HODL as a trading strategy
There are a lot of different strategies that may seem confusing at first glance. But if you decide to learn more about trading strategies, the crypto-currency market will seem less challenging. Furthermore, in order to become an advanced user, you will need to learn some useful concepts about crypto-currencies. Since the cryptocurrency market is quite unpredictable, you need to choose the right trading approach. In this article, we will tell you about HODL as a crypto-currency trading strategy, its characteristics, and why it is important to have nerves of steel.
The term HODL has an interesting history. As you can see, the name of the strategy was formed as a result of a typo in the cryptocurrency enthusiasts’ forum. In 2013, Game Kyuubi posted a message entitled “I AM HODLING” on the BitcoinTalks forum. The main point was that the user bought and kept bitcoins. But the word spread and became an abbreviation because of the misprinted letter. By the way, HODL is also decoded as “Hold On for Dear Life”. This is an interesting statement, considering the volatility of bitcoin.
The word “HOLD” has become synonymous with buying and holding. The crypto community calls long-term investors “hodlers. Their name is derived from the misprint “hold.” Also, the main rule of hodlers is to stay away from charts and indicators and not to pay attention to the market fluctuation. The HODL strategy is based on the assumption of medium and long-term increasing market trends. In other words, holders believe that the price rates of crypto-currencies will increase for a certain period of time. Thus, the best option for the trader is to buy a certain amount of crypto-currencies and hold it for several months or even years. Then, the trader chooses the right time to sell his crypto assets. Similarly, the HODL approach can pay off when supported by a large community.
The HODL strategy is considered one of the easiest approaches, as it does not require special skills such as fundamental or technical analysis. Therefore, it is the best trading method for beginners. Bit4you offers its users the possibility to test as many strategies as they want through the Demo mode. In other words, you have $100,000 of virtual funds to buy, sell, trade, and exchange with more than 20 crypto-assets on the bit4you trading platform. After practicing with the Demo mode, start trading with real money, put your knowledge into practice and expand new horizons in the world of crypto-currencies. Because crypto is an extremely volatile asset, many traders have left the market. But the hodler believes that the asset price will rise. He doesn’t rely on indicators and rate movements. The main secret of hodlers is to forget about the slight fluctuations in the crypto-currency market and patiently wait for the right moment. Traders lose their funds as a result of mistakes and worries. The HODL approach allows you to keep emotions under control, which will increase the chances of making profits. If you are calm, patient, and can analyze the basic factors that affect the crypto-currency market, the HODL strategy is for you.
Valentina BEREZA, Team bit4you