Do not have biases against anything that can make money.
In this cycle, Meme coins are one of the core narratives. Regardless of whether you are optimistic about them, you should participate and practice firsthand.
After all, VC coins continue to decline, while Meme coins, even with a PVP (player versus player) mechanism, still have opportunities for profit, and there are even cases of getting rich quickly.
As a newcomer to Meme coins, I have summarized my learning path and shared it with everyone for more efficient learning. Teaching and learning go hand in hand, and this is also my process of improvement.
01 Establishing Awareness#
Before entering an unfamiliar field, you need to establish an overall understanding; otherwise, you can only rely on luck.
Mental Preparation#
Playing Meme coins is like playing the lottery; you need to be prepared for your principal to go to zero; learning can improve your winning rate.
Establishing Initial Awareness#
- What are Meme coins?: Products of community sentiment and culture.
- Why play Meme coins?: Small bets for big returns, pursuing a turnaround rather than just doubling.
- What are the risks of Meme coins?: Full of conspiracy groups and extreme volatility.
Understanding Basic Knowledge#
- Pixiu Coin: Contract maliciously restricts, can only buy and not sell, buying means going 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 earning the price difference.
- Smart Money: On-chain high-yield user wallet addresses, can track their investment targets.
- Internal/External Market: Tokens that have not successfully launched on the issuance platform are internal; those that successfully add liquidity on DEX are external.
Classification of Meme Coins#
- Hype Type: Riding on keywords of Musk, CZ, Vitalik, or major events, causing short-term traffic explosions.
- Narrative Type: Based on popular industry narratives, such as DeSci + Meme, AI + Meme.
- Cultural Type: Based on cultural connotations, such as Sad Frog, Doge memes, and other animal types.
- Mechanism Type: With innovative mechanisms, such as $people being the first DAO.
- Pyramid Scheme Type: Air coins that recruit people online and offline.
Daily Life of Meme Coin Players#
- Follow Trends: Follow a large number of Meme coin-related Chinese and English KOL accounts on Twitter to get the latest updates.
- Join Groups: Join discussion groups to observe group sentiment.
- Follow Chains: Closely monitor tokens that move from the internal market to the external market.
Overall Principles#
- Speed is the only unbreakable skill in the world
- Do not fall in love with battle; avoid diamond hands (long-term holding).
- Manage risks well, and take profits and losses in a timely manner.
02 Practical Operation: Methodology#
Step One: Discover Potential New Coins (Chain Scanning)
Analyze Token Contract Security#
- Is it a Pixiu platform?: Use tools to check contract code, 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 supply of tokens.
- Is there a locked liquidity pool?: Locking liquidity pools prevents large holders from withdrawing, causing price crashes.
Analyze Chip Structure#
- Token Market Value: 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 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: Evaluate community activity, member count, admin responses, and AMA activities.
- Is there KOL promotion?: Multiple KOLs promoting indicates a solid community.
Step Two: Discover Smart Money Movements (Copy Trading)
Officially marked addresses have limited reference value; you need to establish your personal 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; focus on active Meme coin players or KOL addresses on-chain.
- Avoid information noise: Filter based on trading habits to reduce the number of wallets to follow.
Step Three: Final Buy and Sell (Trading)
- Market Sentiment: The key is to understand sentiment; exit in a timely manner when community FOMO (fear of missing out) peaks; judgment is based on community sentiment and on-chain indicators, which are highly subjective.
- Risk Management: Set stop-loss points to avoid emotional chasing; disciplined investing is crucial.
- Timing Selection: Pay attention to news events or social media hotspots; technical indicators often fail, prioritize event-driven actions.
- Phase Selection: Identify wash trading or distribution; wash trading features front-row selling and back-row buying with similar quantities; distribution features early profit-takers selling, 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 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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