A tutorial on Meme trading that beginners must learn.

Written by: Viee, Core Contributor of Biteye

Edited by: Crush, Core Contributor of Biteye

Recently, there has been a massive explosion of on-chain traffic, with trading mascots concept coins skyrocketing by 60,000%, and the rise of DeSci narratives, making Meme coins the biggest dark horse of this bull market!

On-chain operations can be quite challenging. In this tutorial, Biteye will guide beginners step by step on how to use GMGN to trade Meme coins!

There will be an advanced section later, so stay tuned.

This article will focus on new project discovery, mainly teaching everyone how to find, analyze, and trade newly launched Meme coins.

01 Quick Introduction for Beginners

1. What is GMGN?

A website that combines a Meme coin data dashboard and trading tools.

2. What is on-chain trading?

Activities and transactions conducted directly on the blockchain, without relying on centralized exchanges like Binance or OKX.

3. What wallet should I use?

Mainstream wallets like Phantom and OKX. Installation and usage tutorials can be found on YouTube, so we won't elaborate here.

4. What is a token address (CA)?

A string of letters like "GJtJuWD9q*****wMBmtY1tpapV1sKfB2zUv9Q4aqpump". You can paste it into the GMGN search box to find this token.

As shown in the image below:

02 Discovering New Projects

1. Follow Smart Money

Tracking smart money means following the wallet addresses of users who have achieved high returns on-chain and observing their chosen investment targets. The following three links are lists of smart money on different chains on GMGN, along with corresponding icon explanations:

ETH Chain: https://gmgn.ai/discover?chain=eth

Solana Chain: https://gmgn.ai/discover/?chain=sol

Blast Chain: https://gmgn.ai/discover?chain=blast

After following smart money, any new updates will show a red bubble and sound notification (which can be turned off or on) in the lower left corner.

GMGN also provides a feature to bind Telegram notifications, so once the followed wallet performs any operation, you will receive immediate notifications.

Click "Followed" to view the real-time trading dynamics of smart money, including buy/sell/add positions/increase positions/open positions/liquidate, etc.

You can also click on any smart money address interface for more detailed information, including position analysis, profit and loss distribution, trading activities, etc.

Every day, hundreds of Meme coins are launched on-chain, and there may be concentrated buying from smart money. When choosing whom to follow, it’s best to consider your own trading habits to avoid information noise from following too many wallets. It is recommended to track wallets that are similar to your style to ensure the efficiency of the information flow.

Note that checking contract security cannot be overlooked, as many smart money wallets also buy recklessly without considering contract safety.

2. Scan Twitter and Chains

• Scan Twitter: Follow a large number of Chinese and English KOL accounts related to Meme coins on Twitter and join various discussion groups to get the latest information and updates.
• Scan Chains: Closely monitor tokens entering the external market (large market) from the internal market (small market) and quickly assess whether these tokens are worth investing in.

On the GMGN platform, you can view the following three types of tokens:

• First type: Newly created internal market tokens (highest risk)
• Second type: Internal market tokens that are about to reach full capacity
• Third type: Tokens that have entered the external market (lowest risk)

Explanation of internal/external market:

When a new project successfully deploys using the automatic token issuance tool pump.fun, users can use SOL to purchase the project's tokens. When its market cap reaches $69,000, the project's liquidity will automatically be added from pump.fun to Raydium.

• Before reaching $69,000, we call it the internal market. At this point, the project is in a very early stage, with extremely high risk;
• Once it reaches $69,000 and successfully adds liquidity on Raydium, we call it the external market. At this point, the project has made further progress, and the risk is reduced.

It is recommended to mainly focus on tokens that have entered the external market. Although there is still a high risk in the external market, it is significantly lower than in the internal market, making it relatively friendly for beginners.

Moreover, most external market tokens reaching a market cap of millions are few, leaving considerable room for profit.

Note that entering the external market does not guarantee a 100% price increase; there are also many cases where tokens quickly drop to zero after launching in the external market. Always remain cautious during the investment process!

By patiently monitoring and analyzing the performance of these tokens, we can assess their potential and investment value to ultimately achieve profits. But how exactly do we analyze? Let's look at the detailed explanation below.

03 Token Analysis

Once you have learned how to use GMGN to find new on-chain coins, the next step is to analyze and select which Meme coins are worth buying from a pile of options.

You should judge whether to buy based on trends, narratives, market cap, community, and market dynamics. Different types of Meme coin strategies also vary:

1. Trend-based

These tokens often rapidly gain popularity due to specific events or trends in a short period. They may have high initial price increases, with potential growth reaching over 10 times, from a market cap of hundreds of thousands to tens of millions.

However, if the trend is unsustainable, the price lacks support, no celebrities endorse it, it hasn't reached a new narrative level, hasn't formed a significant community, or hasn't experienced an exciting low-probability event, it may gradually lose liquidity and the price will continue to fall.

Examples of low-probability events include:

• The founder of $SLERF accidentally burned liquidity pool tokens (LP), airdrop reserved tokens, and all minted tokens, triggering a surge in bullish sentiment on-chain, leading to $SLERF quickly listing on exchanges.
• Recently, $BITCAT. As on-chain sentiment was brewing around the "mascot" concept, Bitcoin's official Twitter suddenly posted a picture of a black cat, leading some to believe it hinted at a Bitcoin mascot. As the consensus spread, the related token $BITCAT surged, experiencing a price increase from a market cap of hundreds of thousands to one hundred million within three hours that night, maintaining around fifty million in market cap later that night.

For this type of token, the following suggestions are made:

• Buy early, ideally at a market cap of hundreds of thousands. If you enter too late, do not wait until it exceeds 10 million to chase the price, as it is easy to get trapped;
• If you are optimistic about the sustainability of the trend, wait for the price to drop by 80% before entering, which can reduce risk.

2. Narrative-based

These tokens often do not rely on short-term trends for price increases but gradually rise from small to large market caps around a certain narrative or community.

Unlike the instant surges of trend-based tokens, they may experience stable growth over multiple stages, usually with market caps ranging from a few million to tens of millions, and at times even exceeding one hundred million.

For example, $RIF, which is related to antibiotics used for treating tuberculosis, is currently a leader in DeSci + Meme. The price surge of this token is due to the increasing attention on the DeSci (Decentralized Science) narrative on-chain. As the first token launched in Pump science, its buy orders have been increasing with the rising narrative heat, and its position has gradually solidified as a top player in the field.

For this type of token, my suggestions are as follows:

• Pay attention to new narratives that are also good narratives, such as DeSci, and consider gradually building positions at low market caps (hundreds of thousands to small millions);
• Monitor the social media, community activity, and capital inflow of these tokens in the medium to long term to assess their sustainability and potential.

04 How to Trade

The following is an overview of the GMGN trading system:

1. Left Column Interface

Favorites, Holdings List

Quickly understand the prices and profit changes of the tokens you have favorited and held, allowing for quick selling at any time while monitoring.

Hot, Pump, Followed List

Filter the hottest tokens and Pump tokens that best match your trading strategy by checking time, transaction count, price, and price percentage. The followed list allows for one-click buying while monitoring.

2. Main Interface in the Middle

The area below the K-line contains a wealth of information related to the token, including trading activities, traders, holders, blue-chip holders, etc., categorized by smart money, KOL/VC, whales, new wallets, snipers, large holders, developers, followed, and suspected wash trading.

When researching this token, it is also necessary to reference this information and analyze large holders, smart money, etc. For example:

• Mark suspected wash trading to determine if the market maker is trying to use small wallets to disperse tokens in an attempt to dump and run.
• Mark suspected phishing wallets; if tokens are transferred in without purchase, a warning will be given.

3. Right-side Trading Interface

View Indicators

Check indicators such as token trading volume, buy, sell, net buy, liquidity, minting data, blacklist, etc. It is also important to check the burn pool ratio and the probability of a rug pull.

Set Slippage and Enable Anti-MEV Mode

Slippage refers to the maximum acceptable deviation in token quantity for a single transaction. Increasing slippage allows for faster transaction speeds. It is generally recommended to set slippage around 0.5%, but it can be increased to 10% during volatile market conditions.

_ (Note: MEV sandwich attacks refer to MEV bots reading incoming transaction information and executing orders ahead of you, thus driving up the token price when you buy. Enabling anti-sandwich mode can effectively prevent sandwich attacks.)_

Select Amount, Manually Buy/Sell

An advanced section will be written later, discussing limit orders, automatic buying, and other operations, so stay tuned.

05 Risk Warning

Every day, hundreds of Meme coins appear on-chain, and most will go to zero. The probability of finding a golden dog (tokens with a market cap of tens of millions or over one hundred million) is extremely low, let alone listing on major exchanges.

In summary, the higher the potential return, the higher the risk. Please take responsibility for yourself!

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