​​#Useful_notes
Buy and Hold strategy: basic principles

Buy and Hold is one of the most common trading strategies on the cryptocurrency market. Like many other tools and strategies, this one has also come to the digital currency segment from classic trading. However, in the conditions of the crypto-currency market, it gives a greater result and profit. In this article we will understand what is Buy and Hold strategy.

HOW DOES THE BUY AND HOLD STRATEGY WORK?

In fact, Buy and Hold strategy assumes a long-term investment. Its main principle can be interpreted as follows: the longer the investment period, the greater the profit will bring this investment to the trader. However, such a strategy works only if two factors are observed:

Reasonable prediction.
Presence of market growth for a long period.
Some traders use Buy and Hold strategy as a safety net. For example, imagine that you bought bitcoin for 15 thousand dollars, then it grew to 20 thousand dollars and fell sharply to 10, and you do not have time to throw off the coins. Then, to reduce the loss begins the waiting period. The main goal is to wait for the rate increase and merge bitcoins at a more favorable price than the current one.

BUY AND HOLD: STRATEGY STAGES

Actually, according to the name, it is easy to understand that the Buy and Hold strategy includes two stages:

Purchase, or rather - the choice of asset. The most important thing in this strategy is not just to buy some cryptocurrency, but to choose a suitable object for investment. This is usually done using fundamental analysis methods. If the investor does not own them, then he must at least analyze the coin according to current data-how interesting it is today, how interesting it will be in 1 year, 2 years, etc.
Next, there is only the retention of the asset. It would seem that everything is simple - just keep it. In fact, it's very difficult. The constant fluctuations make you think, and whether the asset you have put, maybe it is time to sell, etc. Usually beginners do not withstand such an onslaught and drained all their savings.
It should be noted that unlike the classical market, where investments can be held for decades, in the cryptocurrency segment this period is usually significantly less - from several months to several years.

BUY AND HOLD STRATEGY: ADVANTAGES

1. Simplicity. All an investor needs to Buy and Hold is to choose an asset and wait. No need for regular analysis, continuous surveillance of market and etc. In this regard, this strategy may be the ideal option for beginners.
2. Time saving. Here again, the role played by the lack of need for daily market analysis. This allows the trader to easily combine Buy and Hold with other short-term strategies.
3. Profitability. Buy and Hold strategy can bring hundreds or even thousands of percent of profit with the right choice of crypto asset.

BUY AND HOLD STRATEGY: DISADVANTAGES

1. High volatility. Jumps of 50, 100 and even 200% are common in the highly volatile cryptocurrency market. Accordingly, without using such differences, the investor loses his profit.
2. High chance of failure. In the long term, it is very difficult to predict the behavior of the cryptocurrency market. Besides, the chance of its falling is much higher than the chance of its growing up.
3. Freezing of funds. As long as you hold your coins, they are completely frozen in the account – you will not be able to use them.
4. Attachment to large sums. Buy and Hold strategy cannot be applied to small amounts. It makes sense to use it only if there is a large start-up capital.
As you can see, Buy and Hold strategy has both disadvantages and advantages.

We will not recommend it for use or not. You have to evaluate the pros and cons and make a decision.