There are many different trading strategies and styles in crypto space. The simplest yet the most powerful strategy is just buying and hodling whereas the other strategies are developed for trading.
1. If you just hodl, you miss out on daily or hourly profit making opportunities in this highly volatile crypto market. Most of the time it's 3%-10%.
2. If you day trade or swing trade, you miss out on many of the best days with 20%-30% profits. Missing only 5 such days per year is a huge loss of opportunity. (Price rally keeps on rallying even after you book your profit and settles in a new higher low.)
What if you can hold and trade at the same time? Won’t it solve the above problems? It would and we call it the “Hodling Trader Strategy”.
“You buy a few of the best cryptos that have a great future potential in your opinion and it is what you hodl. Then you day or swing trade the same cryptos with borrowed funds against your holding or via a margin account.”
That is our solution in KCP Club. This way, you will benefit from all the “big price pump days” as you have never sold your main hodl.
You profit from day trading from someone else’s money and increase your hodl with time. However, it is better to use 2X or 3X leverage only in order to safeguard your hodl from liquidations.
In order to be successful in this strategy you need a robust mindset. That’s the main tool.
You need to believe in the following,..
1. Top cryptos that I have selected appreciate over the next 5 years but will not depreciate despite temporary dips.
If you believe that the future prices of crypto are completely unpredictable, hodling is not a good idea for you. But if you think your selected cryptos are better than real estate or gold in terms of holding value, your belief system is suitable for this strategy. Therefore you need to make up your mind.
2. I only want to increase my hodl with margin trading but not to make fiat money.
You need to think as if you are a treasure hunter who finds gold and collects it for a rainy day in the future. The only difference is that your gold is cryptocurrency in this game. Your main interest is to increase your hodl but not to save fiat money.
3. I pay myself weekly or monthly by crypto only.
This is your profit but consider it as a salary paid to yourself in crypto (not fiat).
While the main hodl is untouched, you pay yourself a profit share by crypto.
If your coin is depreciated in a bear market, your salary is now lower than before. You can decide to wait till a better day or sell them off to pay for your daily expenses. Your total value of hodl is also lower during such times but if you have the belief as in point one, you will believe that this is only a temporary dip or a market correction.
At first you may think this mindset as nothing complex, but it’s indeed a complex mindset if you understand it properly.
For example, say a US citizen who worked and saved in USD for his entire life permanently migrated to the UK. Now he has to earn, spend and save in GBP. However, during the first few months he may keep converting all the prices he sees in the market to USD to get a grasp of “real value”.
Even though USD value is the real value in his mind, the reality is no one cares the USD value in the UK markets.
After a couple of months, the same person will totally forget to check the USD values and stick only with Pounds.
However, whenever he wants to send some money or gifts to his family and friends in the US, he would again check the prices in USD.
By that time his entire savings that’s in GBP could have been appreciated or depreciated compared to USD. But he wouldn’t care. Because his new life is now in the UK but not in the US
Hodling Trader’s mindset is similar to his mindset and now his mind should be fixated in asset building in Crypto but not in fiat.
This belief system may sound like crazy to other people and if our first point fails, those people would be correct. Therefore, we need to be pretty sure with our selection of cryptos and their fundamentals should be absolutely solid for the next 5 years.
This is what we call the Hodling Trader Strategy in KCP Club.
Dr. Buddika Adikari
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