If you have ever traded any asset class, then you’ll know that it is a very emotional and psychologically taxing process. When I say emotional, I don’t mean that it makes you want to cry. I’m referring to the unsolicited emotions that creep up on you which stop you from making logical decisions when entering and exiting trades.
Succumbing to these emotions may certainly feel like the right thing to do in the moment, however more often than not, they will be the deciding factor in whether you end up making money or losing money.
For this reason, it is essential to conquer your emotions when trading in order to make money in NFTs. Here are my top tips on emotions and signals.
#1 Greed = Sell
This emotion is one that will creep up on you when you’re in profit and everything is working in your favor. Your NFT token will be ‘mooning’ and all you will be thinking about is how you’re going to spend your new fortune. Your mind will tell you that the token is going to keep increasing in value forever, which means that you will not want to sell. When you start feeling this greed, it’s time to consider selling.
#2 FOMO = Do Not Buy
FOMO will create spontaneous urges for you to buy into projects before you even realize what you’re doing. If you see the value of an NFT token shooting up, you’re likely going to want to get involved. Usually, if you see or hear of an asset ‘flying’, it’s already too late.
If you succumb to this FOMO and buy in, it’s likely that you will be buying near the top. For this reason, if you begin to feel an intense sense of FOMO, then please check all secondary market metrics to make sure that you’re not going to be used as someone’s exit liquidity.
#3 Confident = Be Cautious
When you go on a winning streak of flipping NFTs, it’s easy to become overly confident. This euphoric feeling can quickly lead you to take on far riskier trades. While this is a good thing the majority of the time, it’s always worth paying attention to. Even if you go on a large winning streak and multiply your entire net worth, we’re all only ever one bad trade away from becoming broke.
If you’re just starting your NFT flipping journey, then I’m glad that you have read this as it could potentially save you from a few losses. If you’re an experienced NFT trader, then no doubt that you would have felt some, if not all of these emotions when trading. Refer back to these tips to help you progress in your NFT trading journey.
For more tips on how to trade NFTs, read our exclusive interview with one of the most successful NFT traders in history.