Why can trading be more profitable than waiting for the price to rise?

Cryptocurrency has long ceased to be an asset that you can buy cheap and just wait for the price to skyrocket, as it was in the distant 2017. And hence the hodal of the coin, although not criminal, has long been not the most optimal strategy for capital multiplication.

Cryptocurrency lives in motion.

Long positions in cryptocurrencies. Is the risk justified? 

Let's start with the fact that even today there are currencies that are really worth holding on to, as they will generate a lot of income from sales in the long run. They balance your portfolio, but only if they don't take up more than 50% of your portfolio.

If, however, you are holding coins based on the principles of owning stocks, and you believe that in a year or so the value of the coin will increase significantly, and after selling it, you will be able to pay capital gains tax instead of regular income tax, then we have bad news. In reality, cryptocurrency and stocks have much less in common than you might think. It is extremely likely that a token that soars today will plummet in value a year from now, with its value hovering near the bottom of the price chart.

However, the prose of trading is as follows: a coin bought at the wrong time should still be held to get profit from the price increase and to repay what was spent. In other words: bitcoin reached the $50,000 mark because thousands bought it when it cost $49,990.

Cryptocurrency: trade or store? 

From a hodler's perspective, token charts often have sharp swings on a long range. However, zooming in on the chart gives a very different picture: on shorter intervals (weekly, daily or hourly) you can see a lot of smaller price movements. 

Thus, a hodler ignores the smaller price movements, expecting a sharp significant increase in the value of the coin for a one-time sale to make a profit, while traders who trade on smaller price changes buy, for example, around $17 and sell around $20 each time and accumulate a profit each time. Accordingly, by the time the hodler reaches the take profit point of $30 and makes a sale, the trader will have conducted several operations and come out to a tangible plus, without waiting for the moment of the highest jump in the value of the token.

And since trading is all about the use and multiplication of assets, the trader is not tied to a particular currency and does not believe in universal luck, he takes small steps forward using any price fluctuations as an opportunity to get a small profit, while the hodler can wait for years for the cherished price jump. As you understand, at a distance, a large number of small transactions, as a rule, bring a significant profit and can overlap the profit from the sale of a sharply increased coin. 

In addition, within a constantly moving market, the trader moves with it and employs various strategies to stay on the upside and afloat, while the only hodler strategy remains to wait and hope for growth. And any experienced investor will tell you that hope is not a strategy. 

We've covered why active trading can bring you more profits than hodling. Now let's delve deeper into the topic. 

How to trade efficiently?

Open the door to the future and trust trading bots. All processes are being automated these days, so why not use this in cryptocurrency trading. 

Trading Bots are a great way to implement trading strategies and scale, as a strategy for one coin will likely work for a dozen others. It is difficult and counterproductive to complete more trades manually, you can trust someone who is not affected by fatigue and emotions.

Bots execute trades within the conditions you set and allow you to redirect your energies to market analysis and optimization, instead of constantly closing trades manually. 

How to use bots? 

You should start by choosing a platform for trading bots. A platform worthy of your attention will have such characteristics as: 

• Compatibility with major exchanges

• Trading different pairs

• A single interface to manage all your trading activities

• An active community and the ability to share knowledge

• Reputable and secure service

Now everything is in your hands!  The success of trading will depend on the bot settings. Naturally, a good platform has ready-made bot presets for quick launch.

Not to mention manual customization for those who know exactly what they want and how to achieve it.