Everything You Need to Know About Pump.Fun (Including a Tutorial on How to Identify Projects)

Original Title: “PumpFun - your all-in-one guide for successful trading”

Author: Hermes

Compiled by: Deep Tide TechFlow

This market will provide the fairest on-chain PvP environment. If you want to stay ahead in the game, you must dig deep into the Pump.Fun trenches; otherwise, you won't be able to profit.

This topic will cover:

1. Why choose Pump.Fun?
2. What makes a quality coin?
3. Trading strategies
4. Before Raydium
5. After Raydium
6. Reducing risk
7. Other relevant information

1. Why choose Pump.Fun?

To answer this question, you first need to understand how the product works.

Anyone can create a token in seconds for a small fee of 0.02 $SOL; this process is simple, quick, and cost-effective. If the creator wants a certain percentage of the supply, they need to purchase it at the moment of token creation. This makes it easier to track developers and team wallets, creating a fair market with no hidden wallets, no airdrops, and no farms. This is also why many Pump.Fun coins successfully have a Chief Troll Officer (CTO).

When trading on Pump.Fun, you will never be completely rug-pulled because liquidity cannot be drained, and as mentioned earlier—there are no token airdrops.

Finally, it's very important to note that even if you miss the initial Pump.Fun phase, you can still seize early opportunities, as a coin typically transitions from Pump.Fun to Raydium with a market cap of about $60,000 in approximately 5-20 minutes.

No other platform can offer such a favorable and fair on-chain market. All these reasons should convince you that Pump.Fun is worth a try.

2. What makes a quality coin?

Different people will focus on different things when searching for the key to wealth. I try to keep it simple:

• Name—Does it make sense? Is the meme narrative appealing? Does it have meme potential? (For example, wif/michi has unlimited meme potential)
• Token code—Should be relevant, short, and memorable
• Website—Is there a website? -> Is the website unique? -> Has effort and thought been put into the website?
• Twitter—Must have a relevant avatar and background image (you'd be surprised how important the background image is)
• Bonus points: Telegram has stickers, bot setups, pre-paid Dex, and non-anonymous developers/teams

Of course, just because a project meets all the above criteria does not guarantee it will perform well, but it increases your chances of accidentally discovering a good project and significantly reduces your time spent sifting through junk.

3. Trading strategies

A) Before Raydium

When a coin has not yet left Pump.Fun, you should pay attention to the following market cap levels:

$15K market cap—This is the first price point that must be broken. It's usually not hard to break it, but you should be aware that this is a good re-entry position.

KOTH (around $30K)—This is an important level, and it's the main position to sell because reaching KOTH means you (or new buyers) will see it on the landing page, attracting more attention. Most coins will encounter sell-offs after reaching KOTH, so if you're on the sidelines, wait for this sell-off.

ruggers typically buy a large amount of their tokens and push the price directly to KOTH, then sell off all at once. Be cautious of this and don't rush into projects that reach that level in a single candlestick.

$45K-$55K—This is the last checkpoint before entering Raydium and the hardest to pass. People sell in this range because, 1. liquidity on Raydium is thicker, 2. people anticipate a "Raydium sell-off" (which will be detailed later). I never buy in this range because, for me, the risk-reward ratio is not worth it, and many coins lack the strength to break through this level.

On Pump.Fun, unlike elsewhere, the earlier I enter a coin, the larger my position size. Why? Because the downside risk is limited. For example, if you buy a coin at a price of $10,000, the lowest it can drop to is $5,000, while the upside potential far exceeds the downside risk.

B) After Raydium

Typically, tokens drop and hit bottom in the first 5-10 minutes of trading on Raydium. Depending on the strength of the coin, you will usually see it bottom out in the market cap range of $50K (very strong) to $20K (very weak). My approach is to determine the amount I want to buy (e.g., 1 SOL) and deploy 50% when the coin value is in the $50K-$40K range, and deploy the remaining 50% when it is in the $20K-$30K range.

Why is the initial sell-off of a coin so brutal?

One reason is that liquidity is about three times lower than on Pump.Fun. Another reason is that if the DEX has not updated (tokens on pre-paid DEX usually perform stronger), people panic. Finally, people anticipate this sell-off, so they hesitate when buying.

Typically, if I miss a coin on Pump.Fun, I wait for this initial drop. If it doesn't happen, I will give up on it 90% of the time.

It's very important to note that coins released through Pump.Fun never truly die.

What does this mean? People love being the CTO of tokens on Pump.Fun because these coins are safe. We have many successful CTOs—$SC, $boy, $speed are just a few recent examples.

If a coin stands out among many, has performed strongly, and has formed a community but later "dies," be sure to keep an eye on it. Usually, another team will seek to take over and push it again (these are the most profitable plays and the way I make most of my profits).

4. Reducing risk

In this section, I will discuss what I do and do not do when trading Pump.Fun coins.

On Pump.Fun

If I do not have information about the relevant team and their professional background, I will not enter coins with a market cap exceeding $30K. The risk-reward ratio is not worth it because most coins cannot stand out from Pump.Fun (less than double).

I sell at the KOTH and $45K-$55K levels. If the narrative is good enough, I will keep a core position; otherwise, I will sell completely before Raydium and re-enter after the initial sell-off.

Outside of Pump.Fun

I buy coins that have bottomed out or are in an accumulation range. The "bottom" for coins, in my opinion, is a market cap of $10K-$20K.

Bottom examples (the charts may look bad, but this is actually the case for most coins)

Accumulation range:

These coins are worth a shot if:

a) The meme is good, and you expect others to notice it and take on the CTO role

b) The CTO is forming or has already formed and is being handled well

When you buy coins at prices that cannot go any lower, you significantly reduce trading risk. The worst-case scenario is a 50% loss, while the best-case scenario is a 100x gain—this is a good risk-reward ratio.

5. Other relevant information

When trading tokens on Pump.Fun, I use Photon (they have aggregated support for Pump.Fun), which is much smoother than manual buying and selling.

To find a coin, I just need to keep an eye on the fluctuations on Pump.Fun and check for things that catch my attention, but if you're looking for a more organized approach, you can filter the types of coins you want to see through pumpmaster.fun.

I also have a little tip: don’t sell for something worthless, as they are very common CTOs. You wouldn’t want to be the person who sells before a significant rise.