Topic: Trade vs. HODL - avoid traps - page 4. (Read 1995 times)

Trading is a technical thing which is very difficult to do successfully and make a profit because there are many coins in the market, so it is the job of a professional trader to analyze when to pump which coin among them and this work is not possible for everyone. And this is why most traders lose while trading.
Holding on the other hand is a test of patience.  Holding is not easy for everyone but for those who have a lot of patience, holding is possible because to get something good from holding, one has to hold for a long time.  So I like your strategy because if you keep a coin in your holding and trade another coin it will make you forget about your holding so you don't lose patience.

I like @1miau points and they are very important so I want to translate it to my local Bengali language and inform my community about them.  @1miau I ask your permission

I run both, some of my coins are holding and some of my coins are trading. I have been trading since 2015, during which time I have never used an AI Robot.  Some basic reasons such as high prices, security make me continue to trade manually. I still feel comfortable today despite the ever-changing conditions. Maybe for those creators not users will feel comfortable because they master and certainly know, if you buy you may need to learn to settings and security risks that we do not know. Indeed, with robots we do not need to be afraid of uncontrolled emotions because we have chosen to stop loss or stop profit. IMO

Everything you mentioned is like the waves on the beach are always there and come all the time. but I also often hear traders convey other options besides manual trading. namely trading using Trading Robot AI. Does it work and reliable? The assumption is, if we have a high emotional factor by using an Robot tradingit will be adjusted to the current conditions in the end the increase in the value of our investment will increase from day to day.

Technical analysis doesn't catch exogenous shocks ever. This is the biggest issue about technical analysis. Even if assumptions from the past apply in the future, they only do for so long until they don't. Whatever technical analysis told Wirecard investors the day before it crashed, TA didn't tell them to sell because there was fraud going on behind the scenes. TA never told anyone to invest in the military industry because Putin is going to invade Ukraine. TA never produced strong buy signals for Pharma stocks even once shortly before the pandemic broke out.

TA is similar to VaR or CFaR and all of these techniques or measures have in common that they don't catch abnormalities. But abnormalities are more normal than the word itself would suggest. It is no coincidence that a common approach to calculate VaR or CFaR is to use random walk simulations. The name is the game, "random walk". These models assume that stock prices move randomly. Especially the VaR is used in the banking industry to calculate short-term risks (value at risk). Since it turned out that this measure is not good at catching the risk at the tails of probability distributions, the TVaR has also been developed where higher risk events get hypothetically included and yet it is based on coincidence/uncertainty.

TA would probably work if you have a long history and a never changing set of assumptions and premises that hold true. When someone is applying TA hoping that the set of the underlying historical data will continue to hold true in the future, it is nothing but a gamble. The less complex the potential impact of exogenous shocks is to a certain stock, the more likely it is that TA tends to produce better results. And with "better" I don't mean strictly positive results.

A HODLer is usually less prone to having a bad timing. Diversification and at least a reasonable balance between short-, mid- and long-term investments is more promising. If someone is fully into short-term trading, not really diversified and makes a very unlucky decision because his TA lines told him to do so, the trader is wrecked.

HODLers often times have a different approach right away. Someone who decides to HODL also decides to invest an amount that does not have to be touched in the near-term. A trader potentially is dependent on income from many short-term trades, but if that trader is stuck in a crash that could not be anticipated at all, it is at least temporarily game over while the HODLer most likely has more funds available on a monthly basis or even in the savings account.

TA, as I said, only works if the underlying conditions from the past never change in the future and as probably everyone of us has learned by now, that is just not how reality works.

This doesn't mean that the cycle will repeat forever, although we hope it does for a while.

TA, as 1miau said, is nothing more than pseudo-science, and a monkey with a crossbow would have better results than many self proclaimed professional analysts, because all the different factors that influence in Bitcoin's volatility cannot be controlled or predicted. Of course, some will have good luck and earn some money trading, but it will be more the result of chance than capacity IMO.

So correct considering my journey. I always lost when trading, and I recovered through hodling. Thanks for such a useful post.

Following the so-called influencers is a very big mistake that a lot of newbies commit these days, the influencers praise trading or particular tokens only for their own gains since they are either paid by the exchanges they promote or the tokens that they suggest buying, and those who follow their suggestions are more likely to lose money than those who take their decisions on their own.

You can obviously watch them and see what they are saying only for research purposes, and then do your due diligence before getting into a project and buying their token. Do it only if you are satisfied and not because some influencer said the token will be a success.

I doubt that it is an original idea from me.  I think that others have said that the term non-custodial is confusing, so I am just deciding to go along with an idea that I got from others who have been saying similar things.  Maybe I got the idea from Matt Odell, or it could have been from someone else or some other podcast in which there had been some concerns about the term that makes it sound like a bad thing... 

Actually for years, there have been governmental campaigns that try to make it sound as if non-custodial is a bad thing, and there are some goals to try to cause it to become difficult to move coins off of exchanges, and those kinds of requirements do have precedential value in terms of some retirement accounts that might not allow self custody, and even some financial consultants are not allowed to hold the coins of their clients, so they have to use various kinds of legally recognized custodians, and so in some sense the term "non-custodial" is being transposed onto bitcoiners, and you know even some financial advisors recommend that bitcoiners invest 40% into bonds or some other ridiculous ideas like that because by law they are required to do those kinds of things, and also financial consultants may also be required to reallocate assets from time to time or not to overly allocate into a "risky" asset, such as bitcoin.  So frequently, those kinds of "experts" will be giving similar kinds of advise to bitcoiners who go to them in order to "consult" about what might be a prudent investment approach.  Experts can sometimes become trapped by requirements that are imposed upon them including incentives that they have to earn fees, such as 2% fees, so we sometimes will wonder why "experts" do not want to invest into bitcoin becauswe they cannot earn  a fee on it, and they are not even able to custody the bitcoin, and they might even have troubles finding out who can "custody" the BTC that they invest for their client, and bitcoin allows for self-custody.. and surely self-custody is a BIG responsibility, and not everyone can handle self-custody.. and sometimes we might have too much "freedom" from self-custody and start to move our bitcoin around and to trade it, etc etc, so I am not even proclaiming that self-custody is the better solution for everyone, because some people may well need some obstacles in the way of their abilities to move their coins around too easily.. and therefore they may end up trading them, or using them as collateral or some other risky approach that they do not realize what they are doing rather than securing their coins.. and not playing around with them.


It could be tempting right?  Let's say for example that you invest 20% of your income per year, then after 5 years, you may well end up having a full year's income saved up (invested) into bitcoin, and if the asset (bitcoin in this case) has performed well (gone up 2x, 5x, 20x or even 50x), then it could become very tempting to want to do something with those coins... and maybe it would be a good idea to take some profits off of the table, and maybe not?  If you ONLY have invested into bitcoin, then it might be a good idea to diversify into other assets at some point (and I am not referring to diversifying into shitcoins.. that's a good chance of becoming a loser's game or at least diversifying into shitcoins is adding more risk onto an already risky investment and it is not even removing the investment category outside of the same category.. in other words, when any of us are diversifying, we should be trying to diversify outside of our investment area into non-correlated assets  - or maybe less correlated assets, and there is hardly any achievement of diversification if the investment is in the same category of investment and just into a more risky aspect of it )..

It is not necessarily a bad problem to have, but the problem of diversifying your investments likely does not come until after you have built up your investment portfolio for a while, and then at some point, you might have a threshold in which you start to consider that diversification of your portfolio needs to be considered... whether that is reaching 1 year's income or maybe once you reach several times your yearly income.. but there could be some practicality to diversify to some extent if you are feeling that your investments are too concentrated in one or two areas... and it is not always clear - because one thing that can be good is to have value into a liquid asset, but another issue could be how volatile is that asset. and then also considering in what kind of time frame are you going to be wanting to draw income or value from the asset. 

They are not easily answered by someone who might not know your details, and sometimes you might have to consult with someone if you are believing that you might be becoming too over allocated in one area or another, and it is good to have a plan in place prior to the asset making a price move that causes you to panic, so usually you would like to consider various price points on the way up that might cause you to shave out some value in order to diversify in to other asset classes... and sometimes you do not even need to sell any BTC, you just stop buying it and start sending new money to another asset class that you are trying to get exposure.

You never stop surprising me with new ideas every time I read your replies. really bad ass, but the term non-custodial is what I have learned from people in the forum. You gave a more befitting name to it🎯

Just as you have said, JayJuanGee, some people think trading is the best way to increase their holdings, so they go ahead and mess with their bitcoin, which is not a safe thing to do. Some one who want to trade instead, can leave their initial holding and possibly invest a different amount of funds specifically for trading; I think it is better to do so than trade with their Bitcoin holding. There is always this bad feeling after losing a big sum in trading—that feeling of wanting to recover the lost coin already and, in the process, ending up losing everything again. so it's just better to hold one's coin in a self-costodial wallet.

I am starting to feel that I am going to have to start to go on a battle of that stupid-ass term "non-custodial."  It is confusing and it sounds like a bad thing...

Fuck that term.. it sounds like something imposed upon normies.

I am going to start to use the term self-custodial.. ... and so perhaps the dichotomy is self-custodial, which is preferred versus held by third parties, which might have some benefits in terms of being afraid to manage your own keys or to make sure that you do not lose your coins, but surely what is currently called "custodial" is really custodial by a third party and not by self... and therefore is not as private and also is a potential loss of control of the coins or the value in certain circumstances....

Otherwise, in regards to the points about trading, I have frequently asserted that trading should not be used as a means to accumulate BTC, but could be used as a means to insure from volatility - however with an asset like bitcoin, it is not good to be fucking around (trading) with very much of your stash, so if there are decisions to sell small parts of the stash (asa form of insurance in regards to possible downside price movements, then there could be calculations that are made in regards to how much BTC can be sold upon various upward price moves, and maybe if BTC prices move up 100%, then no more than 10% of the stash would be "permissible" for selling.. and of course, each of us are entitled to work out what kinds of formulas we believe to be permissible (for our own situations) that might allow us to sell some BTC on the way up.. without running the risk of selling too much and running out of BTC if the BTC price were to go shooting up and then we have hardly any BTC or even no BTC.. and that would not be a good scenario to end up playing out for any of us who are proclaiming to want to get rich from deee cornz.


Many people are fairly easily led into the belief that they ONLY way to "outperform" the market is to sell and to buy back lower.... which is largely just a bunch of nonsense, because it becomes easy to get trapped into wanting to increase the performance of your product (BTC in this case), and without really appreciating that BTC is designed to pump forever, and even if it is not guaranteed to go up right away, BTC remains a very great asymmetric bet to the upside so long as any of us who invest into it buys and holds it without getting too impatient and also while realizing that the asymmetric bet to the upside is not guaranteed.. but still is a good bet.. which means it is a good investment.


It seems to be a trick to cause people to fuck around with an otherwise good bet.. which is buy and hold or buy and continue to buy (in a DCA kind of a way) until reaching a status of having way to o many BTC.. then it becomes easier to decide to start to sell some or to shave some off, once each of us have spent a decent amount of time to accumulate a lot of it and to largely be in profits, then we will realize that maybe we can shave a bit off as the price is going up... just for fun (or just because we can without even needing to worry about it very much).. maybe that point comes to us 4-10 years down the road, but perhaps it takes 20 years to get to a point in which we consider ourselves to have enough (or too much) BTC.


I doubt that both are good.

I think that everyone thinks they can just learn trading by doing it, and it must not be very hard, so they start to trade, and sure they learn along the way, too.

Buy and Hold is a better strategy, and sure trading (and selling) can be incorporated into a buy and hold strategy, but there are many temptations and ways to fuck it up.. and to end up with way fewer coins than a more pure buy and hold strategy would have allowed.

So there is nothing wrong with buy and hold, and there is nothing wrong with trying to learn along the way.. including what is the value (fundamental values) of the asset that you are buying and you are accumulating (in this case bitcoin).  Sometimes you are not going to be able to learn about the value of the asset that you are holding if you are fucking around with trading it as if it were some cheap thing (like as if it were a shitcoin or a penny stock, when it is not.. and sure on the face of it, the charts for bitcoin look just the same as any other asset, but that can really be misleading, if there is a lack of appreciation for the true value that bitcoin is bringing to the world in terms of it being an asset class like no other and really a generational (if not even a century long) break through in terms of an asset class that has a lot of design perfections in terms of it's digital scarcity that allows for transportation of value over digital means.. and very powerful and paradigm changing in terms of how value is calculated, verified and even stored (and potentially even transported over space and time).. .

So in some sense bitcoin is amongst the best (if not the best) of discoveries (inventions) that also allow normies to be able to invest into it.. as the most sound of money that the world has ever seen that has the potential (and has already been contributing to increases of value for humanity) to improve incentives in regards to how money is created and calculated in societies without middle-men being able to manipulate it (even though surely on the surface there are going to be a lot of attempts to weaken and kill bitcoin), so if you want to fuck around trading the best asset that man has ever had, then good luck with that... you are likely going to need it.. unless you are already starting out as rich, then maybe you don't mind fucking around, but if you are trying to become rich then you should be striving to work on strategies to build the size of your stash of the asset (BTC) that is the best that the world has ever known.. up until now..

This is a perfect chart to interact from a better perspective Miau!
The whole idea isn't for grown Ups in crypto, it's actually for 'em rookies right? Cus I feel alot of peeps, with proper fundamental analysis, do trading professionally and it works for them as well.
It's actually gonna look like a scam to anyone that doesn't have a proper understanding on it... Trading is good, but HODLing is safe! Whichever way you choose, just make sure you're not too desperate and greedy, cus that's where the problem comes.

Sandra 🧑‍🦰

It is better you do one at a time if you don't know how the market works. Holding is more difficult than you may think if you have never hold during the market turbulence when the price of cryptocurrency is falling and rising putting you in different state of mind, thinking of whether to sell or hold.
Trading is an act and is not something everybody can do. There are people that specialize in trading and for them to keep having a good result, they have to be in the system for long to be able to have concrete understanding about the market.

I'd say that people have an interest in trading because of what they see on the internet as some traders encourage people to trade. Yes, many have tried and failed, they'll think that it works too easily.
In fact, I was trying this before together with one of my friends, and guess what, I fail while my friend become successful. I was wondering why even if I ask him what he did and follow what he said, I'm still losing. Now I realize that even though these influencers will show us what they do, it won't give us assurance that we become successful and be like them, and this is because we have different decisions in every situation.

The goal of Bitcoin is to give you financial sovereignty and complete freedom/liberty with your funds. The early adopters like Satoshi and the others didn't buy Bitcoins, they mined all the Bitcoins they had back then, it was not hard for them to do so, but it was impossible for them to exhaust the fixed supply before Bitcoin accrued value and mining became more difficult and sophisticated.
Hodling entails being your own bank, and that does not come easy, it comes with quite a lot of responsibilities that many people fail to have, that's why people find it pretty difficult to be their own bank, either they send their funds to exchanges or they make mistakes keeping their seed phrase, my point is basically that hodling isn't easy and people should be well prepared and learned before they start hodling.

As a rule, most altcoins, with the exception of a few TOP altcoins, are suitable only for short-term trading. Accordingly, those who try to hold altcoins will eventually lose their money. So hodl came to us from Bitcoin and, accordingly, remains the most reliable coin for this.

Your points are well-made, OP. After trying trading several times in the past and failing, which caused me to experience a little bit of financial difficulty, I finally realized my mistake.
Hodling has the lowest level of risk, despite the fact that they both carry some risk, because you can sell when the bull market arrives if you don't have any urgent financial obligations. Thanks, Op

This kind of thing does happen very often and it seems that it is not only you who do it but most people must also have experienced it even if not for the whole.
We are too focused on price so in this case of course choosing a lower price is always used as an excuse to get a large profit even though this only becomes false and actually misguided and makes us a little lost.
I'm not saying that everyone who is in altcoins is wrong because that is their choice but in this case I would rather suggest continuing to be in bitcoin because it is clearly very much more viable.

On the other hand DCA is definitely one of the good things and for now I am also still doing it because it is like it has become an obligation at least for me

Both trading and holding involve a certain degree of risk. Holding can result in two outcomes: either the value of the asset increases as the team continues to develop the project or it collapses if the team becomes less dedicated or when investors lose trust in the project. Similarly, in trading, when a market is long with the expectation that its value will increase, the prediction may come true, or it may be reversed due to unforeseeable circumstances beyond the trader's control. Despite the inherent risks, holding has shown to be a relatively safer and more profitable investment strategy, particularly for those with limited capital.

Trading must have more skills because it doesn't only require one pattern or other technical, sometimes more must be combined in order to be able to predict trades in an accurate direction, of course this is all the complexity that exists, therefore I am also now more focused on holding bitcoin will have a low risk because you only need to buy and then hold and this only requires a strong hand and patience in building a portfolio throughout the year.

Maybe people are free to do what they want related to making profits in crypto trading, I have never banned anyone but ourselves that holding BTC will be much better in the future, now it will be even stronger if we are excited to make efforts in the bitcoins we have in a wallet that we control.

I am not good at trading Bitcoin, so I discovered I am a good holder, and holding has a low risk compared to trading. Most people have even lost all of their Bitcoin through trading because of either high leverage, greed for the quest to make more profit, or the trade failing to end in the predicted direction. All it takes is to hold my bitcoin in a non-custodial wallet and give high security measures to the wallet and my private key, but in trading, one need to be active, analyze the market, read a lot of crypto news, and still risk your crypto assets to make a profit that may sometimes end in losses. So I will just hold rather than risk my asset.