On Pump.Fun, unlike other places, the earlier I enter a currency, the larger my position will be.
Written by: Hermes
Translated by: DeepTechFlow
This market will provide the most fair on-chain PvP environment. If you want to stay ahead in the game, you must dive deep into the Pump.Fun trenches, otherwise, you won't be able to profit.
This thread will cover
Why choose Pump.Fun?
What makes a quality coin?
Trading strategies
Before Raydium
After Raydium
Risk reduction
Other relevant information
- Why choose Pump.Fun? ---------------
To answer this question, you first need to understand how the product works.
Anyone can create a token in seconds with a small fee of 0.02 $SOL, the operation is simple, fast, and cost-effective. If the creator wants a certain proportion of the supply, they need to buy at the moment of creating the token. This makes it easier to track developer and team wallets, and it is a fair market because there are no hidden wallets, no airdrops, and no farms. This is also why many coins on Pump.Fun are successful in having a Chief Troll Officer (CTO).
When trading on Pump.Fun, you will never be completely rug pulled, because liquidity cannot be drained, and as mentioned earlier—there are no token airdrops.
Lastly, it is very important to note that even if you miss the initial Pump.Fun stage, you can still seize early opportunities, as it takes about 5-20 minutes for a currency to move from Pump.Fun to Raydium with a market value of about $60,000.
No other platform can provide such a favorable and fair on-chain market. All these reasons should make you believe that Pump.Fun is worth a try.
- What makes a quality coin? ------------
Different people focus on different things when looking for the key to wealth. I try to keep it simple:
Name—Does it make sense, is the meme narrative appealing, does it have meme potential (e.g., wif/michi has infinite meme potential)
Token code—Should be relevant, short, and easy to remember
Website—Is there a website? -> Is the website unique? -> Has effort and thought been put into the website?
Twitter—Must have relevant profile picture and background image (you would be surprised how important the background image is)
Bonus points: Telegram has stickers, robot settings, prepayment Dex, and non-anonymous developers/teams
Of course, just because a project meets all of the above conditions does not guarantee that it will do well, but it increases your chances of stumbling upon a good project by chance and greatly reduces the time you spend browsing junk information.
Trading strategies
A) Before Raydium
When the currency has not yet left Pump.Fun, you should pay attention to the following market value levels:
$15K market value—This is the first price point that must be broken through. It is usually not difficult to break through, but you should be aware that this is a good re-entry position.
KOTH (about 30K)—This is an important level, and it is the main selling position, because reaching KOTH means that you (or new buyers) will see it on the landing page, attracting more attention. Most coins will encounter selling after reaching KOTH, so if you are on the sidelines, wait for this selling.
\ruggers often buy a large amount of their own tokens and directly push the price to KOTH, then sell them all at once. Be aware of this and do not rush into projects that reach this level in one candlestick chart.
$45k-55K—This is the last hurdle before entering Raydium, and it is also the most difficult to pass. People sell in this range because, 1. The liquidity on Raydium is thicker, 2. People anticipate the "Raydium sell-off" (will be explained in detail later). I never buy in this range because the risk-return ratio is not worth it for me, and many currencies do not have the strength to break through this level.
When trading on Pump.Fun, unlike other places, the earlier I enter a currency, the larger my position will be. Why? Because the downside risk is limited. For example, if you buy a currency at a price of $10,000, the lowest point it can drop to is $5,000, and the upside potential is much greater than the downside risk.
B) After Raydium
Usually, the token will drop and bottom out in the first 5-10 minutes of trading on Raydium. Depending on the strength of the currency, you will usually see it bottom out within the market value range of $50K (very strong) to $20K (very weak). My approach is to determine the amount I want to buy (e.g., 1 SOL) and deploy 50% when the value is between 50K-40K, and the remaining 50% when it is between 20K-30K.
Why is the initial sell-off of the currency so brutal?
One reason is that the liquidity is about three times lower than on Pump.Fun. Another reason is that if the DEX is not updated (usually, currencies with prepayment DEX perform better), people will panic. Lastly, people anticipate this sell-off, so they hesitate when buying.
Usually, if I miss a currency on Pump.Fun, I wait for this initial drop. If it does not happen, 90% of the time I will give up on it.
A very important point, the currencies released on Pump.Fun will never truly disappear.
What does this mean? People like to be the CTO of tokens on Pump.Fun because these tokens are safe. We have many successful CTOs—$SC, $boy, $speed are just a few recent examples.
If a currency stands out among many currencies, has performed strongly, and formed a community, but later "dies," then you must pay attention to it. Usually, another team will seek to take over and drive it again (these are the most profitable plays and the way I make most of my profits).
Risk reduction
In this section, I will discuss what I do and do not do when trading Pump.Fun coins.
On Pump.Fun
If I do not have information about the relevant team and their professional background, I will not enter a currency with a market value exceeding $30,000. The risk-return ratio is not worth it, as most currencies cannot stand out from Pump.Fun (less than double).
I sell partially at KOTH and the 45-55K level. If the narrative is good enough, I will keep a core position, otherwise, I will sell completely before Raydium and re-enter after the initial sell-off.
Outside of Pump.Fun
I buy currencies that have bottomed out or are in the accumulation range. The "bottom" I consider for currencies is a market value of 10K-20K.
Examples of bottoming out (the chart looks bad, but this is actually the case for most currencies)
Accumulation range:
These currencies are worth a try if:
a) the meme is good, and you expect others to notice it and make it a CTO
b) a CTO is forming or has already formed, and is being handled properly
When you buy currencies at a price that cannot go any lower, you significantly reduce the trading risk. The worst case is that you lose 50%, the best case is that you make 100 times the profit—good risk-return ratio.
- Other relevant information ------
When trading tokens on Pump.Fun, I use Photon (they have integrated support for Pump.Fun), which is much smoother than manual trading.
To find a currency, I just need to watch the fluctuations on Pump.Fun and check for things that catch my attention, but if you are looking for a more organized approach, you can filter the types of currencies you want to see through pumpmaster.fun.
I also have a little trick, which is not to sell for next to nothing, as they are very common CTOs. You wouldn't want to be the one who sold before a big rise.
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