1. The critical role memes play in the current cycle as a novel form of attention economy.

2. My project, dappOS, is about to launch an intent-based exchange closely tied to meme tokens and trading.

So, around two months ago, I began a deep, systematic study of meme trading. This coincided with a bull market in BTC and meme tokens, during which I achieved significant gains—rolling an initial capital of 10 SOL to over 1,000 SOL, a 100x increase. Now, as meme token hype has somewhat subsided, I’ve taken the opportunity to organize and share my trading insights for discussion.

There are many ways to make money in the market, but achieving consistent profitability requires understanding the logic behind each trade—essentially, identifying whose money you’re earning. If you jump into a trade without clarifying this, you’re likely to end up on the losing side.

Traders have different styles, and through my experience, I’ve identified two types of profits I excel at making:

1. Profits from emerging trend-driven sentiment.

2. Profits from the bottoming out and breakout of well-crafted narratives.

Since the underlying logic for these two strategies differs, so do the selection of tokens, timing of entry, and exit strategies. I’ll share the details below. Even in the case of "VC-backed coins" on exchanges, where prices are driven more by sentiment than fundamentals, some of these strategies remain applicable.

In a bull market, when a new trend or narrative begins to spread virally, meme tokens associated with it often experience explosive growth.

Typical features of this phase include:

• The token price surges rapidly with minimal pullback, or any pullback is limited to less than 30%.

• Twitter KOLs (Key Opinion Leaders), WeChat/Telegram groups, and news outlets start discussing the trend. Early on, the tone is mostly hype, but as time passes, neutral or negative commentary begins to surface. This marks the point of viral spread, as skeptics feel compelled to comment despite not participating.

To capture such opportunities, there are two approaches:

a. Regularly monitor Twitter and GMGN for trending tokens, while developing a sense of narrative strength. For example, the narratives of $BAN, $RIF, and $LUCE each had unique angles and novelty. Similarly, classics like $DOGE also possess enduring narrative power.

b. If you miss the initial buzz, evaluate the narrative’s viral stage when you notice KOLs or group discussions. If the project is still in the early stages of viral spread, it’s often a good entry point.

In general, I prefer tokens with market caps between $5M and $50M when entering. Tokens below $5M are often overly fragile, as early holders hype them but lack solid backing. These tokens can crash to zero in a single move. Tokens above $50M offer lower upside potential, requiring more cautious position sizing. For popular tokens exceeding $50M, I tend to wait for corrections and aim for breakout opportunities later.

When trading this type of target, immediate entry is crucial. The profit stems from riding the wave of sentiment and betting on the narrative’s viral spread. Waiting for pullbacks often means missing out, as prices can soar while KOLs hype up the token’s “infinite potential,” leaving you chasing highs and getting trapped.

In practice, to achieve a lower average entry price, I usually allocate 40% of my intended position during rapid rallies. If a pullback of 20-30% occurs, I buy the remaining 60%. If there’s no pullback, I simply hold the initial position. For tokens in a consolidation or decline phase, I commit the full position at once without planning to add more later.

For larger positions, I use a "three-wallet" approach (popularized by Hui Jie): split funds into 20%, 30%, and 50% portions across different wallets. This reduces the risk of being targeted and facilitates controlled exits later.

• If the token rises: I use the 15-minute trendline profit-taking strategy advocated by BTCdayu. This method is effective since the profits rely on sentiment, and breaking the trendline often triggers cascading sell-offs. Typically, I sell in three batches—30%, 50%, and 20%—during three waves of price increases, exiting entirely if a deep pullback approaches my cost basis.

• If the token falls: If the price never exceeds my cost basis after buying, it indicates a flaw in the selection logic. In this case, I cut losses near 50% of my cost basis. However, if the token has strong fundamentals and potential for a second narrative wave, there will likely be another, cheaper entry opportunity.

Even strong narratives with initial market caps exceeding $50M or $100M often experience deep corrections of 70-80% after the first wave. Examples include $MOODENG, $AI16Z, $BAN, and $LUCE, all of which later stabilized above $100M but had moments of significant pullbacks early on.

This is partly a natural result of sentiment ebb and flow (e.g., $SLERF's launch, which showed a purely retail-driven chart), and partly due to whales taking profits, allowing new entrants to raise the average cost basis before the next breakout.

To profit from this logic, you must assess whether the narrative has staying power and potential for a second breakout. Some factors that suggest a high likelihood of resurgence include:

• A strong, unique cultural community beyond the Chinese-speaking audience (e.g., $NEIRO, $ACT, $ELIZA).

• A narrative tied to future, certain major events (e.g., $BAN, $LUCE).

• Technological fundamentals that align with booming sectors (e.g., $GOAL, $RIF).

Conversely, narratives with a higher chance of "one-and-done" performance include:

• Concepts tied to past events with low probability of follow-up developments.

• Tokens tied to celebrity endorsements (e.g., Musk, Trump), which often lack sustained attention.

• Non-leaders in similar narratives, where funds tend to concentrate on the top choice during subsequent waves.

For this strategy, wait for a deep correction before entering. Trust that significant pullbacks will occur—if a token skyrockets from $10M to $1B without a 50% drop, it’s probably a missed opportunity. I typically enter when the token has retraced at least 70% and consolidated for over two days. I aim to buy near the lower range of this consolidation.

If the retracement is only around 50%, I might take a 40% position if I strongly believe in the project. However, due to the longer holding period and potential opportunity costs, proper position sizing is essential to maintain liquidity for new opportunities.

• If the token rises: Since this logic bets on a narrative breakout, I wait for the first breakout beyond the consolidation range. Only after a 50% gain do I apply the 15-minute trendline strategy to take profits in stages. Always hold a 20% position as a long-term bet, especially for tokens with potential to list on Binance or other major exchanges.

• If the token falls: If the price breaks below the consolidation range, especially by more than 20%, I cut losses decisively. For on-chain tokens, a breakdown often leads to a cascade of sell-offs. For exchange-listed tokens, where whales might deliberately trigger a fake breakdown, I might observe a bit longer before exiting.