NFT Trading Strategies to Avoid Risks
Digital assets are becoming more and more popular, and every investor strives to find the most effective strategies to maximize their investments. The right approach to trading, in turn, can significantly increase your chances of success. Let's take a closer look at the key strategies.
Risk management
Setting clear rules for yourself, for example, selling an NFT if its value drops by 20% of the purchase price, or profit-taking when 100% growth is achieved, helps to avoid impulsive decisions and minimize losses or lost profits.
Following trends
One of these is the growing interest in metaverses, virtual spaces. The investor notices the project on various platforms, including social networks, news sites. Google Trends analysis shows an increase in search queries related to the platform. Based on the collected data, you decide to purchase an asset at an early stage, when prices are still relatively low (for example, NFTs related to the platform, such as items and avatars). Which can be used in the metaverse or sold at a higher price in the future.
Purchase of a Limited Number of NFT
You find that NFTs from any particular collection are sold by only a few sellers. Realizing that a limited number of sellers can contribute to an increase in prices, you purchase one of the NFTs. Assumptions are justified when the demand for this collection grows, and with it the value of the acquired asset.
Undervalued NFTs
Exploring the market, you find an NFT that is selling below its usual market value due to the recent decline in interest. By buying this asset, you are counting on its future growth. The calculations turn out to be correct when, after a few months, the project is gaining popularity again, and a sale with a profit follows.
Buying NFT at the Maximum Price
You have significant capital, and decide to invest in one of the most expensive NFTs in the collection, buying it at a "ceiling" price. This risk pays off when the chosen project launches an exclusive event for the owners, which leads to an increase in demand and an increase in the value of the asset.
Buying at Minimum Prices
For example, you want to invest in a collection at an early stage, when the price for the "floor" (the minimum price among all NFTs in the collection) is equal to the initial cost. A few months later, due to the growing popularity of the project, the price of the "floor" increases, which allows you to sell NFT more expensive.
Trading strategies in 2024 are diverse and can adapt to different styles and preferences. From buying at minimum prices to investing in the most expensive and sought-after assets, success, in any case, lies in a deep understanding of the market, analyzing trends. In the world of NFT, where opportunities are emerging every day, flexibility and awareness play an important role.