There are many different views on whether you should trade or hodl (hold) your cryptocurrency. What should you do?

Both strategies have positives and negatives depending on the currency and your strategy.

Some people day trade, others hodl everything they own, whilst others do both.

Personally, I do both. If I firmly believe in a project, I tend to hodl regardless of market movements. In fact, if one of my major hodl investments drops in price, I tend to take advantage and buy more.

Whereas, on the other hand, I use some currencies to ‘flip’ and make profits to enable me to invest more into my major hodls.

It is important to understand where you are starting from and where you want to end up. Compare the crypto markets with trading on traditional markets like stock and shares. If you can make between 10%-20% in traditional markets, you are probably doing very well.

With all the recent crypto hype, people expect percentage returns much higher than that and if they don’t see them immediately, they sell up and turn their backs on it.

Getting high percentage short term gains in crypto is somewhat of a misnomer in some cases.

The key is to do your own research and believe in your convictions. With the crypto market being so volatile; today’s red can easily be tomorrow’s green and vice versa. It is so easy to buy and sell at the wrong times, thus chasing your tail to try and limit losses. Moreover, you will be creating more losses than gains, and only if you are lucky will you come out on top. For this reason, you need a strategy.

For my main hodls, I identify a few solid currencies/projects that have longevity and sustainability that can stand the test of time, regardless of the competition. They must solve a real-world problem or improve efficiency in any given sector. I try and steer clear of the ‘me too’ projects. Whilst they may have short term gains, in all likelihood someone else will come along with a better idea that may blow your investment into obscurity.

My strategy is to view my long terms holds as the backbone of my investing whilst exploiting the hype of lesser know projects and tokens to my advantage. For example, the hype created with Verge entering the pornography sector created immense hype and the coin’s value increased substantially. In theory, you could have bought into Verge before or just after the PornHub announcement and then sold it at the high to profit.

You could then take these profits, buy Tether (or another currency), wait for a dip in the market and purchase more of your long terms holds.

This is just one example of how to use both upward trending market and the downward trending market to make gains. A downward trend can be just as opportunistic and certainly is not the disaster that some believe it to be.

Recently in the bear market, we witnessed an increased amount of panic and the effect that FUD (fear, uncertainty and doubt) has had. People (including whales), dumping their investments to get out of the market.

This in my view has many factors including whales selling they large holdings and people not having either long term or short terms strategies. Coupled with the fact they jump into the market via FOMO (fear of missing out), they are searching for instant gains and when they are not realized, they dump and run, fearing that staying in the market will increase their losses. There’s a lot of sheep in the crypto space, and once they see the market dropping they follow suit, making a bad situation worse.

The smart investor welcomes downward trends, bides their time to pounce on bargain prices and invest more.

Like any market, you can, if you plan well and have sound strategies, find opportunity in both upward and downward trends. Just ensure you understand the market, remove emotion, keep your wits about you and ensure you have a strategy for both ends of the market — up and down.

An alternative to trading in established currencies is investing in ICOs.

ICOs (Initial Coin Offerings) are a great way to make profits, providing the deal on offer is attractive. Yes, many ICOs dump as soon as they hit the exchanges, but if you manage to get a good discount or bonus (or sometimes both), you can make high gains.

The risks with ICOs are greater, but so are the returns.

It can be difficult to justify investing in an ICO at public sale as the discounts and bonuses on offer may not make it work the risk. However, you can take advantage of pre-sales if you join an ICO pool.

An ICO pool allows multiple investors to pool their investment into one larger amount. This is generally enough to meet to minimum purchase requirement for the pre-sale of an ICO.

This way, although you may have only invested a small amount, you still get the full discount and bonus levels making it much more attractive.

So, don’t shy away from ICOs. Providing you have done your own research and believe that the project is viable, not a scam and can be successful in the future, you may well be investing into something that could bring you great longer-term gains.

Some of the ICO pools I have been involved in are:

Keith Crypto Pools —Run by Keith Wareing, a highly respected crypto expert and popular YouTuber with many years experience and a great track record of investing in successful projects. Mainly uses referral codes and urls.

ICO Dog Community — also has a website which publishes ICO reviews, insider information and detailed research and analysis.

Moon Mafia — A popular pool run by Crypto Jack, a very well known and trusted YouTuber.

Always, remember you cannot invest in everything. It is up to you to look past the hype on YouTube, blogs and Telegram Groups and view every potential investment with a pragmatic approach. Yes, you need a bit of luck. Some of your investments will flourish and others may fail so it is important to diversify into different areas of crypto.

For example. You could invest 50% into established coins such as BitCoin, Ethereum and LiteCoin. Then 25% into lesser known coins that show promise for the future and 25% into ICOs.

Whatever you decide, make sure you can afford it and you won’t be left destitute if you lose everything. Only invest what you can afford to lose.

Use buy order limits on the Exchanges to ensure you buy at the right price and do not get upset if the limit does not get reached. You will have other opportunities and must be patient if you are to be a successful trader.