In the Merriam-Webster dictionary, “meme” originally referred to an amusing or interesting item (such as a captioned picture or video) or a type of item that spreads widely online, particularly through social media. This term underwent significant evolution in 2013 with the emergence of Dogecoin (DOGE), thereby giving birth to the concept of Memecoin (meme tokens).

Currently, the concept of Memecoin predominantly refers to tokens featuring cute or amusing images but lacking practical value (their value depends entirely on their ability to attract attention). Of course, within the broader ecosystem, if one insists on considering BTC as the largest Memecoin in the blockchain field, it’s not entirely unreasonable. However, I lean more towards categorizing tokens as Memecoins when their value depends solely on their attention-grabbing abilities, or when they also possess some on-chain utility (such as participation in blockchain activities).

If we were to categorize Memecoins based on risk levels, they could roughly be divided into the following categories:

The first category includes MemeCoins that have already gained significant recognition, such as those listed on major centralized exchanges like Binance. In a sense, they no longer deserve to be dismissively called “dog coins,” as they have shown attributes worthy of long-term attention. Examples from previous cycles include SHIB and FLOKI, which have maintained good gains in this bull market. Similarly, newly emerged coins in this cycle like PEPE and WIF could also be worth long-term monitoring if they align with your interests.

The second category consists of MemeCoins with relatively high market capitalization, active communities, large trading volumes, and high visibility within decentralized exchanges (DEXs). These coins carry lower risks of sudden abandonment. Leveraging the narrative power of MemeCoins during bullish periods has already shown promising price performances. However, without new narratives or sustained hype (such as listing on major CEXs), these coins may face significant volatility.

It’s important to note that many people focus solely on market capitalization, but this is just one aspect of evaluating MemeCoins. It doesn’t guarantee safety. Liquidity, trading volume, and the number of holders also need consideration. For instance, on the Solana blockchain, there are over 10,788 coins with a market cap exceeding $100 million, 3,748 coins exceeding $1 billion, and 1,251 coins exceeding $10 billion. Many MemeCoins with market caps over $10 billion have minimal daily trading volumes, making them potentially questionable investments (such as those you can only buy into but not sell out of).

The third category includes the myriad of MemeCoins spread across various DEXs. According to DEXTools data, there are currently over 4 million trading pairs for MemeCoins across all chains (with a conservative estimate of over 1 million tokens). Given the ease of token creation, this space is flooded with numerous garbage tokens, scams, and tokens with contract vulnerabilities. Over 99% of these tokens typically end in either a rug pull or worthlessness. Only a very small percentage of MemeCoins have the potential to evolve into the first or second category mentioned earlier.

Of course, many people understand the relationship between risk and reward and are still willing to take chances in the second or third categories. Some seek shortcuts, such as joining specific MemeCoin groups or following certain influencers to exploit information asymmetry for firsthand opportunities. Others adopt a more rational approach, validating reliability or discovering new opportunities through platforms like Twitter or DEX Screeners, in addition to relying on others’ information.

Next, let’s continue to outline the steps or strategies for trading MemeCoins:

1. Using Trading Bots:

In general, manual trading suffices for most transactions. However, if you aim to execute preemptive trades (like getting in early on a MemeCoin listing), employing sniper bots may be necessary. These tools facilitate rapid sniping, automated trading, and real-time market analysis.

Various networks offer popular bot tools tailored for different purposes. Some bots support multiple networks simultaneously, providing flexibility for users to choose based on their preferences. This selection process can be guided by the tools available, as illustrated below.

Each trading bot’s official website provides detailed usage guides and tutorials. Interested individuals can explore these resources on their own. Here, we’ll briefly demonstrate setting up SolTradingBot, as shown in the following image.

Specific settings can be customized based on your trading habits or strategies. For example:

• Set 20% slippage for buy and sell.

• Set 20% slippage for Sniper.

• Use a 0.002 SOL tip for buy and sell.

• Use a 0.006 SOL tip for Sniper.

Additionally, for security reasons, it’s advisable to create a new wallet specifically for using the bot rather than connecting directly to your main wallet holding large assets. Once the settings are configured, simply click on “Token Sniper,” paste the contract address (CA) of the MemeCoin you wish to snipe, specify the mode and the amount of SOL, and you can start sniping. Since you’re using the bot to make preemptive trades when buying, it’s recommended to decisively take profits when closing positions, without hesitation.

2. Using DEX Aggregators:

There are numerous on-chain aggregator platforms available for MemeCoins. As mentioned in previous articles, there are over 10 tools such as DexScreener, DEXTools, AVE, birdeye, etc., commonly used for this purpose.

Here’s a brief demonstration using DexScreener:

Step 1: Navigate to the DexScreener platform and click on “New Pairs” in the left sidebar. On the new page that opens, select the blockchain you’re interested in, using Solana blockchain as an example.

Step 2, use Filters for necessary selection and filtering, such as displaying only MemeCoins with online time greater than 24 hours, liquidity pool over $50,000, and FDV over $200,000, according to your preferences. As shown in the following figure.

Step 3, click on the name of the corresponding token to open the details page. Next, check the basic information of the MemeCoin and proceed to Twitter/Telegram/Discord to examine its community activity or engagement. Alternatively, you can use social querying tools to directly verify the actual activity data of the token community. As shown in the following figure.

In addition to checking the community activity, you can also use security querying tools to verify if there are any vulnerabilities in the token’s contract. This will help you distinguish between genuine tokens and potential RUG projects. As shown in the following figure.

Although some DEX aggregators provide modules to view community activity and contract security data, using more specialized querying tools as shown in the screenshot above can be more advantageous for thorough checks.

Step 4, monitor MemeCoins that you believe have potential for upward movement. There are two specific approaches: one, you can record using Excel or any tool you prefer; two, directly utilize the Watchlist button at the bottom right corner of DexScreener to add them to your monitoring list, or click on Alerts to set up alert notifications. As shown in the following figure.

Additionally, it’s important to note: due to the abundance of similarly named tokens on-chain, searching for “WIF” will yield dozens of tokens with that name, as shown in the following figure.

So, if you see someone discussing a certain MemeCoin in a group like XX, and you want to verify it using tools like DexScreener (for checking charts, prices, market cap, liquidity, etc.), it’s recommended to search using the corresponding token’s contract address to avoid entering fake token pages.

Similarly, if you want to swap on a DEX, you must also use the contract address for the operation. Finding the contract address of a token can be done in several simple ways: ask the person who shared the token with you directly, check the token’s official website (usually available), or search on platforms like CoinMarketCap or CoinGecko (although some MemeCoins may not be listed on these platforms).

In other words, if the person recommending the token doesn’t know its contract address or even the basic official website (or Twitter), do you think this person or the MemeCoin they recommend is trustworthy?

3. Basic Strategies for Trading MemeCoins

Firstly, because most MemeCoins have highly volatile prices, mentally prepare yourself to trade MemeCoins only with assets you can afford to lose entirely.

Secondly, consider the choice of blockchain. Apart from well-known and popular ones like Solana, Ethereum, BSC, and Base, there are dozens of other chains where various MemeCoins can be traded. As mentioned earlier, there are now over 4.2 million trading pairs of MemeCoins on all chains. Therefore, considering risks and effort, our current advice is to select top MemeCoins on popular blockchains.

So, how do you judge popular blockchains?

A simple criterion is to follow the “money”: which blockchain has more people and more money, and which blockchain can continue to attract new money? These are likely the popular blockchains.

So, how do you define top MemeCoins?

Broadening the scope a bit, we can consider the top 10 MemeCoins on each respective blockchain as top MemeCoins. Of course, within this category, there may also be distinctions like tier one and tier two. As for ranking, my suggestion is to consider whether they are listed on CMC (CoinMarketCap) and their market capitalization. Let’s take Solana as an example. According to these criteria, the top MemeCoins currently are WIF (market cap $3 billion), BONK ($2.3 billion), BOME ($900 million), TRUMP ($500 million), etc.

As for the smaller tokens or “garbage coins” in various small pools on DEX platforms, it’s best to ignore them unless you have ample time and energy for extensive research and exploration. Additionally, successful investment often requires a resilient mindset that surpasses that of 99% of people. Therefore, focusing on tier one projects on each blockchain or in each niche should suffice. Examples include PEPE (on Ethereum), WIF (on Solana), ORDI (on BRC20), etc. Even if these top MemeCoins have less dramatic gains, you stand a better chance of holding onto them. Can you hold onto the others?

Avoid excessive greed and unrealistic expectations of hundredfold returns without corresponding dedication and mindset. If you have considerable time and energy, and enjoy research, then exploring other opportunities is feasible. However, it requires a methodical approach, creativity, and learning from each experience. For instance, using trading bots as mentioned earlier: many people simply read about them without applying them practically or thinking critically about their implementation.

Here I will simply give an example of analogy. If I am focusing on the MemeCoin of the Solana chain, then:

• I will thoroughly review all Solana-supported bots (using their official guides) and gain hands-on experience with them. Subsequently, I will select 1-2 tools for regular use. It’s important to note that using trading bots incurs fees, which I will verify on each bot’s official website.

• I will gather tools like DexScreener by searching on Google or directly asking for recommendations. I’ll familiarize myself with each tool’s functionalities and unique features, maintaining detailed records for future reference.

• Apart from DEX aggregators, I’ll compile a list of other tools relevant to MemeCoins, such as security checkers (to verify token contract security) and wallet trackers (to monitor meme influencers’ addresses in real-time, as previously detailed).

• I’ll create a watchlist to document MemeCoins I’m considering or have pending decisions on, including key information. I’ll also consider joining relevant forums (X, TG, DC) to stay updated on their latest developments.

• I’ll even consider following at least 500 meme-related Twitter accounts, not limited to just key opinion leaders (KOLs). These accounts regularly share meme-related information, as previously discussed in other articles detailing specific methods.

• For new tokens, I’ll aim to buy immediately after their launch (using trading bots to secure early purchases). For top MemeCoins, I’ll refrain from impulsive buying and instead wait for significant dips or my predetermined entry points, accumulating through CEX or DEX platforms.

• I won’t allocate a large portion of my portfolio to MemeCoins, ensuring that the total amount invested does not exceed $100,000. Specifically, for new tokens, my strategy will focus on short-term gains with quick exits after doubling or reducing positions to zero. Conversely, for top MemeCoins that I’m bullish on, I’ll adopt a Dollar-Cost Averaging (DCA) approach, holding for several months or even longer. When selling, I’ll do so gradually instead of all at once, basing my decisions not solely on individual project market cap changes but also on shifts in the overall market cap of meme coins. For instance, I might consider profit-taking when the total market cap of meme coins reaches around $2 trillion USD, using indicators like BTC.D and USDT.D alongside this benchmark.

Of course, the examples I provided are just one way I might approach these tasks personally. They may not be suitable for everyone because everyone’s circumstances are different. You should consider your own situation when thinking through and implementing strategies.

Even if you have mastered certain methods and can proficiently use blockchain data tools or tracking utilities, it doesn’t guarantee outsized returns on MemeCoins. It merely increases your chances and success probabilities.

Moreover, if you believe you have access to unique information disparities for profitable MemeCoin trading or claim to have connections with market makers, these methods may not align with your approach. Always adapt strategies to your own capabilities and opportunities.

Statement:

1. This article is reproduced from [话李话外], the original title is “Steps and strategies for correctly trading MemeCoin” , the copyright belongs to the original author [话李话外 ], if you have any objection to the reprint, please contact Gate Learn Team, the team will handle it as soon as possible according to relevant procedures.

2. Disclaimer: The views and opinions expressed in this article represent only the author’s personal views and do not constitute any investment advice.

3. Other language versions of the article are translated by the Gate Learn team, not mentioned in Gate.io, the translated article may not be reproduced, distributed or plagiarized.