If you’ve heard about the meme coin craze and want to know how you can buy or trade them, this step-by-step approach is what you need to start. It’s based on my personal experience in the meme coin trading world.

Steps to trade meme coins:

• Pick a blockchain
• Choose a trading platform and set up your wallet
• Join meme coin trading groups (free and/or paid)
• Find meme coin traders on X (Twitter) and Telegram
• Build or choose a trading strategy

Pick a Blockchain

The first step for trading meme coins is to know what blockchain is hyped for meme coin trading. Meme coins are built on many chains and blockchain developers are always happy about that because it’s one of the best ways to promote and attract users to use their chain.

However, you need to pick a chain that is fit for trading meme coins. The main two factors that make a chain suitable for that are low fees and high activities.

All the major meme coin activities in 2024 are happening in two chains: Solana and Base.

These chains also have very low transaction fees so you can even trade their meme coins with small amounts and the fees don’t meaningfully affect your PnL.

Choose a Trading Platform and Set up your Wallet

There are several types of platforms that you can trade meme coins on but in general, we can place them in 3 main categories:

• On-chain platforms AKA DEXs
• Off-chain exchanges AKA CEXs
• Trading bots

On-Chain Platforms (DEX)

Decentralized Exchanges or Dexs are peer-to-peer platforms where transactions or trades happen on-chain and there is no middleman. There are no traditional brokers involved and all the trades occur on-chain.

The advantage of DEX trading is transparency and privacy. No need to trust any brokers to execute your trades. Plus, you can trade all the coins on a blockchain as soon as they are created.

The downside is first you need to protect your fund personally and if you are new to crypto trading or the crypto world in general, you need to first make yourself familiar with some level of knowledge. For example, you need to learn about different types of wallets and how you secure them.

 Besides, trading fees in some chains such as Bitcoin and Ethereum are a bit high so trading small amounts is not reasonable although this is not the case for the main meme coin trading chains such as Solana and Base — their fees are nominal.

So if you are new to crypto trading you might want to start with off-chain exchanges.

However, if you are serious about meme coin trading and want to take advantage of many opportunities in DEX trading, your real destination for trading is the on-chain platforms.

Pros:

• Privacy and transparency
• All existing meme coins are available
• Sniping and copy trading are possible

Cons:

• Managing your own wallet and coins
• Need basic knowledge about blockchain
• High fees in Ethereum (ERC20) and Bitcoin

There are several DEXs in each blockchain but these are the main ones:

• Uniswap for chains such as Ethereum, Base and Arbitrum.
• Raydium and Jupiter for Solana
• PancakeSwap for BSC
• Trader Joe XYZ for Avalanche

When you want to trade on the DEXs, you need a decentralized wallet which is an extension installed on your browser.

The most popular decentralized wallets are:

• Metamask (for ETH, Base, Avalanche, BSC)
• Phantom (For Solana)
• Solflare (for Solana)

Note: Make sure to download their app from their official websites and don’t click on any ads. The official sites for the above wallets are metamask.io, phantom.app, and solflare.com.

After installation, you have to set up your wallet which is basically creating a 12- or 24-word seed phrase. This seed phrase is your key to access your wallet in case you lose/change your device/browser. Everyone with that seed phrase can have access to your wallet and every coin in it so make sure to save it somewhere safe out of the sight of anyone.

Off-Chain Exchanges (CEXs)

If you are new to trading meme coins you might want to first dip your toes using Centralized Exchanges or CEXs and then move on to DEXs.

If you are a TA trader, perhaps with a background in Forex trading, here is where you would probably be comfortable. However, you lose many opportunities such as snipping or even copy trading.

Meme coins are created on DEXs first and then some request to be on different CEXs as well, so you definitely can’t snipe them — read about the sniping strategy in this article.

 Plus, you can’t see the trades on-chain so you have no idea who the profitable traders of a coin are. As a result, this is not the best approach if you decide to use a strategy such as copy trading.

Of course, a few CEXs offer some types of copy trading systems and might provide data on traders who trade on their platforms but first, the stats come from the broker and you need to trust them, and secondly it contains only the traders of a specific broker.

Pros:

• Easy to use
• No need to manage your wallet

Cons:

• Lack of privacy
• Lower number of meme coins
• Not suitable for sniping and copy trading

I personally use CEXs every now and then and my favorite one is Mexc. It’s easy to deposit and withdraw without KYC and provides many meme coins in different chains sooner than other CEXs.

Trading Bots

If you are very serious about meme coin trading and want to do it professionally, you should use trading bots.

For example, some meme coin trading strategies such as sniping are almost impossible without a bot. You want to buy a token the moment it comes out so milliseconds are important here. unless you’re Flash with a superhero speed you can’t snipe manually.

You also need a bot when it comes to copy trading. After finding a profitable trader/wallet to copy its trades, you should place orders as soon as the trader opens a position. Again, if you’re not Flash you need a bot to automate the process. You give the address to the bot and specify the amount you want to buy or sell then it fetches every single trade the trader takes and copies that for you.

There are a few types of bots but the widely used that are designed specifically for meme coin trading is telegram bots. These types of bots are built on top of the Telegram app so for using them you don’t need to download any extra app.

The most popular telegram bots for meme coin trading are:

Unibot (for sniping and copy trading ETH/BASE/ARB tokens)

Banana Gun (for sniping ETH/BASE tokens)

Trojan (for copy trading Solana tokens)

Defi Solana Bot (for sniping Solana tokens)                   

Make sure to check out their tutorials/ docs to get a good grasp of them before you use them.

Join Meme Coin Trading Groups

Joining meme coin trading groups, both free and paid, can be a double-edged sword. On one hand, they offer valuable insights and a sense of community. On the other hand, there’s a risk of falling prey to hype and misinformation. Here’s how to navigate these groups effectively:

The Advantages:

• Shared Knowledge: Groups often share news, technical analysis, and project updates you might miss otherwise.
• Collective Wisdom: Discussions can unearth hidden gems or expose potential red flags you wouldn’t have considered alone.
• Community Support: Get advice from experienced traders and build a network within the meme coin space.

Approaching with Caution:

• Beware the Hype Train: Groups can be echo chambers, fueling excitement that may not reflect reality. Do your own research before blindly following calls.
• Pump and Dumps: Some groups might promote coins for personal gain, leading to price manipulation. Be wary of sudden, unexplained surges.
• Paid Groups Don’t Guarantee Success: Don’t assume paying for a group guarantees profits. Analyze their track record and free content before committing.

Tips for Effective Participation:

• Lurk Before You Leap: Observe the group dynamics for a while to understand the quality of information and discussions.
• Ask Questions: Don’t be afraid to ask for clarification or different perspectives.
• Develop Your Own Analysis: Use the group’s insights as a starting point, but conduct your own research before making investment decisions.

There are many free groups out there but some of the best ones are the communities on the telegram bots that I introduced in the previous section — Trading Bot.

Find Meme Coin Traders on X (Twitter) and Telegram

Hunting down prominent meme coin traders on Twitter and Telegram can be a great way to stay on top of trends and discover promising projects. However, it’s crucial to separate genuine influencers from those just chasing clout. Here’s how to navigate these platforms effectively:

Twitter:

• Meme Coin Hashtags: Search for relevant hashtags like #MemeCoin or the name of a specific meme coin like $Wif, $Bonk, etc. This will expose you to tweets from active traders and communities.
• Influencer Accounts: Look for accounts with a large following and a consistent track record of discussing meme coins. However, follower count isn’t everything. Check the quality of their tweets, the level of engagement, and the overall sentiment.
• Verification Check: A blue checkmark indicates a verified account, often belonging to established figures. While not a foolproof indicator, it adds a layer of credibility.

Telegram:

• Meme Coin Groups: Many groups focus specifically on meme coins. Join a few with active discussions and see who emerges as consistent voices with valuable insights.
• Independent Analysts: Look for individuals known for their meme coin analysis. Some might have their own Telegram channels or be active participants in existing groups. You can find them on Twitter first and then join their Telegram groups or channels.
• Red Flag Radar: Watch out for excessive shilling, unrealistic promises, or attempts to manipulate the market. Reputable traders will focus on education and analysis, not just blind promotion.

Remember:

• Do Your Own Research (DYOR): Don’t blindly follow any influencer’s recommendations. Use their insights as a starting point, but always conduct your own research before investing.
• Track Record Matters: Look at the influencer’s past analysis. Did their calls pan out? How transparent are they about their successes and failures?
• Community Engagement: Favor influencers who actively engage with their audience, answer questions, and provide well-rounded analysis.

By following these steps, you can find valuable sources of information on Twitter and Telegram to enhance your meme coin trading journey. Remember, cultivate a healthy dose of skepticism and prioritize independent research before making any investment decisions.

Choose a Trading Strategy

Congratulations if you’ve reached this part of the article, you’re now know far more than a beginner about meme coin trading however you still need a successful strategy for trading.

If you’re familiar with technical analysis you might want to do charting and take your trades based on TA setups. Although you might be able to make profits using TA I find on-chain strategies better.

One of the strong suites of blockchain is that everything, well almost everything, is on open ledgers meaning you can find out loads of things about trading activities by exploring data and transactions.

On-chain analysis can help you find out deep insights on transactions or trades related to different meme coins. You can see who trades what and if they’re losing money or reaping profits.

Knowing all that, you can design various strategies from copying profitable traders to degenly sniping meme coins at pool creations, and hope some of them moon.

Of course to master these strategies you need some level of knowledge about blockchain. You don’t necessarily need to be a blockchain expert but you should at least know how to read blockchain explorers such as Etherscan (for Ethereum coins) or Solscan (for Solana-based coins).

Anyway, whether you decide to use TA or on-chain strategies, you can check out this post where I introduce my top 4 strategies for meme coin trading.