Do not have biases against anything that can make money.
In this cycle, Meme coins are one of the core narratives. Regardless of your outlook, you should participate and practice firsthand.
After all, while VC coins continue to decline, Meme coins still have opportunities for profit even with PVP (player versus player) mechanisms, and there are plenty of cases of getting rich quickly.
As a newcomer to Meme coins, I have summarized my learning path to learn more efficiently and share it with everyone. Teaching is a two-way street, and this is also my process of improvement.
01 Establishing Cognition#
Before entering unfamiliar fields, you need to establish an overall understanding; otherwise, you can only rely on luck.
Psychological Preparation#
Playing Meme coins is like buying a lottery ticket; you need to be prepared for the possibility of losing your principal. Learning can improve your winning rate.
Establishing Initial Understanding#
- What are Meme coins?: Products of community sentiment and culture.
- Why play Meme coins?: To gain big from small investments, pursuing a turnaround rather than just doubling.
- What are the risks of Meme coins?: Filled with conspiracy groups and extreme volatility.
Understanding Basic Knowledge#
- Pixiu Coin: Contract maliciously restricts, can only buy and not sell, buying leads to zero.
- Clippers: Front-running bots set high gas fees for priority trading, causing normal traders to buy at high prices or sell at low prices, with clippers profiting from the price difference.
- Smart Money: High-yield user wallet addresses on-chain, can track their investment targets.
- Internal/External Market: Tokens that have not successfully launched on the issuing platform are internal; those that successfully add liquidity on DEX are external.
Classification of Meme Coins#
- Hype Type: Riding on keywords related to Musk, CZ, Vitalik, or major events, resulting in short-term traffic surges.
- Narrative Type: Based on popular industry narratives, such as DeSci + Meme, AI + Meme.
- Cultural Type: Based on cultural heritage, such as Sad Frog, Doge memes, and other animal types.
- Mechanism Type: Featuring innovative mechanisms, such as $people being the first DAO.
- Pyramid Scheme Type: Air coins that recruit both online and offline.
Daily Life of Meme Coin Players#
- Follow Trends: Follow a large number of Chinese and English KOL accounts related to Meme coins on Twitter to get the latest updates.
- Join Groups: Join discussion groups to observe group sentiment.
- Follow Chains: Closely monitor tokens entering the external market from the internal market.
Overall Principles#
- Speed is the only unbreakable skill in the world
- Do not fall in love with the battle; avoid diamond hands (long-term holding).
- Manage risks well, and take profits and losses in a timely manner.
02 Practical Operations: Methodology#
Step 1: Discover Potential New Coins (Chain Scanning)
Analyze Token Contract Security#
- Is it a Pixiu platform?: Use tools to check contract code to confirm trading restrictions or locking mechanisms.
- Is the contract open source?: Open source increases transparency and prevents developers from creating backdoors.
- Have token permissions been relinquished?: Relinquishing permissions prevents issuers from arbitrarily increasing the token supply.
- Is there a locked liquidity pool?: Locking liquidity pools prevents large holders from withdrawing and causing price crashes.
Analyze Chip Structure#
- Token Market Cap: Ideal liquidity pool value is above 100 SOL.
- Number of Holders: Recommended to be over 1,000 addresses.
- Recent Trading Situation: More than 60 trades within 1 minute, or over 600 trades within 5 minutes.
- Top 10 Holders' Holdings: 15%-25% is healthy, 25%-35% is sub-healthy, over 35% is unhealthy.
Analyze Project Background#
- Did the dev run away?: Check the team's past project records to confirm if there have been any updates stopped or disappearances.
- Is the team paying for ads on Dexscreener?: Paid ads indicate team confidence.
- Official Twitter account of the token: Check activity level, follower count, community interaction, and content quality.
- TG community link: Assess community activity level, member count, admin responses, and AMA events.
- Are there KOL endorsements?: Multiple KOL promotions indicate a solid community.
Step 2: Discover Smart Money Movements (Copy Trading)
Officially marked addresses have limited reference value; you need to establish your own smart money watchlist.
- How to find smart money: Track early large holders of Meme coins with good price increases, high-yield traders, or early buyers; pay attention to active Meme coin players or KOL addresses on-chain.
- Avoid information noise: Filter based on trading habits to reduce the number of wallets you follow.
Step 3: Final Buy and Sell (Trading)
- Market Sentiment: The key is understanding sentiment; exit promptly when community FOMO (fear of missing out) peaks; judgments are based on community sentiment and on-chain indicators, which are highly subjective.
- Risk Management: Set stop-loss points to avoid emotional chasing of highs and lows; disciplined investing is crucial.
- Timing Selection: Pay attention to news events or social media hotspots; technical indicators often fail, prioritize event-driven strategies.
- Phase Selection: Identify wash trading or selling; wash trading features front-row selling and back-row buying with similar quantities; selling features early profit-takers dumping, which needs to be considered for following.
03 Long-Term Learning#
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04 Summary#
When trading Meme coins, putting in more effort can improve your winning rate.
Experienced players are usually diligent, observing the market and trading 24/7.
Ordinary users are also worth participating, experiencing the fast-paced Meme coin market; not just for making money, but also to perceive trading and learn from it.
Finally, I will continue to update my learning dynamics on Meme coins, hoping to provide help.
from @YueXiaoYu
Related Reading#
【Must-Read for Beginners! Binance Megadrop Project Risk-Free Participation Guide, Step by Step Teaching You to Earn Profits】
【Real Stories of Getting Rich in the Crypto World】 Many people ask me, after years of trading coins, how did I go from 0 to 11 million and then to a debt of 100,000?
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