About Lesson
A decision on what to buy also needs to take into account if you are investing or trading. The two are easily confused, but there’s a difference. Put simply, investing involves picking assets that you believe in and holding over a longer time. Such a strategy involves a less active time commitment and usually carries much less risk.
In contrast, trading aims to make short or medium-term gains through regular buying and selling. Becoming a good trader takes a lot of time and practice. A trader needs to develop more complex strategies, dedicate more time to analyzing markets and trading platforms, and handle more risk. They also need to consider the money spent on trading and transaction fees.
Keep in mind that cryptocurrency markets sometimes present more volatility than traditional ones. While traders need volatility to make profits, high levels of volatility may also bring high risk.
For beginners, investing is by far the easiest and safest option. Investors are usually thinking in terms of years, so short-term price changes aren’t that important. A decision to invest is based more on the fundamentals of a coin (how solid is the project and how likely it is to succeed in the long run).
Some prefer to invest and not worry about short-term fluctuations. Others prefer to trade often in an attempt to maximize profits. Some even do both at the same time. It all depends on your strategy, profile, and risk tolerance.
Again, the decision is yours, but you should never invest or trade with funds that you cannot afford to lose.
With all that said, if you want to learn more about crypto day trading and swing trading, you can find more information in our Complete Guide to Cryptocurrency Trading for Beginners.
