HODL is a misspelling of the word ‘hold’ used to represent the buy-and-hold strategy within the cryptocurrency community.
People who practice this strategy are known as HODLers – they buy and hold their positions irrespective of the price.
It is a good strategy for people who have enough patience and time to see it through.
HODLing has landed a good number of people their lifetime fortunes but is it the perfect strategy? Particularly when compared to portfolio rebalancing. I think not.
Portfolio rebalancing is the trading of coins to set the weight of each asset back to its normal percentage.
If you are looking for short-term success in the crypto market, you will need to understand these two concepts and find a way to blend and practice both.
Stats show that hourly rebalancing your portfolio is 234% more profitable than HODLing.
Finding the right balance
It is advisable to HODL between 8-10 coins because you wouldn’t want to keep all your eggs in one basket.
HODLing more coins will mean, more stress of managing them, more exchanges, more wallets, and ultimately more chances of losing money.
It is best to HODL just as much as you can manage.
After finding the right amount of cryptocurrency to HODL, the next step is frequently balancing your portfolio.
Determine how much percentage you wish to allocate to each coin and see that you are disciplined enough to stick to the plan.