So… we are back! 😎
This is The Trader Room 2. If you missed the first edition of The Trader Room, go here to read it.
I believe that bear markets are the best times to learn, connect and build amazing ideas. I contacted 5 NFT traders and asked them a little about their trading tips/risk management/trading strategies.
Here’s what they answered: (in random order).
1) Sneakyninjapants (@SneakyninjaNFTs) on Twitter
Sneaky is the founder of Momentum NFT and his wallet is ranked in the top wallets with the highest ROI in NFT trading. He has done more than 20.000 NFT sales in all of his trading journeys.
Sneaky likes taking profits.
if you don’t know whether to sell for profit pre-reveal or wait, sell
if you don’t know whether to sell for profit or wait for a pump, sell
if you don’t know whether to sell for profit or hod long-term, sell.
He shared two tweets that he wanted to include:
“Make decisions based on live market conditions.”
2) Tre (@trebooomin on Twitter)
Tre is the co-founder and lead of Underground (ETH) (@underground on Twitter). I asked Tre a few questions and this is how he answered:
“Until then, my general recommendation until we regain more confidence in the market is to stick to the following:
⦁ Primary + whitelists only and plan an early exit (< 1–2 days)
⦁ Avoid secondary for new projects – you can always buy in later!
To be clear, this is not the most “optimal” strategy, this is simply the safest way to get through the bear while still remaining profitable. If there is a new project you really like, you should trust yourself and treat it as an edge case.
Understand that there will be projects you sell too early on and secondary plays you could have made, but that is to be expected with this strategy. It’s more about prioritizing protecting your bag over fighting to capture every thin opportunity.
For those with more liquidity and/or higher risk tolerance, this is a great time to figure out your top x established projects to place bets on. Look for well-funded projects, active teams or communities, and clear upcoming catalysts that can drive future interest. This along with art will be the first project to run when the market regains confidence.
This is NOT suggesting to find a project you like and immediately buy or sweep. This means:
1️⃣. Research projects to add to a monitor list
2️⃣. Look for clear historical demand zones (use NFTNerds, Parsec, or Opensea’s Analytics section)
3️⃣. Wait for capitulation events and be diligent with offers
4️⃣. Not fomoing in secondary just because everyone else is – we’ve seen several fomo pumps die out with big retraces… be patient.”
3) Huey (@traderhuey on Twitter)
Huey is an active NFT member that has traded his way into many collections. This is how he replied:
“Before I enter a trade, I have 3 questions I ask myself:
1) Is the mint price low enough for people to accumulate?
2) Is the art polarizing?
3) Is the team communicative?
1) Having a low mint price is likely the most important factor for success, relative to price action, in an NFT project. Allowing people to have a cheap entry, and time to accumulate has been a factor that has been present in almost every single project that has mooned. I think this is especially important because it allows people to feel like they are invested into this project.
Someone who has 100 NFTs of a project will be louder than someone who only has 1.
For example, LILY (SOL project) minted around 4 SOL, and kept that floor for a few days before it ran up to 14 SOL. In combination with its top tier art, it allowed people to accumulate at a cheap price. Majority of the minters were extremely happy because 1) they were all in profit if they minted, and 2) they had time to buy NFTs that they loved — “Forever PFPs.”
This is why I generally stay away from projects that have 7–8+ SOL mint price — there is not an opportunity for most traders to buy multiples.
I always ask myself — “What would it take for this NFT to double?” “What would it take for this NFT to go from 15 SOL floor to 30 SOL floor?” I think these are worthwhile questions to ask yourself before you enter a trade as well. Though Solana USD price is much cheaper than it used to be, we are still using Solana tokens to trade — and I think that psychological barriers still apply, especially while measuring the value of NFTs using Solana tokens.
2) I’ve always believed that polarizing art is usually one of the key factors for an NFT PFP project to be profitable from a trading perspective. If the art is able to elicit a strong emotional reaction, to me, this is very bullish. If people didn’t care, they would not voice their opinions.
One of my biggest successes in the NFT space was accumulating Cets on Creck between 2–3 SOL. When I first saw their art, I was immediately hooked because the art conveyed the entire feel of the project, and what they wanted their community to be. The art has character and made me fall in love with it right away. Others thought the art was the ugliest thing they’ve seen on web2 AND web3 combined LOL.
However, seeing people have strong feelings towards the art made me realize this was something that would allow people to band together around — a community that could rally around the art. I think we’ve seen examples of this time and time again within the Solana NFT space, and I strongly believe this is a key to initial success. When I talk about success, please remember that I am strictly talking about it from the perspective of price action.
3) Communication is one of the green/red flags that I look for in a project. I think it’s important for a team to understand how the NFT space works. Though we should strive to hold projects to a higher standard in terms of professionalism; when projects mint, this is essentially a funding round for a company.
However, there is a reason why we are in web3 and not web2. Web3 community has grown largely in part due to grassroots involvement from community members, and I think the benefit of web3 is that we have access to founders and builders. It is extremely important to me that I am investing in a team that cares to engage with the community.
Often we forget how small this space is, and we often forget how important it is to make community members feel like they matter — no matter how big or small their influence is. This goes a very long way in building loyalty to the project and the community.”
4) Boogies (boogiescousin_ on Twitter)
Boogies is an active ETH and SOL NFT trader, and his answers go more into risk management.
“My biggest tip/risk management strategy is that if you believe we are in a bear market then you also believe we will eventually be in a bull market. DCA’ing your crypto investments by setting weekly auto-buys from your exchange of choice removes any emotion from investing.
If you set an auto-buy at $100 of BTC/ETH/SOL every week, you’ll buy more when the price is low and less when the price is high. Bear markets are a great time to invest in volatile assets like crypto using a DCA approach. Stop waiting for some magic number to buy more. If you think it will ever be higher than it is today, invest now.
Historically, buying crypto on Sundays and Mondays offers the lowest DCA approach so setting your auto-buys for Sunday night or Monday morning is likely to offer the best approach.
Remove emotion, remove doubt, remove fear.
The other is understanding variance and expected value. Closely following collections and charts, while boring to many, allows you to make better trades and investments without relying on the echo chamber of CT.
You can use the echo chamber to time your moves ahead of time rather than reacting to the echo chamber afterwards.”
5) Seb (sebsebseb_eth on Twitter)
Seb is also part of Underground’s staff (@underground on Twitter). Seb’s answers go into what the market is feeling like right now:
“I think a good tip i’ve got at the moment is trade for the market you are in. During the bear market we are having periods where it all feels so bad with such little volume. During these periods just reduce your bet size. Then when we get a day or weekend where it feels like the market is warming up a little you can risk a little bit more.
More importantly I think during this bear market, until we get confirmation of increased volume for a sustained period reduce your holding time.
Even if you miss out on the last 20% of a projects’ run, take profits aggressively!”
Now… what can you learn from this?
1. Knowing when to exit (if the potential downside is bigger) like Sneaky mentions
2. Using tools for historical demand zones of collections + doing research and NOT FOMOing in secondary can be helpful as Tre mentions.
3. Risk management is essential, that’s why Boogies says that DCA auto-buys has worked for him since he believes they can reduce your emotions when investing. Waiting for a magic number can not go as expected.
4. Take profits and reduce your risks (never invest what you can’t afford to lose) as Seb said
5. Having in mind some key factors before you enter a collection can help, as Huey mentioned
These are just a few things the traders wanted to share. Thank you all for sharing some of your best tips!
Disclaimer: This is NOT financial advice. This article is only for entertainment and educational purposes, keep in mind the traders shared their PERSONAL opinions based on their trading experience, DYOR and create your OWN strategies.
The Trader Room is a series where I’ll keep interviewing traders on tips/trading/risk management strategies. This is part 2! Let’s see who appears in part 3 (;
Want to learn from a trader? Who exactly? What specific questions? Nominate them under my thread/DM me so I can feature them next time!
Are you a trader who wants to be featured in my articles and following threads (for free)? Let me know in the thread replies or DM me!
Thanks for reading! I hope you enjoyed this read, below is the thread on this topic:
