If you have been involved with the crypto industry for a while, then the term “HODL” may need no introduction. Used to refer to the action of “holding” your cryptocurrency instead of using it on a regular basis, the term is widely popular among those who want to get maximum gains out of their investments.
After all, one of the most popular ways to see your digital funds grow is to bank on the market to change value overtime. By turning to HODLing, the only thing you need to do is not to touch your crypto funds and let them sit idle for a while.
But that’s where most cryptocurrency holders get it wrong.
Depending upon market conditions, the strategy to HODL the assets could either provide minimal returns after a while or even generate minuscule profit that is practically non-existent. In some cases, holding your cryptocurrency without any thought can also cause your original investment’s value to go down overtime – which is especially true when it comes to a portfolio that is split between different cryptocurrencies.
In order to save themselves from these negative scenarios, most HODLers are looking towards ways to protect and grow their investments. The goal is to find a solution that provides them with timely gains, even if it comes with a little commitment of time.
That is where automated cryptocurrency trading comes in.
🤖 Crypto Trading Bot Solutions
One of the biggest reasons why new cryptocurrency holders turn away from trading as a viable solution is because they simply do not have the time to invest into this mechanism. Most of them have day jobs, with some of them holding multiple jobs to support themselves and their families. In such circumstances, leaving consistent income-generating methods in favor of alternative investments doesn’t seem very logical to them.
In other cases, even when they have the time to invest, learning the nuances of cryptocurrency trading could be enough to break their back. With that, the requirement to be readily available to watch the market and take instant decisions could add such pressure that it goes beyond the level of usual stress.
Either way, the stakes, and the risks are as high as they can get for a new trader. As a result, indulging in crypto trading doesn’t seem like a beneficial solution to them.
But if such individuals turn towards automated bots, they neither have to dedicate extensive time or learn very complex mechanisms. All that they need to do is to take out some time while setting up the bot and learning its functions just so they could configure it and know some basics. From there, the trading bot does the rest.
An automated bot could buy and sell cryptocurrency by simply looking at market trends. It makes decisions according to what it deems best after analyzing the market movement through its algorithms, while also keeping your preferred strategy in mind.
With the ability to identify market indicators while also performing technical analysis, it makes accurate trades that have a higher chance of generating profits than manual trading.
All in all, a bot could be your digital representative on the cryptocurrency market, even when you are not actively looking after it. That is why more and more crypto holders are turning towards this solution to take optimal advantage of it.
TOP TRADING BOTS
💰 Is Bot Trading More Profitable Than HODL?
Given that your dilemma is to HODL or not to HODL, knowing whether cryptocurrency trading is more profitable than simply holding your coins safe is crucial.
The simple answer: yes, it can be more profitable than HODLing. The detailed answer: there are nuances to it.
When you are sitting idle on your funds and going by the strategy to HODL until something good happens, you are playing a passive role in your cryptocurrency investment. Whether your investment generates profits or turns into a massive loss is completely dependent upon market conditions, which could change rapidly.
While married to the idea of HODL, you also have no choice but to watch as your cryptocurrency investments increase in value one day, and tank the next hour without any notice.
With it, whenever you are going by this strategy, you have no way to determine when you should stand by your resolve of holding your crypto and when you should encash your investment.
The rules are clear when it comes to holding your cryptocurrency: you don’t trade it, withdraw it or encash it in any case. But when it comes to actually converting your investment into liquid cash, the rules turn murkier: you don’t know when to take that action. When it comes to HODL, there’s simply no good time to pull out of the strategy.
On the other hand, trading through bots puts your funds at risk in a different manner through active trading. But at the same time, it gives you the satisfaction of taking matters into your own hands.
Instead of simply waiting for your funds to grow one day, you are taking targeted actions through your bots to increase your original investment. With the power of accurate analysis and timely actions supporting you, you have all the tools to succeed in achieving your goal.
Overall, making automated trades through bots comes at almost the same level of risks as holding onto your cryptocurrency does. But active trading comes with the advantage of frequent movement of your assets, and sometimes higher chances to generate profit.
🦾 Isn’t Bot Trading Risky?
Where manual trading could expose you to more risks while also requiring more time from you on a daily basis, automated trading minimizes the risks while also requiring minimal time from your end.
It’s because credible trading bots use highly accurate mechanisms and algorithms to perform their analysis and understand market conditions, which lets them make trades that have a higher chance of profit. These bots also make trades faster whenever market conditions turn to your favor, which saves you from acting late on a profitable trade and missing out as a result.
This accuracy and the ability to make rapid trades makes bot working less riskier than manual trading. It also puts it on par with simply holding your cryptocurrency and sitting idly by.
With that being said, bot trading comes at its own risks. It is not a foolproof plan, with the strategies sometimes not working in your favor and providing some losses. That is why, it is advised that you dedicate at least some time to them especially while setting them up, so you understand exactly what is being done with your funds and readjust settings if needed.
While this asks for more time during the setup phase, readjusting your settings gets easier as you use your bot for a longer period of time. As a result, you return to your objective of dedicating minimal time to your investment while also getting optimal results.
👉 Are There Any Real Examples?
I am personally a true crypto HODLer and have many different coins in my portfolio. At the time of writing, I have partially invested some Bitcoins into bot trading.
With my personal experience, I have seen several scenarios firsthand where bots have made a decent profit and when my funds have taken some loss.
But the key here is the dedication to learn about what’s happening. The more I play with bots, the more understanding I have regarding the mechanics and strategy that can be used. Comparing the trading results to simply HODLing my funds, I have seen impressive results with automated trading as opposed to what I have obtained through a simple HODL strategy.
You can check the reports of my performance here: https://tradingbot.info/results/.
The bottom line: bots can help with accumulating coins, but you should be prepared to be active and open to learn in order to see how this mechanism works out for you. You need to be ready to gain some knowledge about the strategy at play, so you could make decisions according to what is favorable for your specific case and portfolio.
📢 Conclusion
Automated solutions are perfect for people who don’t want to spend time performing manual orders and getting into detailed education. But at the same time, it is definitely not a tool for people who don’t want to do anything themselves.
I personally was very disappointed with the fact of my portfolio not working good enough through a HODL strategy, and that’s why I decided to put it to work. It took some time to setup my trading bots and gained actual benefits from them. They still require some maintenance from time to time and I also dedicate an hour or two by my own accord to learn about new strategies as well as the decision on how to put them to use.
If you feel the same, then go ahead and try a bot, but be ready to invest not only crypto assets but a bit of your time as well. While the time investment is minimal as compared to manual trading, it is still pretty much there.
As long as you have clarified this perspective in your mind, you can go ahead with using a bot and benefiting from the advantages it brings to the table.