With all the market volatility these days, YouHodler thought we’d give our loyal community a few tips and tricks on how to use the Multi HODL feature most effectively. For “active HODLers” looking for more flexibility and opportunity in growing their portfolio, Multi HODL can be a highly valuable tool. Multi HODL offers automation, convenience, and sophistication to help you fully capitalize on all market opportunities. That being said, Multi HODL still involves some risk and hopefully, this article will help you navigate the tricky waters of crypto more efficiently.
What is Multi HODL and how does it work?
We’ve explained this a few different times in the past but just to catch all the newcomers up to speed, using Multi HODL helps users buy or sell more crypto with the help of a loan. To illustrate how this works, let’s use a quick example.
Bill is an active HODLer and he wants to obtain more Bitcoin (BTC) than simply buying it on an exchange and waiting for it to rise in value. So, Bill chooses BTC in Multi HODL with the maximum multiplier (x8.78) in the “Up” direction. This gives him the potential to earn more than 5 BTC, five times more than he would have earned if Bill just bought Bitcoin on an exchange.
If the market goes in the direction he picked, then the value of the loaned crypto increases in value, covering all the Multi HODL commissions, and leaves Bill with the rest for profit. The same scenario can be applied if you choose the “Down” button but instead of YouHodler lending your crypto to buy, we lend it to sell (similar to opening a short position on a crypto exchange).
It’s important to realize that profits are not guaranteed and some level of risk is involved. Hence, it’s helpful to know a few key tips first before opening your first Multi HODL.
The Best Multi HODL strategies
Adjust your standards accordingly - As with any financial activity on the cryptocurrency market, it’s helpful to know what you are getting into before you do it. YouHodler believes in full transparency which is why we clearly outline all terms and conditions of the Multi HODL deal before users partake in it. It’s your responsibility to fully comprehend all this information before diving in. Furthermore, don’t use Multi HODL for purposes such as retirement funds, funding a down payment on a house, or your child’s education.
Try to avoid margin call - Reaching the margin call level means YouHodler is forced to close your Multi HODL automatically at an inopportune time. This locks in your losses and prevents you from catching the next rally. To avoid this, make sure you have good knowledge of the cryptocurrency market movements, keep a close eye on your open Multi HODL positions, and make sure it does not go below the margin call level.
Know when to exit your Multi HODL - Whether you’re winning big on a Multi HODL deal and think you can win even more or you’re losing and have faith you can dig yourself out of the hole, it’s always important to know when to cut your losses/profits. Before you enter a Multi HODL, try setting a target price that you hope to reach. You can do this via the tool’s “Take Profit” feature which will automatically help you close the deal so you don’t miss out on any profit from staying in the Multi HODL too long. Furthermore, set a mental limit of how much you’re willing to lose before closing the Multi HODL and stick to that amount.
Try the Lock Trading Strategy - Think of the crypto market as a roller coaster. There will always be ups and downs. Therefore, by opening up two Multi HODL positions simultaneously, you have a 50/50 chance of profiting because you know the market will either go up or down. This strategy is called Lock Trading and we have a full article that goes into more detail for you.
Try Multi HODL first - Just as you would take a car for a test drive before buying, the best way to excel in Multi HODL is to test with small amounts first. This will give you a great opportunity to experience all the benefits of this feature as well as the various risks and costs of Multi HODL on a small scale. Playing with small amounts first can help you develop a disciplined strategy that works well for you before applying that to large amounts.
Multi HODL is all about balance (understanding the Barbell Strategy)
Multi HODL was partly inspired by the Barbell Strategy. By leaving the majority of your funds in YouHodler savings accounts and take some portion to use in Multi HODL, you are thus guaranteeing the majority of your assets are safe and earning interest. Meanwhile, the smaller portion is set aside for riskier activities which will generate higher profits if successful. Being 100% passive is not the most productive way to HODL crypto but you don’t have to be a full-time, risk-taker.
So try the Barbell Strategy to get the best of both worlds for an optimized, balance and profitable portfolio.
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