How is Day Trading Different from Long-Term Hodling? Pros and Cons


Day trading and long-term hodling are two of the most popular trading methods. This article sheds light on their pros and cons and how to choose them for best results.

What is Day Trading?

Day Trading is a short-term trading strategy that entails investors creating and dissolving positions for less than 24 hours. Day trading positions can last from a few seconds to several hours.

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Day traders intend to take advantage of the smallest price movements in the crypto markets. Day traders can use leveraged positions or HFT trades to gain substantial returns on their investments.

What is Long-Term Hodling?

Long-term investment or hodling is a term that is used to describe investors retaining their positions for months or years at end. On this account, investors seek to generate profits on account of slow but continuous price appreciation of the assets over long time duration. 

Long-term investment is less risky and can be done using fundamentals rather than focusing on technical indicators employed in day trading.

Pros and Cons of Day Trading and Long-Term Hodling

Here are some good and bad sides of Day trading stacked against Long-term trading positions:

Pace of Trading

Day traders have the liberty set their own pace for printing profits. They do not have to wait for long durations in order to make substantial profits. Meanwhile, long-term investors do not have to rush their trading activity to generate maximum possible gains.

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They can continue to invest amend their trading positions at slow and steady pace using techniques such as DCA or Dollar-cost Averaging.  At the same time, tax obligations for long-term investment profits are usually smaller than short-term conversions.

Risks Factors

Day traders deal with considerably higher risks in comparison to the long-term trading positions.  However, as a general rule the higher risks usually translate into higher profit percentage potential as well.

The upside for hodlers is that they employ smaller risk exposure from the trading positions which reduces their potential to experience losses.

Leveraged Positions

Leveraged positions are created with borrowed funds that are secured by collateralized accounts. Leverage positions can increase the risk ratio for a given trading positions by many folds. Day traders usually depend on leveraged positions in order to generate considerable returns.

On the other hand, long-term investors usually increment their trading position at regular intervals rather than using leveraged trading positions.

Bear Market

During bear markets, day traders can make considerable gains. They have the option to short cryptocurrencies that have a lowering price expectation. However, long-term traders usually do not opt for shorting positions and they can stand to lose the value of their investment.

Nevertheless, over a long duration they can recover and salvage the value of their investments. Some investors can make gains by investing in mid-term and create short positions to benefit from the bear market.

Duration of Returns

Day traders can earn profits at faster rates. It means that they can trade for a few hours and have the rest of the day free to work on other projects.  Meanwhile, investors that are depending on the long-term trading positions have to wait for years to realize profits.

In this instance, the investors have to stay alert about the every new market development to ensure that their investment is not drowning.

Trading Skills

Day traders need to be at the apex of their trading skills. They have considerable experience and they are expert at conducting market analysis. They require sharpen technical analytical skills and depend on refined risk management strategies.

On the other hand, long-term investors can start by opening smaller positions with relatively limited risk exposure. They can begin by investing in the most profitable trading options in their niche market to ensure their rates of success.

Market Exposure

Day traders have to amass substantial market exposure in order to register considerable gains. On the other hand, long-term investors can start at beginner level also.  


Day Trading and long-term investing are suitable for different traders based on their skills, goals, and trading conditions. Every investor should consider their personalized requirements and approach the crypto sector with their goals in mind.  

Author: Isacco Genovesi

Isacco writes news articles, reviews and guides about cryptocurrencies including technical analysis, blockchain events, coin prices marketcap and detailed reviews on crypto exchanges and trading platforms.

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