Topic: risk in hodling and trading strategy - page 7. (Read 26390 times)

Hodling was supposed to be a sure way of making profit in the cryptocurrency market or in any other similar market. But as we have noticed in recent times, it is a strategy that has not worked for some existing investors whom the market is still currently against. The risk involve in this strategy is that there is no certainty to the existence of cryptocurrency and likewise, there is no prediction to how high the market can grow or to how low it can fall.
But on a final note, hodling is a risk worth taking in trading, when you have a low entry point.

Everything is very risky here in crypto. The reward differrence of two is that trading will only give you a small percentage of profit but holding can give 100x - 1kx of return in the future and we are talking about 2-3 years of span. Holding not really go well for 5-10 years because it can be surpassed by a new brand that has a better marketing and latest system.

totally agreed. holding ICO tokens of a silent project is one-way-ticket...

When you want to be a Hodler, you have to be very confident about a coin. Without confidence, we will suffer losses, because if we choose the wrong coin, we will experience regret. While trading will be much safer, this is because trading is usually done in the not too distant future. In trading we try to gain momentum to find the margin between the price of buying and selling coins that we have.

People who do not have risk taking capacity should ideally be away because their is a huge chance of making losses as crypto is being very volatile. If people do not have patience it will lead to panic selling and in the end they will make losses for them self.

For those people in weak hands also sell immediately their altcoins in low price so its better to make other strategy if their are some issue of holding coins.

The best strategy is just to hold, you won't see any issue if you believe on the coins you are investing.
If you are for long term investing, you should act accordingly because if you fail to implement your strategy, there's no chance for you to be successful.
I usually see people who are saying weak hands will dump, well that's true because in my life as an investor, I was also a weak hands.

Ive seen many times on this forum statements like:
"trading is risky, holding is safer"
"when you are hodling you are not making that much mistakes"
"in trading there are much more possibilities to loose money"
"if you would buy ether for 1$ look where you could be now"
"Hodler is not affected by whales making pump and dump"

Lets 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 sugested 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 possibly go wrong?

1- whitepaper is just a document with words. It can be copierd and change a little. Faked. I can create myown whitepaper in which ill write that tommorow ill be on mt everest.
2-team can be faked with fake twitter account with bought fallowers
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- beeing uniqe dasnt give you certainty of beeing uniqe 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 fundamential analys wrong or didnt do at all just jump after hype or because someone said that its great investment
7- there are 1600 coins. More than 1400 wont survive next few years because they are not neseesary. Your decision must be precised and full of luck

What if any of above will happend? Your investment will contiously 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 dont think there is more risky way.

Trader

Good trader have loved coins that he checked fundametaly 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 dont w8 for coin to hit bottom to panic sell, he try to sell on the rise. His risk is set by him by stoplos which is set in his trading strategy.  And it depends on time period he is investing in and expected profits. He dont fallow pump and dump.

Time period:

When trader see good buy oportunity on 1d candles he has to set stoploss lower, he takes bigger risk then but possible profit is bigger.
When he see oportunity on 5 min candle 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 wasnt faked. He also dont have chance to learn investing becouse after first buy decision there is only hodl

For those people in weak hands also sell immediately their altcoins in low price so its better to make other strategy if their are some issue of holding coins.

For those people in weak hands also sell immediately their altcoins in low price so its better to make other strategy if their are some issue of holding coins.

all their judgments are wrong. That evidence is the collapse of crypto in 2018. Bitcoins fell from $ 20k to $ 3k3. And is that considered a good hold strategy? they were wrong!
Our market is always volatile and we need to be vigilant. We need stop-loss orders to prevent losses.
Hold will only make us lose everything or lose a lot.