What is more profitable? Trading VS Holding

Hello Trader! Today we are going to compare two very different ways of investing in the stock market. As he day trading As the hold are investment strategies that often go hand in hand. It is very rare the trader who does not hold some assets, such as stocks or cryptocurrencies, for several years. So today we are going to explain what both strategies consist of and how you can apply them to your portfolio. Trading is the process of purchase and sale of assets frequently, and often at regular intervals, while holding is simply holding the assets you buy until their prices rise over the years.

The question now is:

What is more profitable?

To make the answer more understandable, we will explain the advantages and disadvantages of each one: trading advantages

A) Control: In trading, you can establish an investment strategy, with a clear entry and exit, and on the same day. This allows you to have greater control over the decisions you make with your investment.

B) You make more money (if you do well): This is because you are buying and selling assets with a relatively large investment, in a short period of time. While holding you have to wait years to get a 3% return, for example, by day-trading you can get a 1% return in a couple of hours.

C) More ability to predict the market: When trading you have tools that show you how the market works. This is very useful because you are forced to understand it, and as I was saying

The Big Disadvantage of Trading

By trading, you run the risk that trades are poorly planned and your trade ends up in loss. Advantages of holding Generally, most people are of the opinion that trading is more profitable. However, it must be taken into account that trading has a higher commission and a higher probability of loss. While trading makes money immediately, holding requires a longer period of time to generate significant profits. In addition, the hold does not have the risks that trading has. The hold does not have commissions or the same probability of loss. However, the hold has a slight chance of generating losses due to inflation.

Disadvantages of holding

The hold has the disadvantage of not giving you the experience of buying and selling assets, so you will not be able to develop a diversified portfolio. This means that you are exposing yourself to a greater risk, since you will not have the tools to manage the risk, nor to choose the assets well.

What is more profitable?

Most traders believe that trading is more profitable, although they assume a much higher risk than holding. For this reason, we recommend making investments in both styles. There are more favorable assets to invest in years ahead, and others that can give you good profits in a matter of hours (if you operate correctly)

Finally, we want to remind you that you can continue learning Trading in the best way with the Download Trading Platforms Masterclasses, with 40 financial training sessions full of educational and human quality, which will help you order and structure the market with a head.

We hope to have helped you once again, may the market be with you!

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