If you don’t have a lot of experience, you should enter crypto investing with caution. A conservative and cautious approach involves averaging slowly into positions and out of them. If you do this, you limit a lot of what can go wrong!
From there it is about choosing between HODLing and trading.
HODLing is easy, but has some serious logistical problems (especially for those who go all in at the top or who HODL 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 nuanced version of HODL (where you average into and out of positions) is the most beginner friendly strategy.
However, as one progresses in their journey they are going to want to be able to trade effectively. Thus, it can make sense for even an inexperienced crypto investor to ease into trading out of the gate.
If you are going to trade, start of with small trades (like 1% of your portfolio per trade and no more than a few trades a week), use stops, and start learning about Technical Analysis (as understanding longer term trends is vital for both short term trading and entering and exiting long term positions).
If you can get down the basics, like how to tell a bear market from a bull market and what sort of targets you are 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 HODL strategy and a shorter term trading strategy.
Thus, and to the main point of this article: people are generally right when they say HODL is a better strategy for the inexperienced investor, but the claim is a little misleading, as trading is rather important and teaches one a host of skills that will help ensure they find success with both their long term and short term investments.
HODL might be the best strategy for a new investor, but buy the top and HODL to zero is actually one of the worst possible strategies I can think of. Since this is true, we can’t just fall back on “HODL – period” we need to have a slightly more nuanced strategy that accounts for the reality of things. That reality being most will get into the crypto market late and HOLDing will simply mean exposing themselves to the pressure to sell over time.
