Trading and Holding

Trading and holding are actually two major methods of investing and earning profit from cryptocurrencies. These terms may not sound new to any Trader as this is done by Traders and investors on a daily basis once ability to trade a particular asset and hold that assets due to market volatility may end that trader profits or may not. In this post we will learn what it actually mean to buy and hold, spot trading, leveraging and the isolated and future trading.

I will start by giving an illustration to emphasize main point so we can all understand what it means to buy and hold and also trade. Bossj23 retired from a company work and decided to make order retirement plans with the money he has. He had options like investing into real estate but it seemed complex. He wanted to trust the insurance company but he didn't want to stake his future on the integrity of someone else.

He then later met a long friend who used to earn equally with him. He was shocked that his friend is now financially stable compared to before and is now any more than he is. He sought to know the secret and later found out it was crypto. His friend told him they are two ways people made money from crypto. It's either they buy and hold of which he did and became the person he is today or from Trading. He made up his mind to invest in crypto but how will he start and what will he do?

HODL is actually the acronym used to signify the word hold. It simply means acquiring crypto assets by buying it, exchanging it, mining it or the likes of them and leaving it in your wallet for as long as you want in as much as you've set a target price. In this case, despite the Volatility of the market, you'll still hold and won't be affected by panic-selling just like bitcoin is reducing now.

This requires a lot of patience because there will be heavy dumps, dips, downtrends and fears in the course of holding. The pressure to sell to avoid losses would come. Most people end up selli with less profit as they can't hold before the stipulated time. There's a saying, Hodlers always win. There's always light at the end of a dark tunnel.

A lot of people don't know that wallets do not actually hold any cryptocurrencies, rather there are equipped to perform transactions. I'll explain this in my subsequent posts.

Selling cryptocurrencies means exchanging them for fiat or another crytocurrency. There are lot of reasons why many sell their assets instead of holding it. This is because they have emergencies and need the money. Some sell because they have reached target profit levels. Holders sell for only 2 reasons. Panic and strategy is one of them. Holders use the buy low and sell high strategy to increase their portfolio size.

Example: When bitcoin was $15k as of April, 2023 if I'm to guess well. Those who bought bits of it or a whole would actually be in profit now as bitcoin is sold at the rate of $40k.

Another example: Bossj23 and chukwu10 buys 1000 steems each at $0.1. Steems goes on a bull run and hit $1 and there is a resistance level there. Bossj23 sells at $1 and have $1000 now. Price drops to $0.5 and Bossj23 buys again with the money this time, not 1000 steems but 2000 steems.

Chukwu10 on the other hand watched it fall from $1 to 0.8, 0.6, and then 0.5, he decides to fear losing more so he sells at least he'll be in profit of $400. Three weeks later, steem breaks the resistance and hits $2. Bossj23 that bought 2000 steems and held now has $4000 from the $100 which is 1000 steems worth $0.1 then of which he earlier bought. The difference between these two is that one sold with a plan band the other sold out of fear.

In conclusion, we've come to understand what the concept of buy and hold mean in Crypto. You'll always be at the profiting end if you're patient enough to wait for these increase.