It is fascinating when you see screenshots of PnLs from memecoin traders on X (formerly Twitter), and sometimes you wonder how they made that much\u00a0profit.<\/p>\n
In this short post, I\u2019ll attempt to break down these memecoin traders operations and talk a bit about some of the tools they\u00a0use.<\/p>\n
Not to bore you with definitions or history, memecoins are simply tokens that are based on memes and usually have no utility, no doxxed team, but a strong community pushing the\u00a0price.<\/p>\n
The success of a memecoin depends on the hype and the memecoin\u2019s community, and over the past few years, we\u2019ve seen a lot of successful memecoins like $SHIB, $DOGE, $WIF, and many\u00a0more.<\/p>\n
Recently, we\u2019ve seen so many memecoins coming up, not for the good reasons but for the creator to make quick cash off others, and this is giving memecoin trading a bad\u00a0name.<\/p>\n
I will highlight some of the tools these memecoin creators use so you will be familiar with them and be able to spot the bad ones in a few\u00a0seconds.<\/p>\n
A lot of memecoins these days are launching from platforms like pump.fun, Moonshot, Hypurr, Virtuals.io, and a lot more on all major\u00a0chains.<\/p>\n
Some of the platforms<\/p>\n
While these platforms do make the launch of memecoins easy by reducing the amount of liquidity required and helping the memecoins get a lot of traffic, they also make it very easy for scam creators to\u00a0act.<\/p>\n
Apart from these platforms, another thing that is important in the memecoin trading space is the Telegram bots. The bots can be used for so many things, including copytrading and DCA, which are my favorites.<\/p>\n
I spent a lot of hours observing the launches and trading patterns on these platforms so I could come up with a winning strategy.<\/p>\n
Yes, I did, and the strategy is simple\u2014join really early and dump on others before they\u00a0do.<\/p>\n
Sounds simple, right? Not really that simple if you don\u2019t know when to get in, how high the token might get to, and whether the token creator might choose to rug everyone or\u00a0not.<\/p>\n
If you\u2019ve visited these platforms before, you must have seen the amount of tokens launched per minute and how 99% of them turn out to be\u00a0scams.<\/p>\n
The questions below are from my strategy, and with this strategy, I was able to filter out the\u00a0noise.<\/p>\n
What memecoin to\u00a0buy?<\/strong><\/p>\n With memecoins, it\u2019s all about the hype and the community.<\/p>\n How active is the community?Is the hype\u00a0there?Was anything about the memecoin posted online by someone influential?What\u2019s the token distribution like?<\/p>\n You don\u2019t just buy a memecoin because of the green candles or the volumes. Those are mostly bots, and they will dump on\u00a0you.<\/p>\n When to buy into a memecoin?<\/strong><\/p>\n While everyone agrees the earlier the better, I believe the more cautious the\u00a0better.<\/p>\n Usually on these platforms, I wait till the tokens reach their curve and are live on a DEX. A curve is like a target market cap the token launched must reach before it gets listed on a major DEX, and the liquidity will be\u00a0burnt.<\/p>\n I noticed there\u2019s usually a sharp sell immediately after it\u2019s trading on a DEX. If the memecoin\u2019s hype is still there, buying after it hits the DEX further saves you from scams and memecoins that will fail, especially when multiple memecoins are created at the same time from a single topic or\u00a0post.<\/p>\n When to\u00a0sell?<\/strong><\/p>\n Now, this depends on you, but with memecoins, preservation of capital is very important.<\/p>\n Since a lot of memecoins will die off when the hype is over, what I always suggest is not to be too greedy and remember to take out part of the profit while you leave the rest to ride\u2014called a\u00a0moonbag.<\/p>\n The truth is, you won\u2019t always sell at a profit, as there will be some losses, but a good 10x or so will cover most of your\u00a0losses.<\/p>\n Profits from memecoin trading vary according to the parties involved.<\/p>\n Owners of the platforms<\/strong>: The owners of these platforms make the most profit from memecoin trading. It\u2019s like selling a shovel in a gold mine rush. They make a lot from\u00a0fees.<\/p>\n Fees (in SOL) generated by pump.fun since\u00a0launch<\/a><\/p>\n Token creators: <\/strong>While everyone can create tokens on these platforms, it still requires some level of expertise, like using volume bots when needed, building the community, and marketing. The token creators and their teams, despite all of the costs, make a lot. Those PnLs you see on X are usually from the creators or their team\u2014called Cabals.<\/p>\n Traders<\/strong>: Then they are traders. With a lot of them seeing these platforms as casinos and hoping to turn their $10 into $100k in a few minutes. It is possible, but only a few traders make that much profit. A few more traders make some profits while the majority of the traders lose their funds on the platform.<\/p>\n The question you should ask yourself is, Are you trading memecoins, or are you simply gambling?<\/p>\n I have to stop here so this write-up would not be too long, but I hope this gives you an idea and some useful strategies that you can implement into your\u00a0trading.<\/p>\n Is there any technique you use or anything you would like to add? Please mention them in the comments\u00a0below.<\/p>\n Follow me on X here<\/strong>:- https:\/\/x.com\/cryptonalyses<\/p>\n Trade memecoins, don\u2019t gamble<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" It is fascinating when you see screenshots of PnLs from memecoin traders on X (formerly Twitter), and sometimes you wonder how they made that much\u00a0profit. In this short post, I\u2019ll attempt to break down these memecoin traders operations and talk a bit about some of the tools they\u00a0use. Memecoins Not to bore you with definitions […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-32497","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/32497"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=32497"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/32497\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32497"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32497"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32497"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Memecoin trading\u00a0profits<\/strong><\/h4>\n
Conclusion<\/h3>\n