📈 The Difference Between Investing and Trading in Cryptocurrencies
🔹 First: Investing
Investing in cryptocurrencies means buying coins and holding them for a long period (months or years), based on the investor's belief in the success of the project or the market's future development. It is quite similar to investing in traditional stocks.
✅ Advantages of Investing:
1. Less psychological stress compared to day trading.
2. Relies on the fundamental analysis of the project (such as the team, technology, usage).
3. Suitable for beginners or those who do not have time to constantly follow the market.
⚠️ Its Risks:
* Market fluctuations may lead to temporary losses.
* Requires patience and confidence in the project during downturns.
* Some projects fail, so coins must be chosen carefully.
🔹 Second: Trading
Trading means buying and selling coins frequently to benefit from price movements in the short term (daily, weekly, monthly). Traders often rely more on technical analysis than fundamental analysis.
✅ Advantages of Trading:
1. Quick profit opportunities even in a bear market.
2. Diversification of profit strategies (long trading, short trading, scalping...)
3. Continuous learning to read the market and charts.
⚠️ Its Risks:
* Requires high time and focus.
* Prone to quick losses if protective tools are not used (like stop-loss).
* Significant psychological pressure, especially in volatile markets.
