Mar 01, 2024

Top 5 NFT Trading Strategies 

Non-fungible tokens, or NFTs, confer ownership of unique digital assets, such as video and music files, GIFs, collectibles like digital trading cards, digital drawings, and in-game items. When you buy an NFT, ownership is assigned to you via smart contract, and since the data is stored on a public blockchain, you can confirm its authenticity, instantly. 

Non-fungible tokens often have utility beyond digital art, in the realms of music  gaming, asset tokenization, digital identity and more. It is this diversification that has allowed NFT’s to continue to thrive and provide a popular asset for trading.

In this post we’ll examine some of the best strategies for exploiting the rich opportunities presented by the NFT market.

Implement a Dollar Cost Averaging (DCA) Strategy

One of the best strategies you can use for trading non-fungible tokens is Dollar Cost Averaging (DCA). This is a trading strategy that is designed to minimize the impact of market volatility as you are purchasing more of your chosen digital asset when the price is low, and less when it is high. A DCA strategy involves investing a fixed sum at regular intervals, no matter whether the price of your chosen NFT is rising or falling. You often end up paying a lower average purchase price, though it can take longer to earn a return.

DCA strategy

The main advantage of this strategy is that you are not obliged to have precision timing and pipoint predictive accuracy. Over time, you are gradually  accumulating floor pieces from a potentially profitable NFT collection over an extended period of a few weeks or months, and not making one big buy. This makes you less vulnerable to short-term volatility.  The idea is to sell your NFTs once the collection has gained momentum.

Buck the Trend

It can be really tempting to follow the crowd. Obviously they know something you don’t right? When it comes to non-fungible tokens there can be a danger of buying into the hype around an NFT drop, where FOMO has taken over, over-inflating prices. This may mean you are simply seeing a momentary price spike. So, when trading NFTs, the best thing you can do sometimes is go against the herd for a better profit over the long-term.

Find Flipping Opportunities

Flipping isn’t just for houses. It’s also a great strategy for trading NFTs. However, generating a profit buying an NFT at a low price, then selling at a higher price requires a great deal of skill. You need to be able to identify non-fungible tokens that show promise before the project gains  traction and the price shoots up.

NFT flipping opportunities

Social channels like Twitter, Discord, Reddit and Telegram are great tools to help you find the right key players and thought leaders to follow so you can get in on the ground floor for projects that are going to see accelerated demand and have strong flipping potential. 

Diversify Your NFT Holdings

Diversification is critical to opening the door to a wider range of trade opportunities, mitigating your exposure and spreading risk across multiple assets. In the volatile NFT market this is particularly important. 

You want to expand your portfolio with a variety asset classes in addition to  non-fungible tokens, from various blockchains, emerging and established projects, metaverses and blue chip collections.

Use an AI

Trading non-fungible tokens can be incredibly complex and comparatively high risk, particularly for less experienced traders. It involves trading on an exceptionally volatile market and demands a huge commitment of time and energy. It is critical to research the project, to see if it has longevity.  You need to get to grips with the tokenomics, examine the roadmap, check levels of community engagement and see whether the NFT you are trading is a marketable piece of digital art and if it also provides additional utility. In addition, you have to become familiar with  sites that track NFT projects, sales volumes, floor prices and more. You need to become skilled at using  technical analysis tools that enable you to identify trading patterns and assess the price trajectory and momentum of your chosen non-fungible tokens. You also need to create a trading strategy and implement a risk management plan and then stick to it, remaining disciplined without being ruled by emotion. If you think this sounds like a massive undertaking, you’d be right. 

The solution is simple though – use an artificial intelligence-based trading system.Here at AlgosOne we offer the most sophisticated machine-learning algorithm on the market, completely free. Our institutional-grade tech is incredibly innovative using large language models and proprietary deep neural networks to create an AI that learns and improves with every new trade, user and dataset.

AI in trading 2024

It’s all done for you from the tokenomics to technical analysis, no experience is needed. There is no coding, strategy selection, trade planning or risk management required. You just sign up, make a deposit of as little as $300 and the AI takes it from there.

Fully licensed, AlgosOne  is strictly regulated, with company and user account segregation, Know Your Client procedures, and tough technical security protocols. There is also a reserve fund that provides user capital protection and the current balance of the fund can be seen at all times in the dashboard. 

Not only do we have an unmatched and ever-improving trade success rate, but users also benefit from an exceptionally competitive fee structure. There are no subscription, deposit or transaction fees, just a commission fee, which is only charged on winning trades. The commission fees are used to pay for 24/7 live support, technical  and risk management teams, to cover compensation paid out  on losing trades and to maintain the balance in the reserve fund.

Using an AI like AlgosOne means you can effortlessly earn a potential profit  from NFT’s with no strategizing required.
Want to learn more about various digital and traditional assets types, artificial intelligence, market analysis tools, trading strategies, the blockchain and more? Browse the AlgosOne blog.

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