CONVICTION vs DEGENERATE TRADING IN MEMECOINS
Categories of meme trading strategies:
- Trend/Community/Hype trading (CONVICTION)
- Dead token trading and CTO (CONVICTION)
- Narrative trading (DEGEN CONVICTION)
- News trading: Buy the rumor - sell the news (DEGEN conviction)
- Events trading (DEGEN conviction)
- Black Swan trading - a special type of events trading (DEGEN)
- Second/third/fourth runner trading (DEGEN)
From the above, it is clear that conviction, although a major part of memecoin trading, makes up only a little part of the memecoins trading meta. Most memecoins are degen plays β Fast, Loud, and Fleeting and should be held only for a brief moment/day (5 minutes - 1 day tops) β
- Viral news? - Quick flip
- Viral Tiktok/Instagram meme? - Quick flip
- Elon tweet? - Quick flip
- Elon changed his name on X? - Quick flip
- Celebrity launched token? - Quick Flip
99% of these plays are exit liquidity setups. Unless youβre early and nimble, youβll get dumped on. Infact, out of the tens of thousands of tokens being deployed on pumpfun and bonkfun daily we only get a handful of memecoins that should be traded with conviction monthly but here is the thing - these conviction plays are goldmines, relatively low risk and are easier to spot when you've understood the ins and outs of the memecoins meta but if you're a beginner you will certainly face some difficulties trying to spot them in the beginning. Conviction is a personal thing and it is built from a blend of experience and observation, not just vibes or feelings.
Here is a short guide to help build your convictions when trading memecoins -
1. NARRATIVE/TREND FIT AND COMMUNITY EFFORT IS EVERYTHING
Every memecoin that sends has either one or both of these, the stronger, the better.
*Note: Cabal push is also a thing too but a cabal is also a type of community too but they generally stay out of the public eye.
2. ALWAYS BE IN SYNC WITH THE MARKET
Even after understanding the memecoin trading culture, it is important that you're always updated about what is happening in the market. At any given time in your meme trading career you should know the lore/narrative behind the top 10 trending tokens on Dexscreener, if the marketcap of these tokens are organic then what influencers/community are bullposting them and the track records of these influencers - follow them if they are genuine. Also, joining active organic communities of meme traders is a must, it isn't optional.
3. FRONT RUNNING EVERYONE ELSE - IMPORTANT QUESTIONS TO ANSWER BEFORE BUYING A TOKEN
Are eyes still on this token? What eyes are on this token? Will more eyes soon be on this token? What eyes will potentially be on this token?
Ask yourself these questions and answer them before buying a token and if you canβt answer these questions with confidence, donβt buy.
4. WALLET TRACKING
Wallet tracking is a reference/confirmation tool, not a guide. Many smart wallets know that they have many copytraders and they use their copytraders as exit liquidity. However you can find success in tracking insider wallets as they front-run the masses.
5. DON'T FALL IN LOVE
Never fall in love with memecoins - whether conviction plays or degen plays or otherwise. If your reason for buying a memecoin no longer holds, abandon it. If you are skeptical, size down or leave a moonbag.
FINAL NOTES ON CONVICTION PLAYS
- You'll have more luck finding conviction plays on Dexscreener than any other trading bot/platform.
- Only size into tokens that are 8 hours old minimum. 6 hours if you are jittery and impatient. Treat every new token like a degen play in its first 5 - 6 hours. Only consider it a conviction play if it survives beyond that window.
- Top Holders must be smart and no single top holder should hold more than 3.5%.
- ALWAYS TAKE PROFITS. And work for your bags((push the community/token) if you can.