Quick mini thread on my approach to buying low caps from a chart perspective:
- Never buy a parabolic coin with over a 250k+ market cap
- Most coins blow off around 250-500k market
cap. You'll get around a 40-60% drop then a
consolidation period/spring
- If you want to buy a parabolic coin, it's best to snipe sub 50k market cap or on the second leg after the consolidation period/spring
- Around the 250-500k mark, early investors are up 25-50x and it's always a good time for them to take profit. Don't be their exit liquidity
- Problem is, after the initial 250-500k run-up, most coins don't have their second chance for new highs. The project is already dead
- This is where it comes to narrative trading(see pinned). The coins that go for the second leg are pumped by narrative + decent shillers
- Sure, the memecoin narrative is hot right now. What if I didn't ape at 250k and it runs to 2mm? Personally, I'd rather miss that 10x than ape a solid chunk of change into a parabolic trend. The environment is still very PVP. Jeets want quick profits
- People like round numbers. Physiological resistance is real
- Usually after a 100k+ market cap, it's pretty clear skies to the 200k+ range
- Usually after a 1mm+ market cap, it's pretty clear skies to 2-3mm
- Usually after a 3-5mm+ market cap, it's pretty clear skies to 10mm
- Buying a parabolic trend in the 20-60k market cap is definitely risky. But this is where sizing is important
- You'll feel a lot better about getting rugged on $150 for a chance to make a 20x+ then aping a larger stack at 250k for a $500-$1000 rug
- A good strategy for me is:
- Always get initial out + some fun profits
- Never ape ur initial back in, if u want to throw some profits back in after a dip feel free. Protect your capital at all costs
- If I sell a chunk and it moves hard, I let it be. Always leave a moonbag
There is a lot more to unpack here. But I've posted some decent stuff recently and its more than enough info for you to get a better grasp on the low cap market
Enjoy
- The Toast
Formatting looks weird on cellular for the first tweet
Meh
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