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Use Case: Momentum Trading

Risk Level: Medium Risk Objective: Catch tokens with positive price momentum and strong buying pressure

Overview

Momentum trading identifies tokens that are actively trending upward with strong buying interest. This strategy aims to enter positions during confirmed uptrends and ride the momentum for profit.

Momentum Indicators

IndicatorSignal
Price ChangeConsistent positive % across timeframes
Buy/Sell RatioMore buyers than sellers
VolumeIncreasing or high trading volume
Unique WalletsGrowing participation
VolatilityModerate (too low = dead, too high = risk)

Price Momentum (Core)

price-change-pct-1h >= 5       // Positive hourly momentum
price-change-pct-24h >= 0      // Not in overall downtrend
price-change-pct-1h <= 100     // Not extreme pump (risky)

Why These Values:

  • ≥ 5% (1h): Confirmed upward movement, not just noise
  • ≥ 0% (24h): Ensures overall trend is positive or neutral
  • ≤ 100% (1h): Avoids entering after extreme pumps (dump likely)

Buy/Sell Pressure

buy-sell-ratio-1h >= 1.3       // 30% more buys than sells
buy-sell-ratio-5m >= 1.2       // Recent momentum confirmed
buyers-count-1h >= 15          // Multiple buyers, not single whale

Interpretation:

  • Ratio > 1.5: Strong buy pressure
  • Ratio 1.2-1.5: Healthy buy pressure
  • Ratio 1.0-1.2: Neutral
  • Ratio < 1.0: Sell pressure (avoid)

Volume Confirmation

volume-1h >= 30                // Active trading
volume-5m >= 3                 // Recent activity

Why Volume Matters:

  • Price movement without volume = unsustainable
  • Volume confirms the trend has participation
  • Low volume moves reverse quickly

Wallet Diversity

unique-wallets-1h >= 15        // Multiple participants
buyers-count-24h >= 30         // Sustained interest

Volatility Range

volatility-1h >= 5             // Enough movement for profit
volatility-1h <= 50            // Not dangerously volatile

Safety Baseline

mint-authority = 'none'
freeze-authority = 'none'
current-liquidity >= 30
top-1-holder-pct <= 20

Complete Configuration

# === MOMENTUM TRADING CONFIGURATION ===
 
# Price Momentum
price-change-pct-1h: >= 5
price-change-pct-1h: <= 100
price-change-pct-24h: >= 0
 
# Buy/Sell Pressure
buy-sell-ratio-1h: >= 1.3
buy-sell-ratio-5m: >= 1.2
buyers-count-1h: >= 15
 
# Volume Confirmation
volume-1h: >= 30
volume-5m: >= 3
 
# Wallet Diversity
unique-wallets-1h: >= 15
buyers-count-24h: >= 30
 
# Volatility Range
volatility-1h: >= 5
volatility-1h: <= 50
 
# Safety Baseline
mint-authority: 'none'
freeze-authority: 'none'
current-liquidity: >= 30
top-1-holder-pct: <= 20

Momentum Timeframe Strategies

Short-Term Momentum (Scalping)

Focus on 1m-15m timeframes:

price-change-pct-5m: >= 2
price-change-pct-15m: >= 5
buy-sell-ratio-5m: >= 1.5
volume-5m: >= 5
tx-count-5m: >= 15

Best For: Quick trades, active monitoring

Medium-Term Momentum

Focus on 1h-4h timeframes:

price-change-pct-1h: >= 5
price-change-pct-4h: >= 10
buy-sell-ratio-1h: >= 1.3
buy-sell-ratio-4h: >= 1.2
volume-1h: >= 50
volume-4h: >= 150

Best For: Swing trades, less active monitoring

Trend Confirmation Momentum

Multi-timeframe alignment:

price-change-pct-1h: >= 3
price-change-pct-4h: >= 5
price-change-pct-24h: >= 10
buy-sell-ratio-1h: >= 1.2
buy-sell-ratio-24h: >= 1.1

Best For: Higher probability entries, longer holds

Avoiding False Momentum

Dead Cat Bounce Filter

Avoid temporary rebounds in downtrends:

price-change-pct-1h: >= 5      // Short-term up
price-change-pct-24h: >= -5    // Not crashing overall
price-change-pct-1w: >= -20    // Not in major downtrend

Pump and Dump Filter

Avoid artificial pumps:

price-change-pct-1h: <= 100    // Cap extreme moves
unique-wallets-1h: >= 20       // Multiple participants
buyers-count-1h / tx-count-1h: >= 0.3  // Diverse trading

Whale Momentum Filter

Ensure momentum isn’t whale-driven:

top-1-holder-pct: <= 15
transaction-amount-p99: <= 50
unique-wallets-1h: >= 15

Momentum Strength Tiers

Tier 1: Strong Momentum

price-change-pct-1h: >= 15
buy-sell-ratio-1h: >= 1.5
volume-1h: >= 100
unique-wallets-1h: >= 30

Signal: High confidence entry

Tier 2: Moderate Momentum

price-change-pct-1h: >= 5
price-change-pct-1h: < 15
buy-sell-ratio-1h: >= 1.2
volume-1h: >= 30
unique-wallets-1h: >= 15

Signal: Standard entry

Tier 3: Early Momentum

price-change-pct-5m: >= 3
price-change-pct-1h: >= 0
buy-sell-ratio-5m: >= 1.3
volume-5m: >= 5

Signal: Early entry, higher risk

Combining with Other Strategies

Momentum + Scam Protection

# Scam Protection
mint-authority: 'none'
freeze-authority: 'none'
permanent-delegate: false
dev-holdings: <= 15
 
# Momentum
price-change-pct-1h: >= 5
buy-sell-ratio-1h: >= 1.3
volume-1h: >= 30

Momentum + Whale Avoidance

# Whale Avoidance
top-1-holder-pct: <= 15
top-5-holders-pct: <= 40
unique-wallets-1h: >= 20
 
# Momentum
price-change-pct-1h: >= 5
buy-sell-ratio-1h: >= 1.3
transaction-amount-p50: >= 0.1

Exit Strategy Recommendations

Momentum trades require active exit management:

StrategyConfiguration
Take Profit20-50% (momentum can reverse fast)
Stop Loss-15% to -25%

Configure in Exit Strategies

What This Configuration Catches

Token TypeCaught?
Active uptrends✅ Yes
High buying pressure✅ Yes
Volume-confirmed moves✅ Yes
Stagnant tokens❌ No
Downtrends❌ No
Extreme pumps❌ No (capped at 100%)
Whale-driven pumps❌ No (diversity requirements)

Tips for Momentum Trading

  1. Don’t Chase: If a token is up 100%+, you likely missed the best entry

  2. Confirm with Volume: Price movement without volume often reverses

  3. Multi-Timeframe Agreement: Best entries when multiple timeframes align

  4. Size Appropriately: Momentum can reverse quickly - don’t overcommit

  5. Set Clear Exits: Define profit targets and stop losses before entry

  6. Monitor Ratio Changes: Falling buy/sell ratio = momentum weakening

  7. Watch Unique Wallets: Declining participation = trend ending

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