But still, there are some who don’t want to go with crypto trading. There are even some who have been there in this field for a long time but when it comes to crypto trading profit, they fail.
Is there any special technique or crypto trading strategy that they are missing?
If it is, then what is that strategy?
Well, let us dig deeper to get the answer.
What is daily trading and what are its drawbacks?
Crypto trading is just like stock trading where your task is to buy and sell crypto whenever you see a profit margin. Day-trading is a part of trading where the process of buying and selling cryptocurrencies takes place on the same day.
You might be wondering what is so bad in this process?
Well, you need to know that there are fewer parts of the day where there is a probability of executing predictable or we can say profitable trades. This can leave you staring at the screen all day long.
If we talk about various asset classes, the company profits and governmental data are released on a scheduled basis. This lets you predict what is going to happen. But when it comes to cryptocurrency. Even small news from a random blog can send the price skyrocketing or plummeting. You can say it is just like going for a bet where you can win on a good day and on another day you can face a huge loss that makes you quit trading.
Moreover, the tiny market of cryptocurrency makes it pretty hard to get out of the position with the price you are desiring for at a particular moment.
Why HODL is considered the best crypto trading strategy?
HODL means “hold” but it is an acronym that is most commonly used for “hold on for dear life”. It is a simple process in which you have to buy the cryptocurrency and put it in your wallet. You can go with a cold wallet or even a hot wallet, but a cold wallet will be ideal in this case as you need not remain to worry about security lapses all the time. Then you have to do nothing and wait for some time. It can be days, weeks, months, or even years as per the market conditions or as per your requirements.
So after some time when the price goes high, then you can think of selling. This can make you earn a huge profit. This can be a kind of bonus or reward. As you even need not pay taxes until you cash out. Your tax reporting is going to remain simple. The point is, in every aspect it is better than day-trading until and unless the volatility takes it down or you are in urgency, or in the worst-case scenario you are running short as there is a limited supply of currencies (For Bitcoin, it is 21 million).
Although the volatility still remains a point of concern, the history is in favor of HODL. Don’t you see how the value of bitcoin raisen a lot in the past few years?
Moreover, DeFi is something that can’t be ignored. DeFi or Decentralized Finance is a system by which financial products are made available on a public decentralized blockchain. This is open for anyone. You need not worry about having a government-issued ID, Social Security number, and so on. You can buy and sell crypto anytime you want as it is based on peer to peer. There is not any involvement of middlemen like banks and brokerages.
This further means you need not require any approval or a third party for crypto trading, no matter how much time you want to hold it you can. It is all about smart contacts which are automated enforceable agreements that you have to go with for crypto trading.
Most of the DeFi is built on the Ethereum blockchain network and is going to bring revolution in disruptive financial technology.
When it comes to a crypto trading strategy, it plays a crucial role in how much profit you are going to earn. Where a wrong strategy can lead you to go bankrupt, on the other hand, a right strategy can make you. This is the world of cryptocurrency where anything can happen and you can’t hold anyone responsible for the same. But yes there are some proven strategies that can push you towards success. HODL is one of them and it has proven itself in the past. It can be a gamechanger when it comes to earning profit.