As discussed earlier, there are several types of bitcoin trading strategies. The buy and hold approach is a passive strategy where positions are held anywhere from weeks to years.
There are multiple benefits to this:
Buying and holding bitcoin allows you to bypass its short-term volatility. It’s not unusual to see significant movement throughout any given day which can mean your stop loss and take profit targets are easily met, throwing you out of your trade.
This, in turn, can lead to overtrading, and since opening a new position is costly, overtrading can seriously eat into your profits.
As a passive trader, you can keep your position open and potentially earn a good profit with little time commitment, but you still need to have a robust risk-management strategy in place, with carefully considered stop-loss orders.