HODL or Trade Crypto: A bold comparison
Its 2022 and nowadays a lot of people want crypto to be in their investment portfolio. They get confused on what to do, should they HODL(HODL means hold in crypto industry) or trade crypto?
Today’s article is going to make you very clear about the differences between the two and what can be the better one for you.
The best thing is that we can both HODL and Trade at the same time, in this article I will tell you what you should do as a complete beginner. So let’s begin!
What is HODL?
HODL simply means hold, so in HODL we would just hold one cryptocurrency by simply buying it and leaving it, letting it do the job for us, in this we don’t need to analyze much stuff but just directly buy and leave it.
The best thing about HODL is that this way we don’t have to do anything so it’s basically the realistic definition of passive income, in this we just focus on long term goals.
“If you don’t find a way to make money while you sleep, you would have to work until you die.”
Which means, that when we HODL if the price goes down short term we don’t care for that, but we focus on the potential that it has in the long term, which means in the next couple of years.
HODL is the most safest form of investing in crypto, as if we are selective with what assets we buy, we don’t have any chance to loose all of our money, and in the long term we get unlimited potential.
What is Trading?
In this article I talked more about What is Crypto Trading specifically………
Trading is a method in which we can use short term price movements to make money, the most common thing that day traders do is that they buy when the price goes low and sell when the price goes high, so that they make money in during short term price move, this method is known as spot trading.
There is also another form of trading which is futures trading, click here for a full article about futures trading.
The benefit that we have with futures trading is that we can first of all magnify our profits to a way higher amount with leverage and we can literally make money when the price goes down! So you make money when price goes up and also when down, that’s the sweetest thing about trading.
5 Main Differences in HODL and Trade:
- HODL is focused on long term price movements, but trading is more focused on short term price movements.
- HODL is completely passive, but in trading we have to work actively to make consistent profits.
- HODL is very simple but trading is very advanced and requires a lot of experience.
- HODL is way more safer, trading can make you lose all your money even.
- HODL has a lot of potential for capital gains, but trading magnifies that to much more than HODL.
Do you know it’s possible to do trading passively as well? Click here to know more!
Is it better to HODL or Trade?
So from what you’ve learnt so far, you would had realized that both of them have their own pros and cons, but now the final question comes that is it better to HODL or Trade?
The most logical answer will be that, none is better than the other.
So, I would say that doing both of them is the most profitable and safest way of making money from cryptocurrencies.
But one thing as a beginner you need to remember is don’t invest all of your money into crypto, make sure to diversify your investment portfolio, I keep 60% of my portfolio in crypto, but I’d recommend 20% to beginners.
Click here, to learn about how to be profitable in crypto trading and how not to get scammed!
So after reading this article, it would had became very clear to you that should you HODL or Trade and what are the differences between the two. IF you got any questions ask them in comments.
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