The top 7 NFT trading mistakes beginners make and how to avoid them.

The top 7 NFT trading mistakes beginners make and how to avoid them

Overpaying due to FOMO

1. Many newcomers rush into purchases when they see a sudden spike in an NFT collection’s floor price, driven by fear of missing out.

2. This emotional decision-making often leads to buying at peak prices without assessing the project's fundamentals.
3. Without research, traders end up holding assets that quickly lose value once hype fades.
4. To prevent this, set personal price limits and wait for market stabilization before entering.
5. Always analyze historical sales data on platforms like OpenSea or Blur before placing bids.

Ignoring gas fees and transaction costs

1. New traders frequently overlook the high Ethereum gas fees during network congestion, which can eat into profits.

2. Repeated failed transactions or last-minute bid wars increase expenses significantly.
3. Some users initiate multiple listings or cancellations, not realizing each action incurs a cost.
4. Using layer-2 solutions like Polygon or scheduling transactions during low-traffic hours reduces fees.
5. Track real-time gas prices using tools such as Etherscan’s Gas Tracker to optimize timing.

Falling for fake collections and scams

1. Scammers create counterfeit versions of popular NFTs with slight name variations or copied artwork.

2. These fraudulent listings appear in search results and trick inexperienced buyers into purchasing worthless tokens.
3. Phishing links shared in Discord or Twitter DMs redirect users to spoofed marketplaces.
4. Always verify contract addresses through official project websites and social media channels.
5. Double-check URLs and enable two-factor authentication on all crypto accounts.

Not understanding royalties and secondary market rules

1. Some marketplaces allow buyers to bypass creator royalties by using third-party trades or private sales.

2. Traders unaware of these mechanics may unintentionally support platforms that harm artists and long-term project sustainability.
3. Changes in royalty enforcement policies across platforms create confusion about fair compensation.
4. Evaluate where you buy and sell based on ethical considerations and marketplace reputation.
5. Support projects that transparently enforce royalties and contribute to ecosystem health.

Holding illiquid assets without an exit plan

1. Beginners often accumulate NFTs from obscure or low-volume projects with limited buyer interest.

2. When attempting to sell, they face wide bid-ask spreads or no offers at all.
3. Illiquid holdings tie up capital and reduce flexibility for new opportunities.
4. Prioritize collections with consistent trading volume and active communities.
5. Monitor liquidity metrics and avoid hoarding speculative assets without clear utility or demand.

Trusting influencers without independent research

1. Prominent figures in the NFT space sometimes shill projects for undisclosed payments.

2. Blindly following recommendations leads to poor investment choices and exposure to rug pulls.
3. Verified checkmarks on social media do not guarantee authenticity or integrity.
4. Cross-reference influencer claims with on-chain activity and community sentiment.
5. Use tools like Dune Analytics dashboards to validate project performance independently.

Underestimating wallet security risks

1. Connecting wallets to untrusted websites can expose private keys or allow unauthorized transactions.

2. Malicious dApps may request excessive permissions, enabling asset draining.
3. Reusing seed phrases or storing them digitally increases vulnerability to hacks.
4. Use hardware wallets for high-value NFT storage and approve only verified contracts.
5. Never share your recovery phrase and revoke unused token approvals via sites like Revoke.cash.

Frequently Asked Questions

How can I verify if an NFT collection is authentic?Check the official website for the verified smart contract address and compare it with the one listed on the marketplace. Look for blue checkmarks on OpenSea or Blur, but don’t rely solely on them. Join the project’s official Discord or Telegram and confirm announcements match those from team members.

What should I do if I bought a counterfeit NFT?Immediately stop any further transactions with the suspected scammer. Report the listing to the marketplace support team with evidence. While recovery is unlikely, documenting the incident helps protect others. Learn to recognize red flags like misspelled names, low follower counts, and unverified contracts.

Why did my NFT transaction fail even after paying gas fees?Transactions fail due to insufficient gas limits, network congestion, or price slippage in auction scenarios. Wallets sometimes estimate incorrectly, leading to underpriced gas. You can speed up or cancel pending transactions if they remain unconfirmed, but failed ones still consume gas.

Can someone steal my NFT just by me connecting my wallet?Yes, if you connect to a malicious site that tricks you into signing a harmful message or approving unlimited token access. Always review what permissions you're granting. A simple connection won’t transfer assets, but an approved signature might allow theft if exploited.