Meme coins. They’re funny creatures. One coin might completely flop, failing to perform entirely. At the same time, another, very similar coin, might deliver extraordinary results, going on to be worth hundreds of millions, if not billions of dollars.

Let’s be straight through, holding meme coins feels more like a stab in the dark than a reasoned, logical, and well-researched investment. 

Market swings can be brutal, and what goes up must come down (in most cases), so the question is - is there a way to play the meme coin trading game without losing and getting totally wiped out?

Dear BONKbot readers. Welcome to the world of scalping. We’ll be your guide for this (hopefully) smooth ride.

Please buckle yourself in if you enjoy consistent, smaller wins, over the gamble of chasing pumps and moonshots.

With this strategy, you’ll be learning to hold meme coins for much shorter periods of time, rapidly buying and selling them as they trend, to try and make incremental profits.

Of course, there are risks too, as you’ll see. 

Let’s get into it. 

How Does Meme Coin Scalping Work?

Well, in the context of meme coins, scalping is a short-term trading strategy where traders aim to profit on incremental price changes.

The core idea behind scalping is simple: identify small price movements, quickly enter a trade, then exit as soon as you've made a small profit (0.5%-1%).

These profits might seem insignificant on their own, but when repeated dozens or even hundreds of times a day, they can add up to quite substantial returns.

Depending on how much you’re investing for each purchase and sale, you could certainly make enough money to live on, or enjoy a nice supplementary income. 

When applied more specifically to meme coins, you must consider the extreme volatility that these assets provide.

High volatility on short-term trades is perfect for scalpers, but not so great for those who want to hold long-term and accumulate profits (check out our guide to how long you should hold meme coins for)

So, in theory, scalping allows you to take advantage of the potential upside of meme coins (extreme volatility) while minimizing your exposure to the downside (risk of downward price action).

You need to be nimble, decisive, and disciplined, focusing on quick wins and avoiding the temptation to hold on for bigger gains (don’t do it!). 

With meme coins, steady small wins are much more achievable than huge gains. Some will not be satisfied unless they have the bragging rights of getting a moonshot call right, but they might rack up so many losses in the process.

How To Scalp Meme Coins: A Step-by-Step Guide

After the theory, comes the practice. 

Do you have what it takes? Scalping meme coins will demand:

• Quick thinking

• Disciplined execution

• Patience

  
  

This isn't a get-rich-quick scheme; just keep that in mind.

Here's a step-by-step guide to get you started.

Step 1: Choosing the Right Meme Coin

Not all meme coins are well-suited for scalping. You need to choose one that offers the right combination of liquidity and volatility

• Liquidity: Search for meme coins with large trading volumes on major exchanges (places like Binance or Coinbase). High liquidity ensures you can enter and exit trades quickly without significant slippage (the difference between the expected price and the actual price you pay).

  
  

• Volatility: You need volatility to scalp, but not so much that trading becomes wildly unpredictable. Find coins with consistent, short-term price movements. Avoid coins that are flatlining or experiencing extreme, erratic spikes.

  
  

• Avoid Pump and Dumps: Be extremely cautious of coins exhibiting obvious pump-and-dump behavior (this is a lot of the random coins you’ll find on Twitter blowing their own trumpets). These coins are often artificially inflated and will crash quickly, orchestrating a dump to leave you with significant losses (check out our guide to rugpulls)

  
  

Step 2: Setting Up Your Charting Tools

Scalping requires real-time information. You'll need access to charting tools that provide up-to-the-second price data and access to decent technical indicators (here are some trading signals you might want to learn about)

• Real-time Charts: Use a charting platform that offers real-time price data. Delays WILL cost you money in scalping.

  
  

• Key Indicators: Focus on a few simple, beginner-friendly technical indicators to help you identify potential entry and exit points (here’s a guide to help), such as:

  
  

  • Volume: Volume confirms the strength of price movements. Look for increasing volume when the price moves in your desired direction. A price increase with low volume may be a false signal.

    
    

  • 9-day Exponential Moving Average (EMA): The 9 EMA helps identify short-term trends. If the price is consistently above the 9 EMA, it suggests an upward trend. If the price is consistently below the 9 EMA, it suggests a downward trend

    
    

  • Relative Strength Index (RSI): The RSI helps identify overbought and oversold conditions on short timeframes. An RSI above 70 suggests the coin may be overbought and due for a pullback. An RSI below 30 suggests the coin may be oversold and due for a bounce.

Don’t worry if these terms and ideas seem too technical, we have a genius solution you will find at the very end of this guide.

Step 3: Identifying Scalping Opportunities

Use your charting tools and indicators to identify potential scalping opportunities.

• Entry Signals: Look for specific signals that suggest a potential price movement, as explained in Step 2.

  
  

• Stop-Loss Orders: This is crucial. Protect your capital by setting a tight stop-loss order just below your entry point. For example, if you buy a coin at 0.001, set a stop loss at 0.00095 (a 0.05% loss). The exact percentage will depend on your risk tolerance and the volatility of the coin. You may be willing to lose more. Just remember that a coin might drop 1% before it pumps 5%. 

  
  

• Take-Profit Orders: Aim for small gains like 0.5% to 1% per trade. Set a take-profit order at your target price to automatically exit the trade when it reaches your desired profit.

  
  

In short, when you have the data to suggest a coin will rise in price, you buy it, then put in two orders - one to sell when it hits a price below your cost price, and one to sell when it hits a certain price above your cost price.

This way you either guarantee a tiny loss or a small profit.

If you repeat this over and over and your chart analysis is solid and you execute trades fast, you’re likely to win more than you lose.

Step 4: Executing the Trade and Monitoring

With all of the above in mind, all that’s left to do is make sure you get your orders in fast and execute the deals smoothly. Errors and delays can be costly. 

• Fast Execution: Use limit orders to enter and exit trades quickly at your desired price. Market orders can result in slippage, especially with volatile meme coins.

  
  

• Constant Monitoring: Scalping requires constant attention. Monitor your trades and be ready to exit if the price moves against you. The SACRED LAW of trading is this: Don't let emotions cloud your judgment.

  
  

• Discipline: Stick to your trading plan. Don't get greedy and try to hold on for bigger gains. Remember, scalping is about small, consistent profits.

  
  

Risks in Meme Coin Scalping

Look, there’s no two ways about it: scalping meme coins is a high-risk activity. You can lose money quickly if you're not careful.

So, don't invest money you can't afford to lose. However, if you start scalping frequently and you get into a good routine with it, you can easily make enough money to live on and have a good life.

Unfortunately, human nature has been known to self-sabotage… Please consider the risks.

• Market Volatility: Meme coins are notorious for extreme volatility, which can lead to rapid losses. A sudden, unexpected price swing can wipe out your profits in seconds.

  
  

• Liquidity Issues: If liquidity dries up, you may not be able to exit your trades at your desired price, leading to losses. This is known as slippage. Imagine trying to sell a coin but there are no buyers at the price you want, so your sale won’t go through until it hits a buyer at an even lower price

  
  

• Scams and Rug Pulls: Be extremely cautious of new and unproven meme coins. Many are designed to scam investors. A "rug pull" is when the creators of a coin suddenly abandon the project and sell all their holdings, causing the price to crash to basically zero.

  
  

• Transaction Fees: Transaction fees can eat into your profits when scalping. Each trade incurs a fee, which can tally up quickly, especially if you're making frequent trades.

  
  

• Psychological Impact: Scalping can be stressful and emotionally draining. It requires constant focus and quick decision-making. It's easy to get caught up in the excitement and make impulsive decisions. It's also easy to get emotional if trades start going wrong. 

  
  

Let’s move on to the “where” of scalping.

Tools and Platforms for Effective Scalping

Having the right tools and platforms is essential to do the job! You’ll want to look for platforms that offer the big three of scalping: low fees, real-time charting, and fast order execution. Remember to always do your own research before using any platform.

Trading Platforms

• Choose reputable cryptocurrency exchanges like Binance, KuCoin, and Coinbase, but always research their specific features and fees first.

  
  

• Look for platforms with API access if you're an advanced trader who wants to automate your scalping strategies.

  
  

Charting Software

• Utilize reliable charting platforms like TradingView or Coinigy. These platforms offer advanced charting tools, a wide range of technical indicators, and customizable alerts.

  
  

Real-time Data Analysis

• Subscribe to services that provide real-time price and volume data. This information is crucial for making informed decisions and identifying scalping opportunities (you can try signals and Telegram trading groups too)

  
  

Due Diligence Tools

• Use resources like CoinGecko, CoinMarketCap, BullX, DappRadar, Dune Analytics, and Photon to research meme coins. Check their market capitalization, trading volume, community activity, and website to assess their legitimacy.

  
  

Remember to do your own research and due diligence before using any tool or platform. The information in this guide is for educational purposes only and should not be considered financial advice.

Final Thoughts on Scalping

Let’s give it to you totally straight. Meme coin scalping can be super profitable, but it’s definitely not for the faint of heart.

Some scalpers develop anxiety and trouble sleeping due to the high-risk, high-speed nature of the work.

You are getting adrenaline, dopamine, and cortisol hits all day long, far more than the human body was ever designed for. 

If you’re made of tougher stuff, you’re willing to develop your technical analysis and execution skills, and you think you can handle risk, then scalping might be good for you.

Start small, practice your strategies, and protect yourself and your capital at all times. If you want to dabble without risk, try paper trading (simulated trading) to feel the market and test yourself first. 

And, finally, if all of this just sounds a bit too much… Here's the genius idea we promised you before. An automated trading bot that can do it all for you! 

Give BONKbot a try. We’re the most popular and fastest Telegram trading bot on Solana.