IV. Strategy & Fund Management
Last updated
Last updated
Having selected smart money and reliable tools, the next critical step is formulating your strategy. Many beginner think that just copying smart money actions will lead to easy profits, but in reality, there are numerous variables at play: your buy price is usually higher than smart money’s, trading costs and slippage continuously erode profits, not to mention the brutal probability that 99% of Memecoins will go to zero on the first day, and the remaining 1-2% will follow suit in the next 2-3 days.
Here, we’ll focus on three key areas: fund allocation, take-profit & stop-loss rules, handling slippage, and strategy adjustments. These elements collectively form your risk management and profit framework, helping you navigate the complex market environment as smoothly as possible.
Fixed Amount vs. Percentage-Based Buying
When smart money make a move, you can set a fixed amount to follow (e.g., 0.5 SOL per trade) or buy based on the smart money’s position size. If your funds are limited but smart money is making large trades, percentage-based buying might lead to too small an investment, causing trading costs to eat up your profits.
Consider Trading Costs & Scale Control
Factor in trading costs, Gas fees, and slippage losses. Investing too little per trade (like 0.02 SOL) is often not worthwhile because if a trade fails or fees are slightly high, your profit margin gets severely squeezed. It’s recommended to keep each trade above 0.1 SOL, and if possible, maintain at least 1 SOL per Agent or wallet to achieve a more reasonable cost structure and profit probability.
Take-Profit Logic
The nature of Memes means that most tokens can’t escape the zero fate, with only a handful becoming 100x GEMs. Smart money might adopt strategies like “diamond-handing” or “doubling up on profits and holding the rest for long-term gains.” As a copier, you can adopt a similar approach:
Sell part of your holdings when the token doubles, ensuring you don’t lose money even if it eventually zeros out.
Keep the remaining position to follow smart money strategies, aiming for higher multiples.
Stop-Loss Settings
More crucial than take-profit because the vast majority of tokens will go to 0. If the price plummets and smart money doesn’t sell, you need to cut your losses decisively to avoid total capital loss. Set stop-loss based on token performance, such as automatically selling if the price drops below 50% or 70% of your buy price, depending on your risk tolerance.
EasyCoin offers multiple take-profit and stop-loss options, so users can easily build more flexible strategies.
The winning strategy in the EasyCoin’s profit contest
At EasyCoin’s first profit competition, a user turned 3 SOL into 48 SOL by:
Selecting smart money from EasyCoin’s filter
Not setting take-profit
Catching two 100x GEMs through one Agent
Adding bonuses from the event to earn an additional $10K USD
Think about it—Meme trading is all about catching those 100x GEMs. Of course, different smart money have different abilities to snag GEMs, so it’s not one-size-fits-all.
Slippage Strategy in High Volatility:
Memecoinss can change in a blink, with prices swinging wildly in seconds. If your slippage is set too low (like 1-2% on traditional DEXs), you might miss out on many trades during pump phases. Setting it too high (like 50%) could lead to paying excessive premiums during extreme market conditions. The best approach is to dynamically adjust slippage based on market heat and your personal tolerance. Slightly increase slippage during hot bursts to ensure trades get filled, and tighten it during calmer periods to minimize unnecessary losses.
In simple terms:
Conservative strategies: Set slippage around 25%.
Aggressive strategies: Opt for 50% or even higher slippage.
Liquidity & Market Cap Filtering:
After a Memecoin is launched on Raydium, liquidity becomes a critical factor because market cap is calculated as price × supply. If someone manipulates liquidity on Raydium, they can inflate the price artificially, making the market cap look misleadingly high. For example, if a token’s pool on Raydium has only $1 worth of SOL and 2 units of the token, the market cap could falsely show as $50M ($0.5 × 100M), which is absurd. Such manipulated data can be used for scams, so filtering tokens based on liquidity is an essential safety measure.
Filtering Freezable Tokens:
Scam tokens on Solana are typically those “Freezable.” These tokens can freeze your holdings after swap/buy. It’s better to filter out these tokens when buying.
For most people, developing a solid copy trading strategy requires a high learning cost. Most bots require manual configuration, which means you need to understand the necessary details. However, with EasyCoin’s AI-Generated Strategies, you can bypass much of this hassle. EasyCoin’s AI analyzes smart money’s trading records and recent token price movements to automatically create strategies and provide profit expectations. Once the AI generates the strategy, simply apply the settings to create it directly.
