Look for potential projects in cryptocurrency and virtual currency (especially in high-risk areas like 'shitcoins' and Meme coins) and try to minimize losses. This requires combining market understanding, technical analysis, risk control, and psychological qualities. The following are systematic suggestions:
I. Basic preparation: understand the essence of the market
Recognize high-risk attributes
'Shitcoins' (referring to low market cap tokens with no substantial projects) are mostly driven by speculation; their volatility is the norm, and over 90% will go to zero.
The market is greatly influenced by emotions, celebrity effects (e.g., Elon Musk's calls), and fund manipulation, so stay alert at all times.
Essential tools for learning
On-chain tools: Etherscan (check contracts), Dextools (analyze transactions), UniCrypt (track liquidity locking).
Community platforms: Twitter (first-hand news), Telegram (project groups), CoinGecko (filter new coins).
II. Strategies for finding potential projects
1. Basic logic for screening projects
Contract security (primary condition)
Check whether the contract has been audited (e.g., CertiK), but note that auditing does not equal absolute safety.
Eliminate the following risks:
Owner's permissions are too large (can mint new tokens, freeze transactions).
Liquidity is not locked or the lock period is too short (Rug Pull risk).
Blacklist feature (the project party can blacklist your address to prohibit selling).
Token economic model
Be wary of tokens with low circulation + high FDV (fully diluted valuation) (the team may hold a large amount of chips to dump).
View token distribution: if the top 10 addresses account for too high a proportion (>40%), be cautious.
Community and narrative
Active Telegram/Discord groups (but be wary of bots inflating activity).
Is there a 'story' to tell (e.g., riding the hype: AI, GameFi, celebrity endorsements)?
2. Specific operational steps
Track smart money
Monitor whale wallets through Etherscan or Nansen (addresses that buy large amounts of new coins).
Follow KOL's on-chain activities (but beware of pump and dump schemes).
Methods for early involvement
Participate in the presale (need to discern authenticity, beware of Discord private message scams).
Buy within 5 minutes before listing on DEX (need to bid for Gas fees in advance).
Technical signals
Sudden volume breakout (need to combine on-chain data to exclude wash trading).
Observe 'liquidity growth' (an increase in LP pools is real investment).
III. Risk control: survival first
Capital management
Only use funds you can afford to lose (recommended not to exceed 5% of total funds).
Take profit in batches (e.g., recover 50% of the principal when it doubles, and keep the rest for higher returns).
Stop-loss discipline
Set a hard stop-loss line (e.g., -30% forced exit).
Avoid 'averaging down' (increasing positions while prices drop is a major taboo for shitcoins).
Avoid common traps
Stay away from 'PiXiu' coins (tokens that can only be bought, not sold).
Do not participate in 'referral' pyramid schemes (like static + dynamic income).
IV. Psychology and cognition
Counter FOMO (Fear of Missing Out)
The surge of shitcoins often happens when you are not around; do not chase high prices out of fear of missing out.
Remember: 'Minimize losses equals profit', 90% of profits come from 10% of projects.
Reject sunk cost fallacy
If the project logic has been destroyed (e.g., signs of team running away), cut losses immediately.
V. Advanced techniques (use with caution)
Sniping listing strategy
Use bots to front-run at the moment of token listing (requires programming skills, extremely high risk).
Hedging strategies
While buying shitcoins, short mainstream coins (like BTC/ETH) to hedge systemic risk.
VI. Summary: Key principles
Do not trust, only verify: all projects must be personally checked for contracts and data.
Quick in and out: the lifecycle of shitcoins may only last a few hours.
Stay cool: emotional trading = losses.
Final reminder: the vast majority of people are not suited to play with shitcoins. If the goal is long-term stable returns, focus on Bitcoin, Ethereum, and compliant sectors (like RWA, Layer2). The essence of high-risk markets is zero-sum games, with severe survivor bias.
