Cryptocurrency trading experts often consider between long-term and short-term approaches to the cryptocurrency marketplace. The long-term approach is known as HODL, which came from an intentional misspelling of the word hold. HODL means the same thing it implies: holding. In its turn, the short-term approach is known as crypto trading.
The essence of HODL
“Hodling” cryptocurrency means not selling it within a substantial period of time, for one year on average. In order to execute this approach properly, investors should understand cryptocurrency’s volatile marketplace.
An investor considering a long-term approach should realize that most investments increase in value with time. Cryptocurrency should be treated likewise when an investor considers a long-term approach. In this case, an investor should trust in their HODL approach instead of panicking and selling a cryptocurrency during marketplace instability.
The essence of crypto trading
The aim of crypto trading is to achieve the most possible gain without focusing on long-term investment. Investors considering a short-term approach want to buy and sell cryptocurrency day-to-day or month-to-month to take advantage of its volatile marketplace. An investor with the crypto trading approach understands a potential gain during any day.
Which one to choose?
Hodling and crypto trading are the two opposite approaches to the cryptocurrency marketplace, but both of them are commonly used and considered by both investors and traders. The cryptocurrency marketplace is known for sudden and drastic increases and decreases of cryptocurrency prices, which ultimately provides an opportunity for a substantial gain as well as a sudden loss.
The two approaches both have risks and rewards, and the decision which one to choose should lie in your personal goals and risk levels. Check out our best tips and techniques on how to become a crypto trading guru, as well as our overview of the crypto trading strategies for 2019.