Every successful investor, NFT or other, must have a plan. The most critical aspect of NFT trading is knowing when to buy and sell. They can employ several strategies in NFT trading, but the most prevalent and straightforward is the buy low, sell high strategy.
Using this strategy, you buy NFTs when the price is low and sell them when it is high, which is precisely what it sounds good about. Although this strategy is straightforward, it must be challenging to implement. To properly purchase cheap and sell high, you must comprehensively know the NFT market and the NFTs you are trading.
What is NFT?
A non-fungible token is a digital asset that symbolizes physical goods such as artwork, music, in-game items, and videos. They are often purchased and traded online with cryptocurrency and are generally encoded with the same underlying software as most cryptocurrencies.
NFTs have been since 2014, but they are growing in popularity as a means of buying and selling digital artwork. Since November 2017, $174 million has been spent on NFTs. In addition, NFTs are often one-of-a-kind, or at the very least part of a limited run, with unique identification codes.
Factors for Evaluating NFT Collectibles
- Purpose of the NFT
- The rarity of the NFT
- Utility of the NFT
- Tokenomics of the NFT
- Artist or Creator of the NFT
Top 5 NFT trading Strategies For Investors 2023
Buy the Floor
As their industry continues to expand in popularity, there is a reasonable probability that NFTs will exist for many years. Therefore, new investors should consider purchasing NFTs at the floor price.
The NFT market floor price represents the lowest price for a non-fungible token. Sorting the NFT products in a particular collection by price will reveal the floor price, corresponding to the lowest NFT advertised for sale. However, not all low-cost NFTs guarantee a profit. Because of this, you should always select an NFT project based on your interests. To ensure you receive the most excellent price for an NFT collectable, it is best to monitor the project before its launch. If the token acquires popularity, it is always a prudent NFT trading strategy to get it at the floor price.
Search for Google Trends
Regardless of your experience level in the NFT market, you can quickly determine whether a given NFT market is still famous by examining the most current Google trend. It will more closely resemble marketing research. The explanation, though, is straightforward: that is what it is. And what better place to ask this than the search engine everyone uses to navigate the Internet? Google Trends is an excellent free site that provides good insights into the general public’s impression of a topic or term. Word search ratings range from 0 to 100. A high rating shows that people find NFT collectables appealing. It also implies that now is a perfect moment to purchase covertly.
Track and compare market trends with the project’s trading volume for better outcomes. A project with many traders is more likely to be healthy than one with a small number of traders, so keeping track of this number is crucial.
Read More: A Beginner’s Guide to Investing in NFT
Purchase NFTs collectables from a few sellers
Any NFT investment that makes you money needs to be able to be sold for more than you paid for it. Naturally, selling an NFT without a sizable community eager to support the initiative will be more difficult.
Trading tactics should always be influenced by the number of sellers for a specific NFT collection. If you choose to sell, you must have a sufficient trading volume to close a deal. Keeping pricing competitive becomes increasingly difficult as the number of sellers climbs. so that more people will drop their pricing than you.
Look for underpriced NFTs.
Finding undervalued NFTs in a market is the objective of all rookie NFT investors. This method is effective regardless of the lack of interest in a particular NFT collection, as it is independent of market trends. Profitable implementation of this NFT trading approach requires locating NFTs selling for less than purchased. Although Nft should consider market pricing, there should be other factors you consider. If the market for a project has improved, you can expect that the NFT value has also risen.
Buy the ceiling
If you have the capital to invest in NFTs that are valuable and in high demand, the ceiling, also known as the top, is an excellent choice. This suggests that if demand for the project increases, ceiling NFTs may become more expensive. These items are also popular on the market, where customers can sort items by price from highest to lowest. They could be promoted as the best example of the project’s NFTs in different locations.
The disadvantage of this particular NFT Trading Strategies is that fewer individuals have the funds to purchase NFT. As a result, it is challenging to find a willing seller at a reasonable price. If the project loses support, traders in ceilings may experience substantial losses. This is a high-risk, high-reward wager for those with substantial bankrolls.