The trading logic of the bottom outbreak of excellent narratives

1. How to choose the target

Even some excellent narratives with a market value of more than 50M or even 100M in the first wave of outbreaks often have a deep correction of about 70-80%. For example, $MOODENG, $AI16Z, $BAN, $LUCE, and other MEME coins with a stable market value of 100M+ later all had deep correction moments after the first wave of outbreaks.

On the one hand, this is the natural result of the ebb and flow of emotions (you can see the K-line trend of $SLERF just opened at the beginning of the year. At that time, it was impossible for anyone to pre-sit in the early stage of $SLERF. That K-line was the most classic natural K-line of pure retail PVP). On the other hand, it is also the dealer's need to make a big correction to ship profits, give more people the opportunity to get on board, and raise the average cost of everyone for the next outbreak. Therefore, to make money from this logic, you need to first judge whether this narrative has endurance and whether there is a possibility of a second outbreak.

How to judge whether a narrative will have a second outbreak is also a matter that requires experience accumulation. Because sometimes this is related to the trading logic of the dealer behind it, we can only increase the winning rate as much as possible but cannot achieve 100% victory. Generally speaking, I think the narratives that are likely to explode for the second time will have one or more of the following characteristics:

1. A community with a strong unique culture, not limited to the Chinese-speaking world (such as $NEIRO, $ACT, $ELIZA)

2. The concept itself is related to a certain major event that is certain to happen in the future (such as $BAN, $LUCE)

3. It has certain technological fundamentals, will continue to grow, and benefit from the explosion of related tracks (such as $GOAL, $RIF)

The following narratives are more likely to have a wave:

1. The concept itself is related to an event that has already occurred, and the probability of subsequent events is low (because things have already happened, and people's attention will slowly shift to new events)

2. Celebrity shouting, such as Musk concept, Trump concept, V God concept, CZ concept (celebrity will continue to post new concepts, attention will be distracted, and the meme coins of celebrity concepts are generally temporarily generated + wild dealers enter, you will see a large number of same-name disks at the same time, and the dealer may run away after the first wave to play new concepts)

3. Non-leading stocks in similar narrative concepts (after a wave of explosion + correction, funds tend to enter the leading stocks rather than the second, third, fourth and fifth stocks)