Difference between trading and hodling..!
In the space of these few months, I've taken time observing those who trade cryptocurrencies and those Hodl them. It's not easy differentiating them especially when you're starting to get in on the "Crypto" game. So I'll be showing you an idea of the pros and cons between trading and hodling.
Trading
So what's trading? I couldn't say I know a lot about trading, but I do know that it's buying low and selling high, or you can "long" and "short". Anyway, I'll just start with the pros and cons.
Pros
Trading is good if you are an experienced trader with a calm and patient mind. The profits from trading are limitless, it all depends on your analysis and careful buying, then selling. Let's say if you have $10k as the initial capital and you make 1%-3% from each trade. That's a $100-$300 from each trade! Then imagine you making the right decision for a few more trades ahead, you'll even earn up to almost $1k and that's a lot more than what most people earn in a day!
Cons
Now, while all that I've said above is the "beautiful" pros. I'll turn to reality now and expose the truth, and it may hurt. While earning close to $1k or even more may look good, the truth is, while you're able to earn that much, depending on the market and your decision. You're actually at a risk to lose as much as you'll be earning. Nothing is perfect, to be able to earn what most people couldn't, you gotta be prepared to risk losing as much too!
Hodling
You ask me what's "hodling"? The truth is I don't even know the true meaning of that, I only know that it's buying and holding for as long as you deem fit.
Pros
The pros of hodling aren't that much visible, but I can guarantee it's a sure win solution. Why? You may not see many changes in the short term because those crypto prices may be stable for quite a long time before they go 100%, 1,000%, 10,000%, or even 100,000%. As long as you do sufficient research about what each crypto does and in what directions it's going in the future before you hodl it. You'll one day be a winner.
Cons
While the risk of losing in hodling crypto isn't much, it's still there. If there's not enough research on the aspect of the crypto or how trustworthy it is. You may risk your crypto going to zero. Yeah, what I mean is total zero! Another con is that if you don't diversify your funds and hodl all of it, you'll miss your chance to buy the dip!
Trading VS Hodling
I just say this from my perspective then. Weighing the pros and cons, I prefer hodling, I prefer having more time to think about other things like earning more money to put more into hodling, starting a business, family matters, etc. But then coming to think of it, I'll suggest diversifying your capital into 60% hodling 2 to 5 of your favorite coins, 20% into trading/learning how to trade/acquiring experience trading, and the other 20% would be cold hard cash waiting to buy the dip. With this method, you'll not be missing any opportunity, whether it is prices shooting up, the "Dip", and the lesson you'll be learning from trading.
This is my first blog, and I plan to improve again, be it my grammar or my choices of words. I do accept criticism, so advise me however I need to improve.