# NFT Trading Habits By [Origins Research](https://paragraph.com/@origins-research) · 2023-02-03 --- ![https://twitter.com/S4mmyEth](https://storage.googleapis.com/papyrus_images/9ec5b1e8517160fa8c22ec609579894e4e5a1bbe682dc0a4f248993f36d002d2.png) https://twitter.com/S4mmyEth [James Clear](https://twitter.com/JamesClear) sets out some defining moments in his book “[Atomic Habits](https://jamesclear.com/atomic-habits)”. He explains that sequential, small changes can have a significant impact on output or performance when compounding over extended periods of time. Putting the less important decisions on autopilot and using Origins tools to automate processes will free up energy to focus on your conscious brain capacity on the more important decisions. This article looks at the challenges in the NFT space and helps guide the reader to shift known bad habits into positive outcomes. Article Outline --------------- * Background on Habits * The Four Stages of Habit * Plateau and Delay * Habit Changing & Stacking * Application to the NFT Space * Breaking Bad Habits * Your Daily Routine * Revised/Optimized Routine * You’re a Product of Your Environment * Closing Remarks Background on Habits -------------------- We initially need to understand the framework around how habits are formed, and how these can be changed to drive positive outcomes before we apply this to an NFT trading context. ### 1) The Four Stages of Habits It’s said there are four stages of developing a habit. This starts with a cue - something that sets off a craving that drives a response until we are satiated with an appropriate reward. ![Source: James Clear](https://storage.googleapis.com/papyrus_images/0bf9ded030892b71df991cd7812a796ab4ac768ae9011002f6d578535f4724ae.png) Source: James Clear Forming good habits will allow expert traders to identify anomalies in the market, almost subconsciously. The revised systems will enable them to identify opportunities on autopilot, allowing them to preserve energy to make conscious decisions when they really need to engage their brain. It’s estimated that the average person makes [35,000 choices per day. Yet only 122](https://uk.style.yahoo.com/number-of-decisions-we-make-daily-revealed-102938055.html) are informed, conscious decisions. The more we shift the small decisions to our subconscious, the more capacity we have for the more pertinent verdicts. Reducing the number of conscious decisions and saving our brain capacity for vital decision-making can be done by forming good habits. Stacking these habits can drive compounding beneficial outcomes. Hence the thesis of “1% better every day”. The compounding effects of this are astonishing. 378% improvement or a 99.9% deterioration if 1% worse each day over a year period: ![Source: James Clear](https://storage.googleapis.com/papyrus_images/f30190accc66a9760397744e69baf935a5afee9846aab98f373e21ef6f0d3869.png) Source: James Clear But the reason many don’t do this is that we don’t see the immediate positive impact of the habit changes, it takes time for the benefits to be realized. So imagine if we were to apply this to our NFT habits. We may not see equivalent compounding upticks in our wallets, but it will surely contribute to having an edge over the degen on the opposing side of the trade. ### 2) Plateau and Delay This is illustrated well through the plateau and delay diagram below. ![Source: James Clear](https://storage.googleapis.com/papyrus_images/63e342452c6dfd1ca995d2d9d93825478138fd10d3c34bf7419525e72edb0c8c.png) Source: James Clear We are inherently impatient as humans - that valley of disappointment affects us. Yet if we take a short-term view on a subject then this generally adversely impacts us in the long run. [NFT\_God](https://NFT_GOD) talks about this in his [recent newsletter](https://www.1percentbetter.io/p/a-short-term-mindset-will-kill-you) after falling victim to a hack. This is especially true in NFT trading. Many participants have [shiny object syndrome](https://twitter.com/omega_eth/status/1514335544297222147?s=20&t=KtSH9lzHnjELCyzt1X6FTw) and are quick to move on to the next thing that grasps their attention. The same can be said for habits that don’t reap immediate benefits. We get frustrated if we don’t see immediate positive changes. But if we resist cravings to give in to jumping on the next hyped mint, then we could be looking where others are not. That will enable us to accumulate valuable projects before the masses “catch wind”. That’s alpha. Applying patience, and focusing less on immediacy will enable a dramatic difference in outcomes. Especially when we compare a year prior, after sustaining these habitual changes for that year. ### 3) Habit Changing and Stacking Once you’ve identified the bad habits, it’s time to decide whether it’s something you want, or can change for the better. We understand the four stages of habits. So once we apply this to a scenario we will be able to identify what the cue is that drives the craving, and alter our response to this. For instance: * You wake up to your phone alarm and immediately associate your phone with social media (Cue). * You have the urge (craving) to immediately jump into Discord and Twitter to scroll through what the hottest topics of discussion are. * However, is this a good use of your morning? * Will you get caught in a dispute over which NFT project or blockchain has better future prospects? * Is there inaccurate information (FUD) circulating without any real basis? * Do you feel satiated with the information you’ve uncovered? (Response/reward). Many feel burnt out from focusing so intensely on certain aspects of the space without giving sufficient time to get rest and recover. If this is you, then it may be a good opportunity to revisit your current routine and mix things up a little. Enter “habit stacking”. This can change the point at which you get the dopamine hit from the habit. If it is something we haven’t yet experienced, then we typically receive this at the reward quadrant (A below). ![Source: James Clear](https://storage.googleapis.com/papyrus_images/e75a7dc12b43db0b499c0da38408ac0c069037a49884b3b45834c01341079958.png) Source: James Clear Unfortunately, once we’ve had the experience before we then receive the dopamine hit at the craving stage (B). However, if we begin to habit stack then we can defer the dopamine hit until later and return to that initial fulfilled experience of feeling like we’ve earned the reward. **For instance**, separate your non-negotiable habits and stack them before receiving your dopamine hit: Your phone alarm goes off. You immediately get out of bed, make your bed, get showered, get dressed, have breakfast and ensure you are fully ready for the day before opening up your phone. All these tasks are considered necessary, non-negotiable habits that should be done before you start your working or NFT trading day (unless you know there is a mint at a specified time of course). By stacking each of these habits one after the other you’ll find they are eventually completed on autopilot. It’s the same brain activity that means you forget your drive to work - you’re aware but your brain reduces the level of conscious decision-making. This then gives you more energy to kick onto the conscious, meaningful, rewarding decisions that provide a more fulfilling day and potentially more important outcomes. There’s a reason the military drill home structure and discipline, and why the Roman army was so successful with their coordinated strategic advances. Let’s take a closer look at the NFT space and understand how these can make you a more effective NFT trader. Application to the NFT Space ---------------------------- In the NFT market, it may be that we see our favorite influencer rocking a new NFT profile picture (PFP). We crave to be a part of the same community which drives us to pull up the collection listing. Once the Metamask transaction confirms our transaction, we feel a sense of reward that we now own a piece of the collection, and can change our PFP. A recent example is the Bankless custom [Smol Brain](https://trove.treasure.lol/collection/smol-brains), rocked by [David Hoffman](https://twitter.com/TrustlessState). ![Source: TrustlessState (Bankless Founder)](https://storage.googleapis.com/papyrus_images/532dc08f28090be7a43418ce38c5265ab55c1759e94026c6bc597a13a5c6a83a.png) Source: TrustlessState (Bankless Founder) While it wasn’t the sole driver of added volume in the Treasure ecosystem, I suspect it was certainly a contributory factor. [https://twitter.com/mikelauofficial/status/1614512292514910211?s=20&t=i1vVnwTglvA00qL3yVgAyw](https://twitter.com/mikelauofficial/status/1614512292514910211?s=20&t=i1vVnwTglvA00qL3yVgAyw) The issue with this current loop is that it’s reactive to publicly available news. If you’re acquiring the NFT after the announcement then you’re likely paying too much, unless you’re intending to hold for the long term. If your research is into areas that show promise but are yet to hit the headlines, then you’re more likely to be a profitable trader. ### 1) Breaking Bad Habits As a trader, it’s important to identify a bad habit and change it. If you’re consistently getting ‘rekt’ on trades, identify why this is. Is it because you’re instinctively jumping into something without having an established investment thesis? Responding and giving in to the craving to acquire the NFT can lead to over-extending your purse strings to acquire that asset - especially if the NFT has no long-term value that can help recoup the initial capital outlay. The weak link in the cue loop here is the response. Twitter is frequently a good source of timely news, but acting on impulse alone can be detrimental. It’s great for identifying themes coming through in the NFT market, for instance, the rise of Layer 2 or scaling solutions to Ethereum’s base layer. * [Arbitrum](https://arbitrum.io/) is clearly gaining traction and getting air time through catching thought leaders in the space ([Bankless](http://podcast.banklesshq.com/)). * We’ve also seen [0xPolygon](https://polygon.technology/) crush their onboarding of large corporate entities onto the Ethereum side chain. So why not use that piece of information to corroborate with other reliable sources to identify other undiscovered locations to deploy capital that fall into the same bucket? We also know that NFT floors are incredibly illiquid, meaning that as soon as the pump is done and volume slows, the sellers begin to undercut to exit their positions. If you bought your Smol Brain on Jan 14th, you likely paid 10-20% more than today. ![Source: https://trove.treasure.lol/collection/smol-brains](https://storage.googleapis.com/papyrus_images/a683d63f77580a9c02b808660ccc2af2bd9a51eaba7b36f8098ef433f2d7e293.png) Source: https://trove.treasure.lol/collection/smol-brains Patience may seem counter to your emotions, but that’s the whole thesis behind the success of the “Fear and Greed” index. Using objective tools can help traders win over time. That’s where Origins focuses its resources - building market-beating tools to enable a trader to win in the market using objective, reliable data. The rest is up to the individual to use those tools. Trading on an instinct will often have an adverse effect, unless using it as an indicator that’s paired with other tools to reach an informed investment decision. ![Source: https://twitter.com/crypto__kermit](https://storage.googleapis.com/papyrus_images/a4e820342babc8f2b80d2e2265de5a3d6cf07885751636c26d09d6e4d3f180bd.png) Source: https://twitter.com/crypto\_\_kermit ### 2) Your Daily Routine How do you structure your daily routine? Get it down on paper and see if there are any habits you can change. I was shocked about the compounding effects of lost time over a year. A really unproductive day can have a significant adverse impact on my output. I’ve pulled together a “shocker” to illustrate the extrapolated lost time over a year: ![For information purposes only.](https://storage.googleapis.com/papyrus_images/e3fd604ec3e1ee9b667be4185e82e588604b991a714c3b3b4caa675cbc13e50b.png) For information purposes only. Those 7 hours of “lost time” could be a pessimist’s perspective, and granted it’s important to have time off to chill, but why not do something productive? Those 7 hours equate to 2,950 hours in a year. Four years of putting that time to good use and you could arguably become an expert in a specific field. A life-changing action for a small consistent habit change. ### 3) Revised/Optimized Routine Here’s a reasonable, revised schedule I strive for. It still has some leeway but provides a sustainable, reasonable basis for a daily framework to maintain. ![For information purposes only.](https://storage.googleapis.com/papyrus_images/68932889192f84d8790647e81d44de85a2ba3464183b2a672672e4d0a51b95b3.png) For information purposes only. Flexible working can be a challenge. Clocking off early can feel like you’re not optimizing every moment available, but if I’ve stuck to my routine in the day, I could change some of the other evenings to flex around social plans to maximize efficiency and productivity. Good sleep is imperative for my own routine. I see a dramatic adverse impact on productivity the next day if it’s disrupted, so tend to be in bed by 10:30 pm. **ACTION:** Create a similar spreadsheet to the above and challenge each task in the day. You’re a Product of Your Environment ------------------------------------ You’re a product of your environment. [Kurt Lewin](https://archive.org/details/principlesoftopo011804mbp) states that someone’s behavior is a function of their environment. Simplified into the following equation: **Behavior = Function(People,Environment)** There was a study (Anne Thorndike) around the consumption of water and a hospital canteen. It was observed that by changing the layout to make water more accessible, the sales of water increased by 25.8% and soda sales dropped by 11%. ![Source: American Journal of Public Health, April 2012.](https://storage.googleapis.com/papyrus_images/73eed6a6a7bcc6d2897d5f4c6fc51eb86e45156b4aad0069d2b8dc6963196c0d.png) Source: American Journal of Public Health, April 2012. In fact, this was fresh in my mind, yet I still subconsciously fell victim to the marketing tactic and caved to purchasing premium water at the Barbican Centre, London. The branded bottles were on the counter, but the basic water was on the other side of the kitchen (strategically). Without thinking I went with the premium water. I was frustrated with myself after! The human brain [processes images](http://misrc.umn.edu/workingpapers/fullpapers/1986/8611.pdf) 60,000 times faster than text, and [90% of information transmitted to the brain is visual](https://www.t-sciences.com/news/humans-process-visual-data-better). It’s no wonder we get distracted easily and our attention is consistently pulled away from what we need to focus on. If you work in an office and everyone where’s suits, you’ll likely buy one too. If your fellow degen is sitting at home in their parent’s basement, wearing his MAYC hoodie, then you’ll likely adopt the same approach. ![https://cryptoart.io/artist/sartoshi](https://storage.googleapis.com/papyrus_images/c14f80fecb674ca75cf8f0aac0a86e869291b3314d15d23feee4a44582f2b4dc.png) https://cryptoart.io/artist/sartoshi No judgement on the living arrangements! But as long as you’ve challenged whether it’s a productive environment for you to work in. It wasn’t until the Pandemic I realized how badly working in my bedroom impacted my productivity. I resided in a small two-bedroom apartment with a housemate, so my desk was next to my bed. I used to roll out, put a shirt on and wear tracksuit bottoms as nobody on the Zoom calls could see. The fire alarm that went off during a client Board meeting certainly improved my lateral thinking, as I made my apologies but ensured the camera was off before I stood up. It’s no wonder the sales of tracksuit bottoms/sweatpants [rose during the Pandemic](https://www.theguardian.com/fashion/2020/apr/25/no-sweat-how-tracksuit-bottoms-became-the-height-of-lockdown-fashion). Dressing habits changed. ### Make Change Regardless, I soon realized I thrived on my prior routine, so made conscious changes to my environment to reinstate my prior productivity levels. You’ll be surprised by the additional level of energy you have from simply making your bed and getting changed every day. Sweeping a hyped collection in the dark from my bed, while scoffing my face with dinner just didn’t cut it for me. Although it was a novel luxury for a short period after having made the long return commute to work for 10 years. Have a look at your environment and see if you can make any changes. Use each area of your room or space for a specific purpose and it will help get you in the headspace to maximize your productivity. Identify how you work - I’m unusual in the sense I need background noise to help me focus. So I frequently work in shared spaces or coffee shops. Others will likely find this distracting. ### Personal Circumstances Every trader’s circumstances are different, but writing down your routine and flexing what is possible for your own situation can only be a positive thing. Getting kids ready for school and getting to work may be the non-negotiable aspects of your day. But identifying what is and isn’t, will enable you to maximize the time you have available in the evening or weekends to spend trading your favourite ERC-721s. It will also help you prioritize what’s important, and allocate time accordingly. Closing Remarks --------------- Habits are powerful. They can dictate a person’s daily routine and ultimately life. Making adjustments to these habits, breaking bad habits and forming good ones will create dramatic positive outcomes when sustained over a period of time. We have given you a framework in this article to document your daily routines and amend the adverse activity to curate a positive environment for your brain to preserve energy on the important ones that require a conscious focus. Leaving the remainder on autopilot to allow a more fulfilling experience. NFT trading can be a matter of science. We have access to the entirety of the blockchain and can objectively analyze trading patterns and behaviors to predict future trends. As we learn how to harness that data we will be able to make more informed decisions, relying less on impulsive bad habits of [FOMO](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8283615/#:~:text=Abstract,to%20maintain%20these%20social%20connections.), or giving into those cravings. At [Origins](https://originsnft.io/) we leverage data-driven decision-making, educational resources, and proprietary analytics to remain ahead of the curve with respect to blockchain tech and specifically NFTs. To find out more, please visit our [website](https://originsnft.io/) or [Twitter](https://twitter.com/OriginsNFT?s=20&t=32UYETa5iiqxkDBj0NcVrg). To purchase a pass, please visit our [Opensea page](https://opensea.io/assets/ethereum/0x495f947276749ce646f68ac8c248420045cb7b5e/63763212585141476199723449601564140078511354041472126739157516503384422613942). ![](https://storage.googleapis.com/papyrus_images/87792cb1e42422ac0c7df2035387f02b0bea6fc7aa79ac1580223a3713806395.png) --- *Originally published on [Origins Research](https://paragraph.com/@origins-research/nft-trading-habits)*