To truly dive into the world of crypto, it’s crucial to learn about various coins, their advantages and disadvantages, and related news. But, do you know what else is also important? Learning the crypto slang. Yes, these crypto slangs play a significant role in improving your crypto knowledge. You must have heard – FOMO, HODL, Whale, FUD, etc. And among them, one such term is “Ape.”
In this article, let’s learn about apeing and how you can profit from it.
In simple terms, aping can be defined as purchasing a new coin. If you follow crypto Twitter, you may have encountered a conversation where someone asks, “What coin are you apeing into?” which means, “What coin are you buying?”
In recent times, the crypto world has been “apeing into” the actual apes; yes, we are talking about the Bored Apes from the Bored Ape Yacht Club (BAYC).
What is Apeing?
Apeing happens when a crypto investor purchases a token shortly after the token project’s launch without doing extensive research, typically out of fear of losing out on potential gains that might be missed if they wait to conduct due diligence.
The word “apeing” gained popularity in the 2020 “DeFi Summer,” when sudden and unannounced token project releases resulted in a tiny percentage of investors generating significant profit from purchasing those project tokens within a short time following the original launch.
As such stories started to gain traction on social media, other investors tried to imitate them by purchasing tokens for every new project released without extensive research. This “low IQ” strategy of choosing tokens to invest in gave apeing its nickname.
How does FOMO come into the picture?
On an individual level, FOMO arises from the belief that other traders are making huge profits while you are not, and therefore you too want what they are having.
As a result, it leads to a lack of long-term perspective, a reluctance to wait, under- or over-confidence, and unrealistic expectations. FOMO is a form of emotional trading that lacks objectivity and, if left unattended, can force investors to abandon their investing strategy and take on too much risk.
To overcome FOMO in trading, you must first combat negative emotions like greed and anxiety. These emotions can keep you trapped in the FOMO cycle, in which you buy high for greed, envy, jealousy, and excitement and sell low for fear, anxiety, and impatience, only to be enticed to buy again when the market rises and hits another top.
The connection between Apeing and FOMO
Apeing is considered the primary characteristic of FOMO-dominated traders.
FOMO is a familiar opponent for all investors and traders since it affects their decision-making on multiple levels. For example, it can force them to enter trades too quickly without confirmation and chase after opportunities that have passed.
By having solid control of trading psychology, traders and investors can manage FOMO and prevent it from impacting their decisions. However, not every trader or investor has mastered investor psychology. Many of them still act FOMO-driven and exhibit the following characteristics:
A FOMO-driven trader wants everything now. Suppose this is how you feel while trading; FOMO is most likely an issue for you. However, you’re probably more concerned about how much money you can make on a trade instead of focusing on executing your former trades correctly.
A trader suffering from FOMO frequently prefers to do things just because others are doing them rather than because they know why those investors are buying or selling a specific asset. Following the herd in trading can lead to imprudent investing and terrible consequences.
Traders that are impacted by FOMO are frequently impatient. They don’t want to wait for the perfect signal; they want to get in because they’re worried the price will shift and leave them behind, robbing them of a great chance.
Some traders have unreasonable expectations. They trade impulsively to double their balances in a few months.
After multiple failed trades, some traders’ primary goal is to repay those losses in a short period and with a few winning deals. As a result, they start trading at random to earn a quick profit and recoup their losses. Unfortunately, this results in more losses.
FOMO-prone traders typically don’t approach trading with a long-term mindset. If that were the case, they would be aware that thousands of new trades await them and would be unconcerned about that single trade.
As a crypto trader/ investor, you should always keep your eyes and mind open before trading. Being high on emotions will lead you to new losses. So always DYOR and play it safe!
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn’t represent any investment advice or WazirX’s official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.