Friday, February 23, 2024


> Hold Coin or HODL is the act of buying a coin to hold for a long time until the target selling price. Regardless of whether the market moves up or down, do not sell until the desired price or the right time. So what are the benefits of holding? How to choose when and how to hold coins to maximize profits? Let’s find out in today’s article. **I/ ADVANTAGES OF HOLD COINS** Investment legend Warren Buffett has an immortal saying: “The market is where money moves from the pockets of the impatient to the patient.” The above statement has become a guideline for many modern investors, referring to a popular trading school, especially in the cryptocurrency market, which is HODL. ***Advantage:*** **Save time and effort** By holding coins for a long time, we don’t need to worry too much about when to buy and sell, no need to enter orders and watch the chart continuously. It is worth noting that you just need to make sure that your crypto assets are safe and away from hacking risks. * **There is a more comfortable mentality when trading** Surely if anyone has ever traded, especially trading futures/margins, there are times when it feels like a roller coaster ride, but with hold, it helps us to stay focused. Comfort, reduce stress. Thanks to that, we have more time to do other things * **Doesn’t depend on the small trend ** Traders depend a lot on the big and small trends of the market, also known as wave soup To bet, that means you have to go through analysis to determine exactly how the price rises or falls in a small wave, but most people are not professional traders and even professional traders also face down as usual but with holding helps people limit the risks associated with misjudging the trend. ***Cons:*** Hold coin also has certain difficulties and disadvantages, but it is still much safer than trading, here are some disadvantages. * **Account is reduced ** First, the sure thing that we will encounter is that our account will be reduced because when holding, we are usually not too concerned about small waves so account reduction is inevitable. In addition, due to the application of the hold strategy, we will be overwhelmed before the slight recovery of the market * **There is a risk of losing everything if you hold a “fake” project** Not every coin you hold is good. potentially profitable for you. Let’s take a look at the crypto market from 2013 to now, which coins are still in existence? Or closer, the top coins of 2, 3 years ago, which coins are still holding their positions, which coins have disappeared from the market or out of the top? Or unlucky if you get involved in a fake project, the dev withdraws and runs away, you will lose everything. * **Mentality is easily challenged** Hold coin is just buy and let it go. However, they are not as easy as you think. When the coin is in the gut, it is not easy to hold if you are not consistent with your strategy. Our mentality will be challenged by going online to see this group of groups constantly showing off their profits, but the coins we buy don’t increase, it’s hot. The best way to have a comfortable psychology when holding is to use the savings to invest, even if it loses, it will not affect the current life and the holding account should be kept separate from the trade. **II/Factors that determine the outcome of holding coin** We have up to 4 factors that determine the outcome of holding coin: 1. Project to invest 1. Source of capital and amount of capital 1. Final selling price same 1. The big trend of the market **1, Investment plan** This is an important step, if you have done this step wrong, the following steps have almost no meaning anymore. If we choose a fake project, the possibility of us losing everything is very high or luckily, even though the project is not dead, but buying the right coin trend, 30 years later, we will not return to shore. Therefore, the most important thing when holding is to choose a project that can grow in price in the long run. A good and potential coin will help you solve 2 problems when holding: 1. Good growth rate when the market is in an uptrend. 1. Recoverable and less likely to fall when the market crashes. The way to find a good project is very difficult and to find a project to hold for the long term, because of the content of the article, I will probably save it for the next post. **2, Source of capital and amount of capital ** After choosing a good project, the capital is the second most important factor that determines the outcome of the coin holding process. It is the ratio of people’s money spent on holding coins compared to the accumulated amount and income. If people borrow to invest, will people have enough psychology to withstand the ups and downs of the market? Or the investment is too small, so even if you choose a x10 project, the results will not penetrate. So never borrow to invest and try to “work to earn” accumulate and increase capital for investment. **3, Final Selling Price** This is rarely mentioned but it is really a key to help us get there. Many people have chosen a good project with a reasonable amount of capital, but they tend to hold forever and refuse to take profits or close at the wrong time, so the results are only relative. For example, someone bought BNB at 30$ and the 2021 uptrend to 600 refuses to close, then drops to 300 and then back to 600, but also refuses to close. so from that we can see that the final selling price is very important **4, Major Market Trend** Although it is said that holding coins is not too concerned with the market trend, it does not mean that we Just close your eyes and don’t care. Because the coin is good, the downtrend also splits the account. Bitcoin split 6 in 2017, ETH split 20, ADA split 100 etc. Right in this 2022, we have had many 10 splits, 2 Bitcoin splits and 2 2 ETH before it rebounded. Therefore, determining the major trend of the market is very important for making a hold decision. **III/ Reasonable coin holding strategy to optimize profits 1,When to HODL?** **When the market fluctuates** The crypto market is notoriously unpredictable and often volatile. During a period when the market is not clear about the uptrend or downtrend, trading will be very dangerous because it can push you into a situation of “buying high and selling low” or preventing you from achieving the desired profit. Therefore, the hold strategy will be especially suitable at this time to protect your investment. You can sell when the market has established an uptrend with favorable conditions for the coin you are holding, or continue to hold if the market enters a bearish phase. **When the economy shows signs of recession** Although it can play out under different scenarios, the economic downturn will eventually affect any market, not just the crypto market. At this point, if you sell your coins to convert to USD or cash which is already on a slide due to the recession, you will probably experience double losses. This is when you should apply a hold strategy **When you are new or not fulltime crypto** Because of its simple nature, anyone, especially a novice, can hold. especially suitable for those who do not have too much time to read charts or in-depth technical analysis of a certain coin. So, holding coins and taking the time to improve your knowledge would be a wise move. And also would like to affirm that whether full time or not full time, holding is also a good strategy not to be missed. **2, How to hold coins to maximize profits** **Apply price averaging (DCA) strategy and have a stop loss** To hold properly, everyone can apply DCA strategy. The thing to note here is that the DCA should go down, not the DCA, and always leave 10% – 20% in case the price drops very deeply. Example: You have $10,000 and BTC price is currently $30,000/BTC. Instead of buying 2 BTC at the current price, you can apply the DCA strategy as follows: * Use 50% of your existing $5,000 to buy BTC. * If the price of BTC drops, for example to $20,000, you continue to use 30% of the amount to buy more BTC The average purchase price will be ~ $27,000 * If the price continues to fall, you can use the remaining 20% ​​(equivalent to $2,000 ) buy more BTC. This can be seen as a long-term strategy that protects us from misjudging market trends and buying large amounts when prices are at their peak. In addition, it is also suitable for those who do not own a lot of money when dividing the number of entries. Determine your desired R:R ratio. There are times when you have to accept a stop loss. This number will depend on the level of risk tolerance of the investor, or the ability to fluctuate in price. Timely stop loss, avoid more and more losses. *The most important thing when making money is not to let the loss go out of your control.* **Should combine Hold and Trade** In addition, as I said above, the combination of Hold and Trade can be the logical method to help you maximize profits in any market trend. * If you are confident in your knowledge and want to optimize profits, you should spend your capital to hold trades to catch up with the market * If you are a newbie, do not have much knowledge of the market and do not analyze it thoroughly Technically, there is no time, 100% capital to hold the coin will bring the most optimal efficiency. Regardless of capital allocation, while waiting for the coin you hold to reach your target, you should also learn PTKT and combine PTCB to hold a better price Example: I am a trend follower and want to HODL coins that I bought at a low price when the market was stagnant. In a bull market, when I see the long-term market trend turning down, I will take partial profits and DCA again at a lower level. **Take profit when target profit level is reached** Once successful in holding a coin for several years, these holders tend to hold on forever even when the price of the coin they are holding peaks in the hope it will increase the price further (i.e. they tend not to take profits). That is not recommended, every race must have an end so we should not hold forever. “He who knows enough is often happy”. If the target or time is appropriate, you should take profits. **IV/ Conclusion** HOLD is definitely a good choice for all who do not want to spend a lot of time reading, are not familiar with technical analysis. Whatever the purpose, everyone should remember it. In some crypto markets, people get rich by holding coins, not futures margin.

Source: Collector



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