S4B Crypto Contest - Season 18

Hello everyone,
It's your favorite Steemian @rakiya from Nigeria and I'm delighted to join in this contest organized by @waqarahmadshah in this noble community today. It's a wonderful contest and I love to share my participation in it.

Source

How does staking differ from trading in terms of risk?

Based on my little research and knowledge, I want to firstly explain what staking is all about and what trading is also all about before I will say how staking differ from trading in terms of risk.

Staking is the process of locking your asset to contribute to the liquidity pool of any cryptocurrency investment and you earn an APY of certain percentage or possibly earn new coins. A good example is the powering up of our Steem token and using the Steem power to vote.

Trading on the other hand has to do with the prediction of either market going up or coming down. When you predict that the market is going up and it does, you earn rewards based on the amount you put in the trade and if you predict that the market will go down and it does then you will also earn rewards based on the amount you put in the trade.

If this prediction doesn't go in the appropriate direction then you will not make profits instead you will make a loss and that means part of your money or all maybe lost.

Trading is much more risky than staking because staking doesn't reduce the amount of your asset it only reduce the value of the price is going down. But when trading your amount can drop from $10 to $5 if market goes against you.

What factors should one consider when choosing between staking and trading?

Source

Before choosing between staking and trading, you must be sure to have the technical knowledge of both and then know which is best for you. Trading helps you grow faster if your prediction all goes in the predicted direction whereas staking growth is a slow one.

Similarly as it is faster for trading to help you grow so also it is faster to make you lose especially if the market goes against you. So all you need is to know them both and know when you should trade and when you should stake.

So in my opinion having the knowledge of both is the first and basic factor that must be considered before going into trading or anything of such.

How do staking rewards differ from trading profits?

Source

Staking rewards differ from trading profit in the sense that staking rewards doesn't come immediately instead it takes a little time. For instance when using your Steem power to vote, you earn your rewards only when the post pays out. In the case of trading you will see the reward instantly especially when the market goes in your favour.

So staking rewards also are locked and can't be used until after the period of staking whereas the trading rewards can be used anytime.

I want to invite @ruthjoe, @josepha, and @dave-hanny to join the contest also.