Trading vs Investing
When starting the adventure with cryptocurrencies, it is worth considering whether we are going to buy and sell assets on the market in relatively short periods of time, with the intention of making a quick profit. Or rather, we are going to buy our coins and bury them in the garden for several years. In the first case, we are talking about trading, in the second – investing. There are many types of trading. Starting from scalping, where you buy assets only to sell them back a few seconds later and break off a fraction of a percent. Through day trading, or medium to long term play As our market activity declines, we are shifting more towards long-term investing. When buying, for example, bitcoin with the intention of reselling it in a year, two or ten, we can talk more about investing. Which strategy is better? It’s hard to say. In the case of cryptocurrencies, large fluctuations in the market with a few right decisions allow you to quickly multiply your ownership. On the other hand, the market can play tricks and we may as well reduce our wallet. Crypto slang often uses the slogan “buy and hold”. Such a strategy in the case of bitcoin was probably the simplest and gave a lot of money to persistent ones. Sometimes, however, it is not so easy not to sell out your coins.
What will be better for you?
Take an interest in trading if;
- You have a lot of free time to learn the technical analysis of charts and follow the market situation on a fundamental basis
- You have nerves of steel, you are disciplined and you can stick to a set strategy
Invest long term if;
- You don’t want to spend a lot of time analyzing the current market situation, but take care of your own affairs
- You have neither the knowledge nor the skills to effectively predict how the market will behave
- You believe in the long-term success of virtual currencies and count on them to provide you with funds for your retirement
Regardless of which option you choose, the most important thing is never to invest more than you can afford to lose. If we risk our last savings and the market even temporarily goes wrong. It may affect our decisions and we will sell out at a big loss, feeling the knife on our throat. By investing amounts that are not a big problem for us to lose, we expose ourselves to much less stress and, as a rule, make better decisions. Small amounts on such a prospective and at the same time unpredictable market, with a bit of luck, can one day turn into huge money that will set us in life. By investing in bitcoin in 2011, for every dollar you put in in 2011, after 6 years, you could get $ 20,000 in December 2017. By investing $ 15, we would earn over a million zlotys. Of course, there are probably few who have managed to buy perfectly down and sell at the top, it is almost a miracle, but it shows the potential we are dealing with. Where will bitcoin stay, nobody knows if JanuszCoin will repeat its result? Probably not; P But it is enough for him to repeat his success, at least partially, and investors will be satisfied.