Holder Or Day Trader? Which One Are You?

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Which One Is Better?

While browsing Twitter I came across an interesting post. It was a post of a guy claiming that he had turned his $2,000 into a half a million in just 3 months through trading with cryptocurrencies and NFTs.

But as one would expect from Twitter, the response was mix. There were people that believed him and people that don’t. There’s one reply I found really hilarious though. Look at the screenshot below to see what I meant.

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Of course this article is not about the above tweet and therefore, I will not be focusing on it. Instead, I will try to answer a question that many people have asked in the past. Which one is better: A holder or a day trader?

The Coin Bag Holders

There’s actually just one major difference between holders and day traders (both are traders) and that was the time, or rather, how long they hold on to their cryptocurrencies.

Holders, as the name suggest, hold onto their cryptocurrencies for a very long time and not just for a day or days like day trader does. Some could hold on to their bags of coins for weeks, months, or even years.

Holders believed that the longer they hold on to their coins without selling, the bigger their future profit would be. And judging the history of cryptocurrencies over the past years this assumption was proven to be correct or at least mostly proven to be correct as there were some unfortunate crypto-related projects that failed and died off over the years.

That said if one invest in cryptocurrencies like BTC, BCH, and ETH, and hold for a long time, it was almost certain that one would profit at the end. Moreover, the bigger the investment the bigger the expected return of investment (ROI).

One of the biggest advantages of being a holder to a day trader is that holding on to cryptocurrency for a long time is relatively safer and a lot less stressful. But the drawback was also very obvious: One would need to wait for a relatively long time before one could profit from one’s investment which mean that patient is a must.

The Adrenaline Junkies (Day Traders)

Ask any day trader and all of them would tell you that being a day trader is not for the faint of heart. Day trading is a very stressful occupation that requires balls of steel.

Why? Because it is risky – extremely risky.

Despite the risk though it was still a very option for many –especially those that loves to gamble and take risk for the adrenaline rush or quick profit.

Unlike holders that only requires one to invest in cryptocurrencies and wait patiently for the price of said cryptos to moon; day trader must be present to observe every second and every minute of the action.

Since the cryptocurrency market is extremely volatile, prices could go up and down in seconds. And for day traders to profit, they must take advantage of these ups and downs.

Moreover, a single missed opportunity could mean a loss of possible profit. This was especially true during a bull market where the changes in the prices of cryptos are significant.

Also, because watching the market all the time was a very stressful endeavor some day traders would choose to use bots to trade.

The advantage of using bots was that day traders no longer have to check the prices of cryptocurrency every minute as the bots would do that for them. But the disadvantage was that bots are not perfect and relies greatly on the commands inputted by its users. Meaning that bots could not react accordingly if there was a major change in the market like as a living person could thus resulting in great losses.

But despite the disadvantage of being a day trader, many still chooses this path as it’s the fastest way to earn a lot of money for a short time. That is of course, if you know what you’re doing and your luck is good.

Am I A Holder or A Day Trader?

Personally, I always considered myself as a holder. Not because I cannot afford to take huge risks but because I prefer stability more. The other reason I chooses to be holder was because I as a student, I could not put all of my focus and time in trading with cryptocurrencies.

Moreover, as a student, I don’t have tons of money that I could use to invest. As such, I couldn’t risk it all by being a day trader. Certainly, one could earn a lot through day trading but the one could also lose everything if one was unlucky.

One good example of this was the reply of @Wolf Trade to @Storm tweet. In his reply @Wolf Trade jokingly told everyone how he turned his $300 to $9 in a week. Sure it could have been just a joke but there’s actually a truth in it: Day trading is indeed one of the fastest way to earn a lot of money in the cryptocurrency market but it is also one of the riskiest and fastest way to lose money.

 It’s actually not uncommon to see Facebook post or tweets of people complaining that they lost everything they have because they dare to take risk by day trading.

That said I didn’t write this article to scare off possible day traders but to highlight the pros and cons of being cryptocurrency holder and a day trader. If you want stability and slow return, then choose some good cryptos like BCH and become a holder. But if you’re a risk taker and prefer fast return, then, being a day trader is for you.

That is all. Cheers!

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Disclaimer: Double-checked using online plagiarism tool to ensure originality.

Lead Image: https://pixabay.com/photos/stock-exchange-win-boom-businessman-3087396/

My other articles: https://read.cash/@beastion