Long Posts

The Complete Guide To Hodling |How Can Traders Hold Their Positions And Hit The Jackpot 

In this post, I’ll discuss hodling and we’ll look at a few things that’ll make you a better hodler – guaranteed!

I’ve been asked many times if I’m into cryptocurrencies. The answer is yes, I am, but I don’t actively trade them.

I got into Bitcoin in 2017 when it soared to the 19k levels. It’s funny because right when I got in, I tweeted this:

And, of course, Bitcoin crashed right after…

At the time, I only got about $1000 worth of BTC and it was just intended to be ‘lottery play’ for me.

I didn’t even look at the chart when I decided to buy and didn’t intend to manage it like one of my “normal” trades.

So, win or loss, I didn’t care in the least.

Now, a few weeks ago, upon reading a series of articles, my interest in cryptocurrencies got ignited once again. This time, it wasn’t Bitcoin that caught my attention but XRP, the third-largest digital asset after Bitcoin and Ethereum.

This time around, I decided to treat it more like an investment, which means with the respect it deserves and not as a pure gamble.

So, I did my due diligence, analyzed the chart… and eventually, I went ahead and bought some XRP.

This is just an opinion and no financial advice, but I think cryptocurrencies are something to be part of —like the tech bubble in 00s – and I’m slowly in the process of building myself a portfolio of cryptocurrencies (with money I can afford to lose) with the sole intention of letting it sit in a corner and forgetting it.

No stop loss, no active management, just hodling.

What is Hodling?

Hodling is the act of buying and holding a crypto-currency (say, Bitcoin) regardless of price.

In trader’s lingo, hodling is the act of riding the trend – but not only that, a holdler stays invested, whether the market is up or down in the short term because he/she is confident in the long-term value of the cryptocurrency and is, thus, determined not to capitulate in the face of plunging prices.

The term was used in 2013 in a cryptocurrency forum by an investor who was watching Bitcoin’s price fall sharply but then proclaimed that he would be “HODLing,” meaning to write ‘HOLDing.’

From there, people turned it into a vivid acronym: Hold On for Dear Life.

In fact, the term is so popular now that it made it into Senate testimony.

Commodity Futures Trading Commission, Chairman J. Christopher Giancarlo had this to say about Bitcoin:

When it’s used as a store of value, then it’s very much like an asset, like a commodity. In fact, what we hear a lot of, is people buying and holding. If you go on to the Twitter universe you’ll see a phrase ‘H-O-D-L,’ which means hold on for dear life.

But let’s be really serious for a second: Most people buying cryptos say they’ll do just that – hodl for dear life and to the moon — but the reality is that most won’t.

Being a trader, I know this as a matter of fact.

Hodling is easier said than done. Ask any trader who’s been trading for at least a year and they’ll tell you: letting a trade run for max profits is one of the hardest things you’ll ever do.

The market is a tameless beast – it will shake even the most determined people out of their positions.

Hodling requires a strong pair of hands and a particular state of mind that the average person just isn’t equipped with.

But, the good news is that it’s all learnable!

Let’s dive in and see how you can increase your capacity to Hodl and hit the Jackpot.

Have a Plan

A plan is your roadmap for what you want to achieve in the market, and it outlines the steps you are going to take to achieve those goals.

That plan can list whatever works for you, but it should break your goals down into a process that’s simple and easy to implement.

If you don’t have a plan that’s both realistic and easy to implement, you’re going to have a hard time achieving anything as a trader or investor.

Because if you’re operating without a plan, without a logical framework, based on your whims and fantasies alone, you’re essentially shooting in the dark, and the results you’ll get are going to be random.

So, the stakes are high – creating a plan and writing it down is unfortunately not optional.

Not convinced? Here are five additional reasons why you need a plan.

Put Limits on How Often You Check Your Positions

When you check your positions every second of every day, you’re not accomplishing anything significant, you’re just looking for a quick dopamine rush ―that ‘feel good’ effect.

It’s an addiction that’ll eventually get you into trouble.

If upticks and positive news give you a buzz and downticks and negative news make you depressed, you are pursuing trading or investing with a gambler’s mentality.

And the result is that you’ll have a very hard time hodling anything. You’ll end up buying and selling at the wrong time because you’re not using your mind in a controlled and rational way, you’re letting your mind control you.

So, you have got to find a way to overcome this tendency of checking your positions in an untimely manner and just let your trade/investment work.

For most traders, the phone is where it all starts…

Brokers and tech companies are incentivized to keep your attention in their websites and apps because the more you do, the more you’re likely to trade. And when you trade, they earn.

So, they have all the reasons to send you notifications, news and updates all the time.

By the way, this is one of the reasons why I haven’t owned a phone for the past 7 years.

I used to be a monk and spent about 6 months of my life living in Buddhist monasteries away from society and technology.

It’s a very simple and quiet kind of life, and, I remember, it took me a long time to adjust to that.

But, eventually, I did, and I noticed improvements in my attention span and my capacity to focus and be disciplined.

I was also less neurotic, less obsessed, less addicted, happier… so when I left that life behind and returned to my ‘normal life’, I decided that I wouldn’t own a phone again.

I’m not a technophobe; obviously, I use computers… I just believe in living consciously.

And I don’t feel I’m missing out on anything; in fact, my trading has benefitted from my not-owning-a-phone because I’m not constantly checking the news, my positions, or the market.

I’m just letting things work the old fashioned way, and I’m not sabotaging my progress along the way.

Put Limits on How Often You Check Social Medias

Again, when you scroll social media looking for opinions and news about the positions you currently hodl, what you’re really looking for is a quick ‘feel good’ effect.

It’s a bad habit that you’re reinforcing because:

  1. You’re seeking confirmation for your investment. This is investment psychology 101 – when you only pay attention to information that matches your opinions, it’s very easy to get trapped in a bubble that’s miles away from reality.
  2. You’re conditioning your mind. You’re caught in a loop of watching videos or looking at people’s opinions over and over…. and once you’re in the rabbit hole, it’s difficult to get out.

And that’s what gets most people into trouble: Good news makes them excited and buy high out of greed. Bad news makes them depressed and sell low out of fear.

If you want to become an exceptional trader or investor, you need a different mindset; you need a different approach.

So, maybe think of setting appropriate limits for your social media use.

An example is that you could decide to only look at Twitter once or twice a week.

This is just an example — the right limit is one that feels workable for you because the goal isn’t to eliminate all sources of information and be completely shut off from the online world.

The idea is simply not to be controlled by information or technology; it’s to stop reinforcing bad habits and to become more discerning.

When looking for information on Social Medias, choose your sources wisely.

For instance, on Twitter, follow accounts that help calm you down, cultivate perspective and clear thinking… not those that elicit volatile emotions within you.

If you’re not following me on Twitter yet, now might be a good time. I don’t share my opinion on what the market is doing – I let others do that. I only share wisdom, tips, and insights to inspire and motivate you on this journey.

Your attention matters —give it to the things and people that make your life better, not worse.

Pick a Replacement Habit

What do you want to do instead of being so obsessed with your positions?

Pick something positive, constructive, or even fun that you can do every time the urge to check your PnL, news, or social media arises.

That might be reading, working out, painting, meditating…

And speaking of meditation,

Meditate Consistently

A consistent meditation practice will help you construct a base level of awareness and discipline, both of which are key qualities to have if you want to be able to hodl like a pro trader or investor.

Think about it: how can you expect to hodl for max profits if you can’t even sit in meditation and stay with something as mundane as your breath?

When you focus on your breath during meditation, you are training your mind to be steady and consistent, so that you can begin to display such qualities when hodling.

The practice can help you develop an incredible amount of patience, emotional resilience, and self-restraint.

Our minds are always active, rarely quiet. And all-too-often, the chatter goes into directions not worth going.

That’s why meditation is so helpful ―it helps you reclaim your attention, which gives you greater control in your life.

Most meditation techniques, at their core, are actually methods for doing less, expecting less, judging less and being more spacious and open — which provides insight and facilitates wise discernment while breaking free from overthinking.

And it’s a dynamic process that carries over into everything you do.

If you don’t have a practice, I invite you to integrate one into your life.

If you already have one, but find that you’re still not noticing any significant changes, then i would say that:

  1. You’re either confused about the practice and the insights you’re supposed to get,

Or,

  1. Maybe you haven’t gained any insights at all because you aren’t practicing correctly.

Meditation is about living an examined life. If you’re living an examined life, something fundamental has to change about you.

In the Trading Psychology Mastery Course, there a whole section on meditation and I show you how to build an industrial-strength practice, not a flimsy one.

All in all, if you are a trader or an investor and don’t have a practice, you’re not maximizing your chances of success.

Don’t Trade or Invest With Money You Can’t Afford to Lose

This should go without saying. The reason why you might be obsessed with how your positions are doing on a moment to moment basis is that you want it to work.

Fair enough… Who doesn’t, right?

But the other possible reason is that you could be trading or investing with money you can’t afford to lose.

And so, you NEED that trade or investment to work; you’re attached to that outcome, hence, the obsession.

But you see, if you need something to work that bad, adverse market moves (even small ones) will threaten you and shake you out of your positions.

You might also live in a bubble of confirmation bias that you’re not even aware of which makes you see only what you want to see, instead of seeing what’s there to see.

This, too, isn’t optimal if you want to be and stay an objective actor in the market.

If at any point your mind is insecure about money, you will generate stress, worry and this will make hodling very difficult.

On the other hand, if you trade with money you can afford to lose, hodling will be effortless. You will see things more clearly and make better decisions overall.

Here’s a whole article about money and why it shouldn’t be your primary goal.

Cultivate Self-Awareness

When you initially bought, your goal was to hodl to the moon, right?

But, in the heat of the moment, when volatility creeps up and prices start to fall, it’s very easy to forget this.

Again, mindfulness is key here.

Notice when you have an urge to get out.

Pause, instead of acting on that urge, and just sit with it (mindfully).

Try to notice where the physical sensation of that urge is located.

Is it in your stomach? Throat? Head? face?

Focus on that area and try to notice the sensations you feel. (You’re not adding a value judgment to what’s being noticed, you’re just noticing it as it is.)

Allow those physical sensations to arise and peak, crest and subside… a bit like a wave.

You can do this for a minute or more, and after the urge subsides (it will), it might come back (it also will), but you can repeat this.

This simple mindfulness exercise is very effective because you are interrupting the part of your brain that just wants to act immediately on urges.

You’re also learning to see that the urge isn’t anything urgent at all. It isn’t a command, it’s only a suggestion, and you can learn to distance yourself from it and experience it differently, with greater wisdom and clarity.

This is the basis for any rational decision in investing, or more generally in life.

Remember: Things Can Take Time

Sometimes you’ll get into a trade and things will happen right away.

But, often, they don’t.

That’s why you have to keep your expectations aligned with the realities of the market.

If you expect things to happen at the snap of your fingers, you’re setting yourself up for disappointment.

Instead, realize that things will take time –some scenarios might take years to unfold if they do.

In the short term, the market will go up and down, then up again, and down again… and it’ll shake out those with weak hands.

So, take the long term view, practice patience, and stay hungry. If history has shown us anything it’s that visionaries (those who are open to seeing the unseen) eventually get rewarded.

Memento Mori

We’re only on this Earth for a short period of time, and I can’t even begin to express how exceedingly miraculous and awe-inspiring this all is.

Don’t waste this life… every second count… Live consciously by deciding wisely where you want to place your attention and how you want to spend your time.

Remember this: eventually, wealth has to be given up. So while you’re still there, enjoy it if you have it, work towards it if you don’t, but, at the end of the day, try not to make it the centerpiece of your life.

Focus on making a positive difference in the world.

Love, presence, forgiveness, spirituality, philosophy… all these things matter much more than you might think.

Conclusion

I hope you found this post about hodling helpful. Don’t worry about doing these steps all at once… one of the most important steps in this list (I think) is developing an industrial-strength meditation practice.

Once you have that, you’ll start living your life with greater awareness and all the other things will naturally fall into place.

This awareness muscle will allow you to insert a small space between a mindless urge or a bad habit and your subsequent action.

Within that space, however small, you can eventually make a better choice. That is where the power lies.

But, all in all, look at this as a learning exercise – you’re learning to become a real trader or investor, a rider of uncertainty, instead of being just someone that relies on dumb luck.

That said, I wish you all the best. May your efforts be profitable beyond your wildest dreams.

 

If you think you might benefit from my guidance in developing a strong, patient, and fearless trader’s mindset, then check out the Trading Psychology Mastery Course.

For a small investment, this might be the exact program you need.

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Yvan
I've been trading for a living since 2006. By merging mindfulness (an in-depth study of the mind and its tendencies in the present moment), a good trading process, and an efficient business practice, I went from being a losing trader to a consistently profitable one. Through my work here at Trading Composure, I aim at helping you do the same.
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