Crypto Academy Week 11 - Homework Post for @alphafx | HODLing or Trading

Hi everyone, I’m excited to be here this week to contribute to the Steemit Crypto Academy. In this article, I’d be completing the tasks given by professor @alphafx. I’d be looking at two common terms in the crypto community, “hodling” and “trading.” Many traders decide to either hold tokens, trade them, or do a mix of both trading and holding.

If this the first you’ve heard of the term “HODLing” it means to buy tokens or open trades that will be opened for months or even years. On the other hand, trading tokens to make profits from fluctuations in the price or tokens in a crypto exchange.

You can also say trading is taking an active approach towards growing one’s portfolio, while holding is taking a passive approach towards growing a portfolio.

Question 1: Do you hold any coins? Talk about the wallet type you prefer/would prefer holding in.

While I’m profit-oriented when it comes to cryptocurrency, I like to hold tokens that I feel are undervalued by the market. Currently, I’m holding SafePal ($SFP) and Rope Token ($Rope). These are two tokens that I feel are currently undervalued with respect to its price. SafePal is a Binance launchpad project and Rope Token is a fast growing token from the Solana blockchain.

Here is a table showing the market data of the two current tokens that I hold.

	SafePal ($SFP)	Rope Token ($ROPE)
Price	$2.3	$1.87
Circulating Supply	108,166,667 SFP	3,000,000 ROPE
Maximum Supply	500,000,000 SFP	10,000,000 ROPE
Blockchain	Binance Smart Chain	Solana

From the maximum supply of Rope Token, it can be observed that it only has a maximum supply of 10,000,000. Hence, when it is listed on a major exchange the token token price will sky-rocket. A token with such supply, ought to be worth about at least $20 when in a established exchange.

While I bought the tokens, I’ve been scalping the price fluctuations of $SFP since last week, it was just few days ago I have been considered the idea to hold for long term. Since I do not know when the bear market will arrive, I want to continue to prepare myself for it.

Wallet

When it comes to holding tokens, I prefer to hold them on a mobile wallet or an exchange wallet. Nevertheless, I have all three; mobile, exchange and web wallet. My preferred mobile wallets are Trust Wallet and SafePal Wallet, while my exchange wallet is Binance wallet and my web wallet is Sollet wallet.

^{My SafePal Wallet on Privacy Mode}

For the purpose of this article, I’d focus on my SafePal wallet – which is an mobile wallet. An mobile wallet is great to me because I can easily access the tokens when I want to trade them. I can send the tokens from SafePal wallet to an exchange they are available. However, in the future I intend to get a hardware wallet so that I can store the tokens that I am holding safely.

While an exchange wallet could be hacked, a hardware wallet gives a form of protection. It’s worth the price if you count the safety and assurance that it gives users. So, that’s my future goal. For now, I’d stick with my current wallets.

I also prefer my mobile and web wallets over the exchange wallet because I have the private keys to them. Unlike in my exchange wallet, I was not given the private keys.

Question 2: With screenshots, show how to perform Spot Trading on any pair of your choice.

In cryptocurrency, a spot trade is simply trading in an exchange where able to buy or sell coins or tokens instantly. That is quite different from futures trading that is at a predetermined future time. Spot trading is very common in crypto. Gradually, many crypto lovers are getting to love this form of trading.

In order to trade in an exchange, like Binance, I simply buy USDT with fiat. Then, I trade the USDT for any token of my choice. I’d be attaching some images to show how this is conducted seamlessly. Well, if P2P is used to buy the token, a user will have to trader the USDT to the spot account in order to trader the USDT for another token.

How to trade SFP/USDT on Spot Trading (Binance)

Step 1: Search for the pair you want to trade. In my case, I searched for SFP. Since I want to trade SFP/USDT.

Step 2: Click the buy or sell button. Since I already own SFP, I can simply click the “sell” button.

Step 3: Input the price in USDT that you will like to sell the token and the amount of the token you want to sell. I selected “all” in my case.

Step 4: It will appear in Open orders till it is executed.

Question 3: Holding or trading, which do you prefer and why?

Actually, I prefer holding tokens over trading them. In the past I’ve had some regrets over trading tokens too early. For example, I can trade a token for USDT and a profit, and within the next hour the token goes double its price. In that situation, I feel it’s too risky to enter back into the trade.

While technical analysis and fundamental analysis helps one to determine uptrends and downtrends, they are not always accurate. I’ve traded tokens during a breakout only to discover that it was a fake breakout. So at the end of the day, I had to cut my loss short.

For the past few weeks, I’ve been holding $DATA. I initially entered the trade with about $100. Within few hours I was at profit of over $30. I decided to continue to scalp the price a few more times because it was breaking out. I had an emergency, on getting back home it was dumping.

The token dumped so hard, that I had to buy the dip with another $50. Currently, my $150 investment in that trade is worth $107.30. As at last week, it was worth less than $90. It’s only going up because the market has began recovering gradually. If I was simply holding the token, I wouldn’t have such problem. But because I’m trading it, it has some of my trading funds locked in it.

On the other hand, when I hold tokens that are well-grounded fundamentally they are often productive. I’ve been holding $VITE since 2018, and this year it did a massive 10x the price and was a Binance top gainer a couple of times. So when funds are available for holding token, I think it’s less stress that trading just any token.

Conclusion

The fact is an experienced trader often have a mix of tokens that he is trading or holding. For a newbie, it’s safer to simply hold the tokens, because he may lost it if he executes bad trades. It takes a couple of years for one to become a better trader. Even people that have been trading for over half-a-decade will say they are still learning.

I’d say one’s choice to pick between trading or holding depends on risk appetite, goals individual traits, etc. Nevertheless, trading and holding can be both productive depending on one’s research and analytical skills.