 HODL versus trading which one is more profitable if you've been in the crypto space long enough You've probably heard the term HODL or seen some HODL memes by now whether it's HODL Diamond hands hold the line This all originated in the crypto space, but on the other hand I'm sure you've also heard and seen of People trading whether the price of Bitcoin goes up or down and making profits on both sides So should you be hodling or should you be trading? What's right for one person might not be the right answer for the next person So let's go ahead and talk about it today Hey, what's up, Jay here and welcome to Bitcoin Daily bringing you guys the best tips tutorials and Ideas to help you guys become profitable and successful traders The goal of this channel is to empower you guys with the resources and knowledge to help you guys get to that next level So if you guys are new here make sure to subscribe and turn on the notification bell Also, don't forget to smash that like button. So HODL versus trading Let's talk about it. So I'm talking about HODL versus trading before we even get into that conversation Let's first talk about just investing overall and buying Bitcoin overall. Here are a few things to note when buying Bitcoin It's not a good idea to borrow money via Loans to invest in Bitcoin or other crypto currency It's even a worse idea to purchase crypto currency with credit cards as they will charge you cash advance fees Which usually carry a higher interest rate next don't invest money that you can't afford to lose The majority of crypto currencies are not going to survive if you're invested in a cryptocurrency that goes to zero You're not going to get bailed out. You're not as lucky as banks or airlines So make sure to conduct extensive research on the coins that you're looking at and be careful of Recommendations that you find on social media that includes YouTube Instagram Twitter and any other message boards that you might be looking on especially Reddit So let's talk about HODL the long-term strategy. So what is HODLing? HODL itself is a cryptocurrency slang which originated when a drunk Bitcoin talk user made a post where he misspelled hold in the face of falling Bitcoin prices back in 2013 HODL is Essentially a long-term approach where you purchase and hold Bitcoin and other crypto currencies without regard for the short-term Fluctuations in price it involves holding the investment for a long-term period or until another condition is met This is the lowest effort and easiest strategy to adopt It's based on the assumption that the price of Bitcoin and other crypto currencies will see a rise in real value Over the long-term time period this approach completely ignores short-term volatility Which is an inherent feature of the cryptocurrency markets Even if the price of Bitcoin drops off a cliff Investors committed to the HODL strategy shouldn't do anything unless the fundamentals have changed So the whole idea for HODLing is to keep it simple but not stupid Despite its simplicity HODLing shouldn't be go-less. You might want to consider the following points The first question is what crypto currencies are long-term winners as I've already touched on most crypto currencies are Probably going to collapse their solution might become redundant Another cryptocurrency might do a better job critical members of the team might leave the project Etc. There's a million reasons why cryptocurrency could fail and go to zero if you're intending to HODL a cryptocurrency for the long-term You need to be confident about where you're putting your money and have a rationale for why it'll increase in Value next how are you going to invest? You have a few options to consider here You could invest in chunks whenever you want regardless of what the price is aka dollar cost averaging You could determine price levels you'd be happy to buy into your crypto currencies at aka by the dip or you could just set up Automatic regular investments into your chosen cryptocurrency again dollar cost averaging You don't have to pick one path. You could do a combination of all of the above next What are your conditions for pulling your money out? This is very very important When you invest money into anything you'd likely have aspirations that it'll grow into real value But when are you going to cash out and realize those profits? Are you going to cash out in five years? Ten years, or is there a specific price point where you'll cash out instead? You can also determine what percentage or fiat value you draw out under certain conditions Your cryptocurrency investment could go the other direction, too If you're not prepared to lose all of your investment then you need to set up a predefined market condition where you will exit So let's ask ourselves why might you huddle most people huddle if they don't have time or motivation to actively invest in crypto currencies and Maybe they just want to easily gain some long-term exposure to projects that they care about Maybe you just want to invest in some crypto currencies Which you think have a strong long-term potential or maybe you just aren't confident in your technical analysis Abilities and you have really no interest in learning how that works. So next let's talk about trading the short-term strategy So what exactly is trading trading is a short-term approach where you're looking to maximize your returns and beat any gains Which could be achieved just by holding this is a high effort approach, which can be time intensive It embraces the volatility of the marketplace as price fluctuations offer the opportunity To profit from drastic changes and prices over short time periods This is the opposite of the long-term strategy Which I defined before which looks to evade short-term volatility in order to trade You need to have a level of technical analysis ability You need a firm understanding of how the market works You also need to put time into monitoring the market and searching for opportunities that you can take advantage of Because at the end of the day crypto currency markets are fast moving and always on All righty guys So I hope so far you are enjoying this video next We're gonna dive in a little bit deeper into trading and then we're gonna talk about Whether you should hold or hodl long-term or if you should Bring trading into your system as well. If you guys are enjoying this video so far Make sure you hit that subscribe button. Make sure you smash that like button as well So next let's talk about rules and discipline of trading So when trading the first thing you have to figure out is where's the opportunity? You need to look for what crypto currencies have short-term and medium-term potential The cryptocurrency market is massive. There's more than a thousand projects listed on coin market cap How will you find or know what coins to trade? You need to decide that based on your edge and criteria for trading a currency for me I like to stick to high volume and high market cap coins and trade strictly based on technical analysis I mostly focus on trading Bitcoin and Ethereum You have to remember that if you try to trade too many coins You're gonna be spreading yourself way too thin and in direct result. You will be less profitable over time So focus on only mastering and trading a handful of coins because remember that a jack of all trades is a master of none So the next thing you have to figure out is what is your trading plan before entering any trade? You need to know exactly where you're entering and why then you must also know exactly where you're exiting when you're wrong Because let's face it. You will be wrong many many times Of course We also have to know exactly where we're gonna be taking profit when we're right once you have that figured out Then you need to incorporate your risk reward and position sizing to tie it all together So by now you're probably saying man, this sounds just way too complicated Why what are you in trade? Hotdling is just so much easier, right? So one of the reasons why you would trade is because you're confident in your own technical analysis ability And you want to leverage it to generate a bigger return on investment another reason why you might look into trading is because you have the spare time to search for Opportunities and monitor the fast-moving cryptocurrency market with the right system and roles You won't have to spend much time watching the market another reason why you might trade is because you have a decent amount of Capital which can be leveraged to generate sizable gains from small percentage movements better yet Once you're a profitable trader you can leverage that capital to make even more gains on small moves aka trading with leverage if you've been hodling this year you're up a hundred percent so far in Profit, but if you were trading every rise and fall You'd be making profits on both sides of the market and if you use leverage you'd be making even more So this brings us to the final question What should you do the right answer all depends on your circumstances? circumstances Motivations and goals what's right for one person is the exact opposite for the other person 99% of investors in crypto have been profitable hodling and 90% of traders are not profitable So let me start this by telling you what it is that I do So keep in mind that my portfolio is constantly changing at any time I could be holding about 30 to 50 percent of my investments passively in Cryptocurrencies that I think have long-term potential and are safe bets. So for that part of my portfolio, it's mostly just Bitcoin any theorem I'm not really looking to do anything with this bunch for a few years regardless of what happens short term But of course depending on the market cycle, I could be taking profits I could be pulling some of my position out, which is what sometimes my portfolio my holdings for Bitcoin a theorem could be as low as 2025% next I use about 5% for medium term bets or just lottery tickets Basically coins that I think are undervalued or just very volatile if I think a cryptocurrency is overvalued I might take everything out and keep it liquid so that I can take advantage if and when the market corrects next I use about 20% on the other top 10 market cap coins and any other projects that I really really believe in with these I do kind of the same thing in and out of them depending what part of the market cycle We're in and how high or down it's gone. So when it gets really really high and hits those all-time highs I'm usually taking profits on Some of the positions and when it drops down then I'm putting that money right back in remember that there is always Pullbacks and cryptocurrencies next I use about 20 to 30 percent of my portfolio to actively trade the markets Keep in mind that I've been actively trading markets for over seven years now And I've actively been trading Bitcoin for about five or six years. So if you're just starting out I recommend this number to be a lot smaller and finally I try to keep about 10 percent of my portfolio in cash To buy the Dip I recommend that you guys always keep part of your portfolio in cash So that when there's a pullback you can throw it all in This is why it's important to always take profits. So the bottom line on Hottling versus trading if you don't have a lot of experience You should enter crypto investing and or trading with caution a conservative and cautious approach Involves averaging slowly into positions and out of them if you do this you limit your risk Remember successful investing is all about managing your risk Hottling is easy, but has some serious logistical problems Especially for those who go all in at the top or who huddle through every all-time high Trading is harder and has more pitfalls to watch out for but it'll set you on a path where you will be Conditioning yourself to do what you'll need to do eventually That is buy and sell at opportune times to realize profits over time Given this we can say that a slightly Twisted version of huddle where you average into and out of positions is the most beginner friendly strategy as one Progresses in their journey. They're going to want to be able to trade effectively It can make sense for even an inexperienced investor to ease into trading out of the gate If you're going to trade start off with small trades like less than 1% of your portfolio per trade And no more than a few trades per week Make sure to use stop losses and start learning about technical analysis We have many many tutorials on trading in our trading tutorial playlist If you can get down the basics like how to tell a bear market from a bull market and what sort of targets you're looking for to take profits or To buy you will start approaching a point where a buy and hold Everything only strategy will likely no longer be your best choice That is to say almost every cryptocurrency investor will benefit from Refining both a long-term huddle strategy and a shorter term trading strategy Huddle might be the best strategy for a new investor But by the top and huddle to zero is actually one of the worst possible strategies that I can think of since this is true We can't just fall back on huddle period We need to have a slightly more personalized strategy that accounts for the reality of things That reality being that most will get into the cryptocurrency market late and Huddling will simply mean exposing themselves to the pressure to sell over time. Alrighty guys I hope that you guys have enjoyed this video and really understand now the difference between huddling and Trading and are able to make the best decision for yourself If you guys have enjoyed this video and found of value in the content that we just provided for you guys Make sure to hit that like button Make sure if you guys are new here to also hit the subscribe button and turn on that notification bell Remember that we post five times a week on Mondays and Fridays. We do market analysis Tuesdays and Thursdays. We do reviews tutorials and market news updates and on Wednesdays We do live streams where we just talk with you guys. Thank you guys for watching this video and tuning in to the end I'll see you guys on the next video as always peace and love