I spent the last few days researching how to make money and profit from the current memecoin craze. Here are my findings:
First and foremost, everything you read in this article should not be considered financial advice.
Still, do your due diligence and research before making any investment decisions. May the meme coin season favor us🙏
Blockchain Selection:
Choose a blockchain with high memecoin trading volumes and low fees. Popular choices include Solana, Sui, and Binance Smart Chain (BSC).
Initial Setup:
- Trading Filters on Dexscreener:
- Time Frame: 5-minute
- Market Cap: $20k
- Liquidity: $10k
- Age: 3 hours minimum
- Volume Check:
- Sort coins by volume, top to bottom. Focus on the latest coins with high trade volumes.
Quick Coin Analysis:
- Eye Test:
- Check the coin visually for any red flags.
- Contract Scanning:
- Scan the contract for potential rug pulls or honeypots using tools like Checkdex.xyz.
- Ensure the coin passes these checks:
- Liquidity: Locked liquidity is ideal.
- Market Cap vs. Liquidity: Liquidity should be less than or equal to the market cap.
- Buy and Sell Test: Try a small transaction (about $5-$10) to ensure the coin can be traded and remains in your wallet after purchase.
- Buyer and Seller Ratios:
- Favor coins with more buyers than sellers. This indicates demand.
- Socials and Community:
- Check social media presence and engagement.
- Holders’ Distribution:
- Look for a minimum of 300 holders.
- Beware if there are multiple holders (6+) with the same % or amount, which can indicate a bot setup.
- Top holders should own less than 30% collectively.
- Name and Ticker:
- Find coins that follow the latest meme trends. Being in sync with the trend increases traction.
Buying Strategy:
- Get in Early: Prioritize new coins running ads or getting attention on Dexscreener, but always research first.
- DCA (Dollar-Cost Average) Approach:
- Buying: Start with small amounts and increase gradually. Don’t buy at the peak; wait for a dip.
- Selling: Sell in portions to lock in profits without risking everything. This can ensure that you capture gains even if the price fluctuates.
Taking Profits and Managing Risk:
- Profit Goal: Start taking profits around a 30% gain.
- Secure Initials and Profits: Prioritize taking out your initial investment plus some profit.
- Risk Management: Avoid leaving substantial money in short-term trades overnight.
- Volume and Holders Check: Monitor the volume in the last 5 minutes, buyers vs. sellers, and total holders.
Exit Strategy:
- DCA Out: Take profits steadily rather than waiting for the peak.
- Leave a “Moon Bag”: Keep a small amount (around $10 or 1%) invested for potential upside without risking much.
Key Reminders:
- Be Patient and Don’t Chase the Top: Coins often drop in price after a run-up, so waiting can often get you a better entry.
- Act on Evidence, Not Emotion: You don’t need to catch every top. It’s best to exit once buyers and sellers level out.
This framework can help you navigate memecoin trading safely and with potential for consistent profits. Always secure the bag when in profit, and remember—you only make money when you sell!
