First off, I would like to say that I hate the word hodl.... If you don't understand what it means ask me in the comments and I'll explain it.
Holding long term and buying low/selling high are two different trading strategies. Neither one of them is necessarily better than the other. It comes down to deciding which is best for you.
The buying low/selling high strategy is best for maximizing your profits. It is also, however, the best way to lose a lot of money. To be successful with this strategy you will need to accurately predict the probability of the price going up or down at any given time. For example, bitcoin is currently trading for about $7100. Is it going to go up or down by the end of the day? By the end of the week?
The other thing you need is to get rid of your emotions while trading, specifically fear and greed. If you let your emotions override your logic, you might buy when the price is shooting up or sell when the price is tanking. This is what most people do and it is why most people lose money while trading.
One of the best ways to counter your emotions is by writing down exactly when you plan to buy or sell and stick to it no matter what. For example, I buy bitcoin at $7100 because I think it will go up. If it goes down to $7000 I will sell it because it is not going up as I expected. If it gets to $7500 I think that it is close to the top so I will sell it. Now stick to that plan until you sell. (I do not recommend these specific numbers, I just made them up on the spot) You can make your plan more complicated with things like a trailing stop but I won’t get into that at this point. The point is to make a plan and stick to it and then learn from your mistakes over time.
If you are not very good/don’t want to learn how to trade like this but you still believe in the investment long term then just holding is a better strategy. This way you don’t risk buying and selling at the wrong times (like most people do).
Short answer: If you aren’t a good trader you will lose a lot of money by trying to buy low/sell high and you would be better off just holding it for the long term.
What are your strategies? Do you hold or trade?
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Hi @littlejoeward....Firstly I simply do not have the necessary time to spend analyzing trends and crypto characteristics sufficiently to trade with confidence; secondly my volume is so minute that the profits compete with the cost of being online - some exchanges, like Bitfinex seem to be frighteningly bit hungry. So I mostly just hold a selection of coins that seem reliable.
Do you by any chance have a list comparing the broadband consumption rates of different exchanges?
And I have by the way not given up on my project - just been diverted offline a lot...still working out ways to make it work, motivated by the dire need for something like this by literally billions of people all over the world.
Cheers!
Interesting, I've never thought about that. I'm assuming that you are talking about your internet data. Do you have to pay per Gb or something? Unfortunately I'm not sure how to know how much data each exchange uses...
Thanks for the reply @littlejoeward.
Data bundles cost between $4 and $5 / GB around here. That is the mobile service variety I have to resort to. It is not prohibitive, but you have to keep your eyes on the fuel gauge. And if you are just analyzing the market, you lose!
That's an interesting constraint I've never thought about...