Top 7 NFT Trading Strategy [2022]

Due to their high value, NFT collections are now regarded as lucrative investments. Before investing in them, it is essential to develop a trading plan that will enable you to generate enormous earnings.

With an understanding of the fundamentals, it is time to consider NFT trading methods. Whether you are seeking a short-term flip or a long-term investment in NFTs, you must plan your NFT purchases properly.

Whether you are a new investor or a seasoned trader, this guide will help you improve your trading skills by providing you with the most effective NFT trading strategy.

Any commodity or asset traded should always provide a profit. However, if the trader does not employ the proper trading tactics, the potential gains may be reduced.

An efficient NFT trading strategy should assist you in evaluating past and current deals, keep you focused on the market, and eventually direct you to the greatest NFT investments.

But before we go straight into the NFT trading strategy, let’s go back in time and elaborate on a few things.

What are NFTs?

Non-fungible tokens are digital assets on a blockchain that are distinguished from one another by unique identifying numbers. The unique characteristics of NFTs prevent their replacement or exchange.

The tokens can represent real-world assets like real estate, digital art, etc. Several artists have recently accepted the NFT movement in order to monetize their prior works, while collectors purchase tokens as a store of value.

Why You Need an NFT Trading Plan

NFT collectibles have recently been shown to be valuable and are now considered a profitable investment. However, prior to investing in them, it is prudent to build a trading technique that will enable you to generate enormous profits.

Whether one likes it or not, the main aim of trading any asset or commodity is to generate profits for the trader, and failure to adopt the proper trading methods could reduce profits.

An NFT trading strategy would:

• Provide a substantial return on investment (ROI).
• Guide your approach to trading.
• Assist you in maintaining your focus regardless of market conditions.
• Create a guide to assist you in evaluating your past performance.

Now, I think it’s high time we look into the NFT trading strategy, I bet that is the only actual reason why you are here.

1. Buy The Floor Price

Due to their high value, NFT collections are now regarded as lucrative investments. Before investing in them, it is essential to develop a trading plan that will enable you to generate enormous earnings.

With an understanding of the fundamentals, it is time to consider NFT trading methods. Whether you are seeking a short-term flip or a long-term investment in NFTs, you must plan your NFT purchases properly.

Whether you are a new investor or a seasoned trader, this guide will help you improve your trading skills by providing you with the most effective NFT trading tactics.

Any commodity or asset traded should always provide a profit. However, if the trader does not employ the proper trading tactics, the potential gains may be reduced.

An efficient NFT trading strategy should assist you in evaluating past and current deals, keep you focused on the market, and eventually direct you to the greatest NFT investments.

2. Follow Google Trends

Regardless of your level of experience in the NFT market, you may easily determine if a specific NFT market is still popular by examining the current Google trend. This will resemble marketing research more. 

However, this is because that is precisely what it is. And who else is more qualified to inquire into what people are interested in if not the ubiquitous search engine?

Google Trends is a superb, free tool that provides invaluable insights into the public’s perception of a particular topic or term. Term searches are graded on a scale from 0 to 100. A high rating implies that individuals are enthusiastic about NFT collectables. It also indicates that it is a good time to purchase.

You will need to exercise caution if the volume of searches for NFT-related keywords decreases. This indicates that few individuals are interested in the market.

However, you must be aware that trends can acquire or lose popularity rapidly, which is also true for NFT ventures. Traders are drawn to overhyped enterprises, but they can quite quickly if trade volume decreases.

Try to observe and correlate market movements with the project’s trade volume for improved results. It is also essential to track the number of traders, as a project with a large number of traders is more likely to be successful than one with a small number of merchants.

3. Purchase NFTs With Few Sellers

Any NFT investment that yields a profit requires the successful sale of the NFT at a higher price than the purchase price. Obviously, it will be more difficult to sell a non-fungible token (NFT) without a huge community of eager buyers.

Your NFT trading techniques should always be contingent on the number of sellers for a given NFT collection. If you choose to sell, you must have sufficient trading volume to do so. With more sellers, it becomes increasingly difficult to maintain competitive prices. This is because there are more individuals willing to reduce their prices than you.

When evaluating sellers for an NFT, consider their behaviour. If the prices are different from one another, it indicates that the sellers are patiently waiting for the perfect bidder. They will likely not respond to a price reduction.

However, if there are a number of prices that are close together, it indicates that the sellers are impatient and willing to lower their prices. Selling NFTs is a competition for the money of buyers. You will have greater success selling NFTs to sellers who are patient.

The market trends and sellers’ behaviour will considerably influence their behaviour. This NFT trading method trend is subject to variation over time. This method is most effective when comparing sets of comparable NFTs.

4. Value Strategy

The NFT value approach emphasizes the acquisition of high-value NFTs. It is important to note that if you are a beginner with a limited budget, this may not be the optimal trading technique for you.

You must utilize internet NFT tools such as rarity.tool to discover lucrative NFTs. It is one of the most popular tools for comparing the rarity of various NFT projects.

For example, CryptoPunks is one of the NFT collections that sell for a premium price since it is regarded as an NFT collection with distinctive characteristics.

Rare NFT collectibles have a higher probability of appreciating over time since their demand will always exceed their supply.

5. Purchase the Ceiling

If you are willing to invest large sums of money in the NFT market, consider purchasing the ceiling as your NFT trading strategy.

If you have the capital to invest in non-financial assets (NFTs), the ceiling is an excellent alternative, as these assets are uncommon and highly sought after. This indicates that ceiling NFTs may increase in price if the project’s demand increases. 

These things are very popular on the market, where individuals can sort by price from highest to lowest. They may be promoted in various locations as the best NFTs of the project.

The disadvantage of this particular NFT trading approach is that fewer people can afford to purchase the NFT. 

This makes it difficult to locate a willing seller at a reasonable price. If the project loses popularity, ceiling traders may incur significant losses. This is a high-risk, high-reward wager for those with a substantial bankroll.

6. Underpriced NFTs

Any novice NFT investor’s desire is to find an undervalued NFT on a marketplace. This method does not rely on a rising market trend and can be employed even when demand for a particular NFT collection is low.

To make a profit with this NFT trading approach, you must discover NFTs that are selling for less than they were purchased for.

For instance, five copies of the identical NFT may be listed for $300. In addition, the remainder of the collection is priced at more than $600. Although this appears to be a wonderful value, you may want to consider the less expensive NFTs in this series. 

Do not rule out the possibility that each of these NFTs was purchased for only $50. This makes their current asking price $300 higher than it should be. The lesson is not to judge the worth of an ETF by its current listing price.

Market pricing is crucial to consider, but it is not the only factor you should evaluate. If the overall market for a project has improved, it is safe to assume that the NFT value has also increased.

7. Market for an NFT project

This is most likely the most crucial part of NFT investing and a crucial foundation of your NFT trading methods. Always consider whether there is a market for the NFT project you wish to invest in.

If the community is small and there are no plans for a marketing effort, you should not put all of your eggs in that basket. Avoidance would probably be the safest course of action.

Every day, the NFT marketplaces are saturated with new projects. However, successful NFT investors are those who are able to sort through all of these ventures and identify those with a purpose. 

Try to identify NFT projects that have utility and, most crucially, a network of supporters. Find communities that are large enough to have potential purchasers for your NFTs.

Ultimately, you may wish to promote those NFTs in order to give them a boost and increase their resale value. Participate in the community. Find the problematic areas of the project and offer your assistance to make things easier for the new prospective purchasers and art collectors.

What NFT Trading Strategy do you employ?

There is no golden NFT trading technique that guarantees large returns, therefore, each investor must study and select a trading strategy that is appropriate for the available capital.

At the same time, it is essential to have reasonable expectations and not be disappointed if an NFT project does not sell for the anticipated price. These projects are highly dependent on market developments and advertising campaigns. Regardless of the NFT trading tactics adopted, market conditions must constantly be considered.

NFT Trading Strategy Tips For NFT Traders

Have a Reason for Every Trade: You must comprehend why you are purchasing the NFT in order to remain committed regardless of market movement.

Invest Only What You Can Afford to Lose:

Do not let your desire for enormous profits convince you to invest more than you can afford to lose. NFTs are extremely dangerous, and nobody is guaranteed anything. In a few hours, the value of an asset may fall by more than 50 percent for a variety of causes, including regulatory sanctions on the cryptocurrency market.

Exchange Tokens With Positive Prospects:

In anything that you do, exert effort by completing thorough research to establish which NFT has growth potential. You can combine the strategies outlined in this article, such as utilizing Rarity.tool to compare rare projects to others with comparable characteristics.

Get in Early:

If you wait until a project is available on every social media platform before deciding to purchase it, you may pay a relatively high price. Be the early bird that gets the worm by performing due diligence on available NFTs and purchasing tokens while too few people are aware of them.

Diversify Your Investments:

Do not invest your entire wealth in a single NFT venture. Spread your cash across at least two to three NFTs so that if the value of a token drops, you will not be completely stranded because other collectibles will compensate.

FAQs on NFT Trading Strategy

Can you profit from NFTs?

Many NFT investors have profited from the resale of NFTs. Nonetheless, they all possess a sound NFT trading technique and behave accordingly.

Are NFTs an excellent investment?

In the coming years, the NFT market is anticipated to expand even further, which will result in an influx of new investors. Profitable investments rely on identifying the ideal NFT project.

What are the best platforms for NFTs?

OpenSea, Rarible, and Mintable are the top platforms for purchasing and selling NFTs. However, depending on the type of asset you want, there are NFT platforms that are specialized for that specific asset. Such marketplaces already exist for digital artworks and digital game elements.

How can I utilize an NFT?

NFTs can have multiple uses, particularly if they are unique to a particular platform or metaverse. Gaming NFTs, which may be utilized in blockchain games, are among the most popular and desirable assets.

Conclusion on NFT Trading Strategy

This article discussed eight NFT trading tactics that will assist you in achieving success. Regardless of how simple the things in this post may appear, do not become overconfident, since NFT is comparable to other crypto sectors, which pose considerable hazards.

It would behove you to undertake thorough research on the enumerated tactics in order to locate the one that works for you. You may also elect to mix multiple trading strategies to boost your odds of market success.