2. Essential Trading Skills
1.2 On-Chain Data Intelligence
On-chain data is the most authentic and timely first-hand information, often predicting market changes in advance.
Core On-Chain Indicator Monitoring:
New Token Issuance Monitoring
Real-time new token radar: Monitor newly deployed contracts on-chain
Filtering criteria settings: Liquidity thresholds, surge in trading volume, early buyer quality
Whale Activity Monitoring
Train leader address tracking: Mark and track 50-100 high-win-rate addresses' behavior
Wallet classification: Categorize wallets by investment style, win rate, and capital scale
Fund flow analysis: Observe which new projects whale funds are flowing into
On-Chain Abnormal Behavior Identification
Sudden increase in buying pressure: Large number of buy orders in a short time
Developer address activity: Abnormal activity in project developer wallets
Liquidity changes: Significant increases or decreases in liquidity pool funds
Abnormal trading patterns: Such as numerous small scattered purchases converging on one project
DEX Transaction Data Analysis
Trading volume change rate: 24-hour trading volume growth compared to previous period
Buy-sell ratio: Ratio of buy/sell orders
Liquidity depth change: Rate of change in liquidity pool size
Average transaction size: Small retail vs. large smart money
2. Trading Decision Framework
With abundant intelligence sources, the next challenge is how to transform them into effective trading decisions. A scientific decision framework can help you make rational judgments in an information-overloaded environment.
2.1 Attention Economy Model
Meme coins are essentially products of the attention economy, with their prices reflecting the allocation of market attention resources.
Narrative Type Assessment
Cultural Resonance
★★★★★
• Aligns with broad internet culture • Has strong emotional triggers • Easy to spread and imitate
PEPE (famous cartoon frog meme), DOGE (dog meme/Musk endorsement)
Current Events
★★★★☆
• Associated with major current events • Has time sensitivity • Triggers broad social discussion
TRUMP (presidential election), FIGHT (breaking events)
Celebrity Effect
★★★★☆
• Direct endorsement by famous figures • Huge fan base • Possibility of continued exposure
PNUT (mentioned by Musk), BRETT (created by celebrity)
Innovative Narrative
★★★☆☆
• Original meme or concept • Viral spread potential • Easy to understand and share
NEIRO (new pet), GOAT (first AI Meme)
Attention Cycle Model
Meme projects typically go through the following attention cycles:
Incubation period: Initial spread in small circles, low market cap, few informed people
Acceleration period: Begins to spread to broader communities, price starts to rise
Explosion period: Widely noticed by mainstream communities, price rises rapidly
Saturation period: Almost all potential buyers are aware, upward momentum weakens
Recession period: Attention shifts to new projects, price drops
Attention-Based Trading Strategy
Incubation
0-20
Small position build-up
Extremely high
>10X
Acceleration
20-40
Increase position
High
3-10X
Explosion
40-60
Take partial profits
Medium
2-3X
Saturation
60-80
Significantly reduce position
Low
1-1.5X
Recession
80-100
Complete exit
Extremely low
<1X
2.2 Propagation Momentum Analysis
Propagation momentum is a key indicator of a Meme project's vitality, reflecting the speed and breadth of project narrative spread.
Core Propagation Indicators
DexOne tracks the following key propagation indicators:
Social Media Growth Rate:
24-hour growth rate of Twitter mentions
Telegram group membership growth speed
Discord active user change rate
KOL Influence:
Influence score (based on followers and engagement rate)
KOL diversity (coverage of KOLs from different fields)
Mention quality (positive/negative/neutral)
Cross-Platform Synergy:
Degree of narrative spread across multiple platforms simultaneously
Time difference in spread between platforms (reflecting propagation speed)
Platform diversity (social/professional/media)
Practical Application of Propagation Momentum
Different propagation patterns and how to respond:
Viral Spread Type:
Characteristics: Explosive spread in a short time, rapidly permeating all platforms
Strategy: Quick entry, set profit-taking points, be vigilant for bubble burst
Sustained Growth Type:
Characteristics: Stable but continuous spread growth, high community engagement
Strategy: Phased position building, long-term holding, attention to fundamental changes
KOL-Driven Type:
Characteristics: Driven by a few key KOLs, spread concentrated in specific circles
Strategy: Pay attention to subsequent KOL behavior, be alert to sudden departures
Cyclical Outbreak Type:
Characteristics: Periodically gaining attention, multiple propagation peaks
Strategy: Position during troughs, profit-taking during peaks
2.3 Market Sentiment Assessment
The Meme market is highly dependent on emotional drivers, making sentiment assessment a critical factor for trading success.
Market Sentiment Indicator System
DexOne builds market sentiment models based on the following indicators:
Text Sentiment Analysis:
Social media text sentiment scoring
Keyword frequency analysis (moon, rug, pump, etc.)
Emotional polarity (extremely optimistic/extremely pessimistic)
Trading Behavior Sentiment:
Buy-sell order ratio
Average transaction size changes
Transaction frequency change rate
Holding Behavior Sentiment:
Changes in proportion of long-term holding addresses
Selling intensity (selling speed)
Number of new holding addresses
Technical Indicators Reflecting Sentiment:
Price volatility
Short-term price trends
Trading volume and price synergy
Contrarian Sentiment Trading Strategy
Market sentiment often provides contrarian trading opportunities:
Extreme Fear
Massive selling, negative commentary dominates
Gradually build positions, look for oversold opportunities
Buy in batches, set stop-losses
Mild Fear
Price decline, reduced trading volume
Watch for price stabilization signals, prepare to enter
Test with small positions, focus on support levels
Neutral
Sideways consolidation, reduced discussion
Observe or participate with light positions
Set bidirectional stop-losses
Mild Optimism
Slow price increase, positive discussions increase
Buy on dips, hold existing positions
Gradually raise stop-loss levels
Extreme Optimism
Explosive rise, frenzied sentiment, FOMO sentiment
Take profits in batches, control position size
Strictly execute profit-taking plans
Sentiment Extreme Value Identification
Sentiment extremes are often important turning points:
Fear Extreme Identification:
Negative sentiment on Twitter >80%
24-hour selling volume exceeds 20% of circulation
On-chain whale addresses start buying against the trend
Euphoria Extreme Identification:
Mainstream media begins to report on the Meme project
Non-cryptocurrency communities begin discussing
24-hour price increase exceeds 100%
2.4 Risk Assessment System
Risk control is particularly important in Meme trading, and a scientific risk assessment system can help you avoid catastrophic losses.
Multi-dimensional Risk Scoring
DexOne uses a 10-point multi-dimensional risk scoring system:
Contract Risk (0-10 points):
Code audit status
Permission settings (minting rights, pause function, etc.)
Contract upgradeability
Team background verification
Liquidity Risk (0-10 points):
Liquidity pool size
Liquidity lock status
Lock duration
Token address concentration
Market Risk (0-10 points):
Price volatility
Historical selling patterns
Related asset performance
Market cycle position
Narrative Risk (0-10 points):
Narrative sustainability
Competitive project situation
Narrative expandability
Degree of narrative dependence on external factors
Risk-Oriented Position Management
Position control strategy based on risk scoring:
Low Risk
10-15%
Entry price -15%
5%
Medium Risk
5-10%
Entry price -25%
3%
High Risk
1-5%
Entry price -40%
1%
Extremely High Risk
<1%
Entry price -50%
0.5%
Risk Control Practical Tips
Diversify Investment Portfolio:
No single Meme project exceeds 5% of total assets
All Meme investments combined do not exceed 30% of total assets
Diversify across different narrative tracks
Set Hard Stop-Losses:
Pre-set stop-loss points and strictly execute
Use DexOne's automatic stop-loss function
Never move stop-loss points to "buy the dip"
Pay Attention to Risk Accumulation:
Monitor overall portfolio risk level
Actively reduce risk exposure when market sentiment is overheated
Regularly close high-risk positions to "reset" risk
2.5 Integrated Decision Framework
Integrate the above four modules into a unified decision framework, forming a systematic trading process.
DexOne Trading Decision Matrix
DexOne has developed an intuitive decision matrix to help traders make quick decisions:
Early (0-30)
High (>7)
Neutral
Medium-High
Small position entry
Early (0-30)
Low (<4)
Any
Any
Wait and observe
Mid (30-60)
High (>7)
Optimistic
Medium
Increase position
Mid (30-60)
Downtrend
Fearful
Any
Reduce/Wait
Late (60-90)
Any
Extremely Optimistic
Any
Significantly reduce
Late (60-90)
Declining
Fearful
High
Exit completely
Late (60-90)
Rising
Neutral
Low
Hold
Summary
This chapter introduced two core capabilities of Meme traders: the intelligence gathering system and the trading decision framework. By establishing a multi-layered, comprehensive intelligence network, combined with DexOne's AI-assisted tools, traders can quickly acquire and process valuable market information. At the same time, a scientific decision framework helps traders make rational judgments in an information-overloaded environment, balancing risk and return.
In the next chapter, we will delve into four key trading strategies to help you capture trading opportunities at different stages of the Meme market.
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