge percentage.
So it's better to invest in those.
Hope this helps.
Risk is there with almost any and every trading strategy, so we can’t go with thoughts of zero risk. The thing we require to do is to work with sensible way and approach, as its only thing that could help us with gaining. I do it all super easily through simple way and approach, but if we try to do anything extra-ordinary, it’s not just unnecessary but most likely to cause the downfall. I keep it all simple with using just a few Crypto Trading Tools, as that’s enough to help myself with decision making.
Trading and holding are risky on cryptocurrency , even all included investing too but for me.. holding is very risky than trading because I didn't know how to execute trading on exchanges just know pump and dump of coin price , didn't know any strategy.
I holding some coins which around one hundred coins on my ERC20 wallet and few coins that I hold is dump now , maybe I didn't follow any update of their coin projects. Thats a sad moment on my life in cryptocurrency
I holding some coins which around one hundred coins on my ERC20 wallet and few coins that I hold is dump now , maybe I didn't follow any update of their coin projects. Thats a sad moment on my life in cryptocurrency
i made up my mind never to hodl back New coins/tokens because the original cryptocurrencies are already trending. those cryptos like BTC, ETH, NEO , RIPPLE, has already offers us the necessary requirements needed from cryptocurrency which was meant to serve a purpose of exchange for services just lie fiat.
Also, the second reason was when coins that i was hodling rolled back to Zero value( serve, hurify, stockchain token ,etc) it became obvious that the value of the current tokens are worthless. it is just Hype for a certain period of time and the top investors pull out their money leaving the project to die off.
Also, the second reason was when coins that i was hodling rolled back to Zero value( serve, hurify, stockchain token ,etc) it became obvious that the value of the current tokens are worthless. it is just Hype for a certain period of time and the top investors pull out their money leaving the project to die off.
Of course a lot of depend on coin. If you choose coin with bad capitalization and low volume there's a big chance that you'll suffer from loses. Personally i prefer to trade with BTC and ETH. It's a relly reliable coins. But of course you have to be ready facing risks.
If you are an experienced crypto user, you can deal with day trading, and you will have a chance to get profits very often. The benefits will be not great, but you will be in plus. Holding crypto, you need to be almost 100% sure that it has all the chances to Moonrise in the future.
Otherwise, it will be a useless decision. Bitcoin is the perfect crypto for trading and holding.
I believe, both of them have pros and cons. However, trading is a better option in overall, unless having a solid understanding of technical analysis and fundamentals of the coin itself. Since hodlers having the excitement of entering market when it is bullish but the thing is when they are hodling, they are not getting the chance to having experience of when to take profit. As a result, the risk of ending up with loss increases or missing better opportunity chances. They are exposed to more stress than traders when the coin, that they invested in, is crashing.
Of course a lot of depend on coin. If you choose coin with bad capitalization and low volume there's a big chance that you'll suffer from loses. Personally i prefer to trade with BTC and ETH. It's a relly reliable coins. But of course you have to be ready facing risks.
I can also go with low volume if I see it has a potential in the future, some of the good coins now started at a low volume, I still remember https://coinmarketcap.com/currencies/nano/, it's starting price was almost worthless but during the last bull run, it reached $34 before it dump at settled to $1 now, imagine how profitable we are if we hold thousands of that coin in the past, to be honest, I miss this one, I could have acquired it for free.
I believe that trading is on its own quite a risky way to make money. If you hold something too long there is a risk that it can lose it's value. If you newbie there is a risk that you can choose wrong time to bey/sell an assets and you'll lose your potential income.
If you are a newbie i think you can start with HOLD strategy. But don't be afraid of taking risks. I 've read an article provided by Monfex and there 're some useful points
-Do not decrease the margin level below 100%;
-Always use stop-loss orders. Make it an integral component of your trading strategy;
-Trade only liquid cryptos;
If you are a newbie i think you can start with HOLD strategy. But don't be afraid of taking risks. I 've read an article provided by Monfex and there 're some useful points
-Do not decrease the margin level below 100%;
-Always use stop-loss orders. Make it an integral component of your trading strategy;
-Trade only liquid cryptos;
Jump to: