If you're a day-trading wizard and can double your crypto holdings every week by cherry picking the perfect trades, then this post does not apply to you.
However, if you're relatively new to cryptocurrency investing, then you know how difficult it is to time market moves.
Rather than holding your cryptocurrency through the ebbs and flows of the market, trading and predicting price movements can net you impressive gains. Take these two scenarios:
Trader:
*Buy 1,000 Antshares @ $1
*Sell @ $10
*Rebuy @ $4
*Sell @ $10
You would come out with $25,000.
Hodler:
*Buy 1,000 Antshares @ $1
*Ride through the ATH and correction
*Sell @ $10
You would come out with $10,000.
Based on this example, it looks like trading your crypto to maximize gains is THE way to go, right?
Wrong.
Why? Because this scenario is an absolute pipe dream.
Almost NOBODY can pull off what we saw, perfectly calling the peaks and troughs of the Antshares chart. In fact, studies have shown that only 9% of active traders make a profit, meaning a whopping 91% are losing money.
So, if we were to take those two scenarios and make them a bit more realistic:
Trader:
*Buys 1,000 ANS @ $1
*Sees $2, thinks a correction is imminent, sells to try to pick up more cheaper tokens.
*Misses out on the run to $10.
Holder:
Buy @ $1, hold to the MOON! Jokes, but you get the point.
But seriously, live is usually better as a holder, and not solely because it's generally more profitable.
The real reason why holding is more effective is because there is infinitely less STRESS.
Trading is STRESSFUL, whether you're making $100,000 per day or losing your ass.
Your eyes are constantly glued to the charts, using this that and the other method to pinpoint exact entry and exit points to maximize your gains. Blockfolio is refreshed at least 50 times per day on your cell iPhone, and you start to sweat if you can't access prices for more than 15 minutes.
Yes, if you're good at it, you can make more money trading. But if you factor out how much you're making per hour of time invested into crypto research and charting, the most skilled traders still can't beat the laziest holders!
90% of the work of a holder is done by the time they purchase their crypto. After that, it's just letting their holdings sit until they are comfortable letting them go.
The trader's job is only starting when they purchase their first tokens. They must then do extensive charting reports to predict future price trends, actively engage with the community of their crypto to see what general market sentiment is, and then of course place their trades.
This isn't to say that a holder doesn't have to keep up with market trends as well, they just don't need to be as active. If you believe in the future of the cryptocurrency market as a whole, then you really only need to worry about if your crypto is going to suffer a catastrophic failure: the team dissolves, key investor money pulls out, a crucial contract is dropped etc.
Other than that, hold for your dear life, and just check the markets for fun. Don't stress!
I hope this post was able to deter at least a few people from trying to trade their crypto without getting properly educated and trained in the field. Learning chart dynamics takes years to master; the pros can barely beat the indicies on the stock market.
If you want to make the most moon gains with the least work in crypto, just buy and hold for dear life. There will be scary times, as we've even seen in the past few weeks, where everyone is calling for the death of crypto and FUD is everywhere.
If you're optimistic on the future of the crypto market, use these bloody red days to pick up cheap tokens.
Happy hodling! This is my first article, if you have any advice or criticism let me know!