From Exchange to On-Chain Strategy: The Story of a Data-Driven Trading Pioneer

In 2017, a young man from Taiwan began his cryptocurrency journey. Two years later, he joined a mainland exchange, focusing on on-chain data analysis and project due diligence. This experience not only allowed him to accumulate a deep understanding of the industry but also laid a solid foundation for data analysis.

In 2022, this young man decided to leave the exchange and start his own business. Initially, he focused on the development of NFT application projects. However, as the NFT market gradually cooled down, he keenly observed the rise of Memecoin trading and quickly adjusted his direction, concentrating his strategy on on-chain trading and data-driven investment decisions. He and his team developed various analysis tools and trading bots to monitor the movements of on-chain addresses and generate trading signals.

This trader's strategy has distinct characteristics: it does not focus on narrative valuation, but instead emphasizes on-chain monitoring and strict take-profit and stop-loss rules. He emphasizes that by setting clear take-profit and stop-loss strategies, trading can be free from the interference of subjective emotions. At the same time, he also points out that trading logic needs to be continuously optimized. Initially, he focused on the trading behavior of smart money on-chain, then expanded his focus to team trading behavior, and then to the key major address behavior of individual tokens. Through in-depth analysis of these on-chain activities, he continuously improves the accuracy of trading decisions.

Currently, his main holdings include BTC, ETH, and SOL. These assets form the cornerstone of his core investment portfolio. In addition, the recently outstanding Moodeng has become an important milestone for him: achieving a 5000x return in a short period. However, for him, the significance of Moodeng goes beyond just profits.

The true value of Moodeng lies in validating the effectiveness of its data-driven strategy. By tracking the on-chain behavior of Moodeng's main addresses, it confirmed the trading theory of "following the main force." This practical result not only enhances the credibility of its strategy but also provides valuable experiential support for future trading decisions.

Data and Discipline: The Keys to Successful Trading

During the trading process, the trader emphasized the standardized strategy of "doubling the capital and cutting losses in half," which is at the core of their risk management. This strategy avoids market sentiment interference with clear rules and verifies the feasibility of positive expected value (EV) through mathematical models.

In trading, you only need to maintain a win rate of over 33% to achieve positive EV. For example:

• Take profit scenario: Sell all after assets double, achieving 100% return.
• Stop-loss scenario: Sell all after the asset is halved, with a 50% loss.

Based on the above assumptions, when the win rate reaches or exceeds 33%, the trader's long-term returns will show positive growth. This trader's strategy is probability-based, focusing on maintaining a stable mindset and avoiding being swayed by short-term market fluctuations in trading decisions.

At the same time, his team developed a series of data-centric tools to provide users with in-depth insights into market hotspots and major player behaviors:

Token Insider Analysis

Analyze the holding structure and address behavior of tokens through big data. Its core functions include:

• Main Force Behavior Recognition: Filter addresses with transfer associations or collective trading characteristics and classify them as "gang" or "main force cluster".
• Snapshot and Trend Analysis: Qualitative and quantitative assessment of token holding concentration, identifying whether the main forces are accumulating.
• Behavioral model optimization: Combining the transfer behavior of addresses (such as the use of cross-chain bridges or mixers) and on-chain capital flow trends to create precise predictions of major operations.

FOMO Signal

This is a real-time trading signal tool developed based on a database of thousands of smart money addresses accumulated by the team. When a group of historically high-performing addresses collectively buys a certain token in a short period, the FOMO signal will issue an alert. This signal can help users quickly capture market hotspots and assess whether the token has potential for short-term price increases.

These tools provide users with a complete trading support system. For example, when the token insider analysis tool shows that the main accumulation level of a certain token has reached a peak, while the FOMO signals capture the collective buying behavior of several smart money investors, this usually indicates that the token may become a market hotspot. Users can establish positions and track trends based on the data provided by the tools, combining strategies of doubling down and setting stop-losses at halving.

Data Strategy for Capturing Main Force Trends

In the cryptocurrency market, the main players profit through accumulation and distribution, and during this process, the on-chain holding behavior inevitably changes. The core of trading strategy lies in how to capture the behavior patterns of the main players through data. For example, during the accumulation period, the main players will exhibit specific on-chain behaviors that can be aggregated and transformed into trading signals.

However, as more people adopt similar strategies, the main players may adjust their strategies or even hide their behaviors. Therefore, the effectiveness of trading strategies needs to be continuously adjusted and optimized to identify potential hidden behaviors of the main players. This trader believes that this is an ongoing game, and a dynamically optimized monitoring model is key to the long-term effectiveness of the strategy.

His strategy starts by tracking "smart money", which typically achieves over 40% win rates in the market and generates significant profits. By using tools to filter these addresses, he and his team established their own monitoring list to continuously track a group of high-performing address clusters.

The core methods of the strategy include:

• Identifying collective actions: Team monitoring has found that certain address clusters operate in sync, including collective accumulation and distribution behaviors. This pattern becomes the basis for strategies.
• Position Control: When following the main force, avoid entering the top 100 holdings list to maintain a low profile, so as not to affect the main force's operation rhythm. Usually, the buying position does not exceed 0.5% of the market value of the token.
• Signal Response: When clusters in the monitoring list collectively enter a certain token, the strategy follows up with small exploratory amounts to avoid prematurely exposing its own behavior.

Moodeng's Exchange Case

The successful trade of Moodeng is an important milestone for this trader team. In September 2024, the team monitored a long-term high-performing address cluster entering Moodeng on a large scale and quickly accumulated funds. Based on the main force's previous trading methods, the team maintained small purchases and gradually followed up.

During the trading process, the main force tests the market's buying and selling sentiment through multiple rises and pullbacks, while ensuring that the concentration of chips is not diluted. By monitoring the changes in the holding ratios of these main force addresses in real-time, it is discovered that the main force will accumulate again after each pullback. This phenomenon has strengthened the team's bullish confidence in Moodeng.

Ultimately, Moodeng has risen from an initial small market value to a market value of hundreds of millions. The team not only gained substantial profits but also validated the trading theory of "following the main force" through this process.

Grasp the capital rotation in the crypto market

The cyclical changes in the cryptocurrency market have a significant impact on the execution of trading strategies. From a macro perspective, the focus of funds will vary at different periods:

Mainstream Currency Rotation: Funds may concentrate on mainstream assets such as BTC and ETH, during which on-chain liquidity is scarce and trading volume is low.

Emerging Public Chains and Hotspot Switching: Ecological hotspots will switch among public chains, such as the recent shift from ETH to Base, then to BSC and Solana. Solana has become a breeding ground for high-frequency trading and innovative projects due to its high TPS and low Gas fees.

Meme Track and Narrative Shift: In more segmented tracks, such as Meme tokens, funds will also rotate due to updates in the launch pad or changes in the narrative. For example, from the high-frequency PVP market of Solana to new projects on the Base chain, the focus of market funds is constantly shifting.

Using on-chain data tools, this trader's team monitors on-chain trading volume and capital flow in real-time to assist in decision-making. For example, recent capital rotation indicates that the emerging on-chain virtual economy (such as AI Agent, Virtuals) is becoming a hotspot, suggesting that the team needs to adjust their positions in a timely manner to follow the flow of funds.

The Key to Successful Trading: Calmness and Discipline

Bull markets offer plenty of opportunities, but they also come with high risks. In such markets, it is particularly important to maintain calm and discipline:

Independent Judgment: The trader emphasizes that trading should be centered around verifying strategies, rather than catering to market sentiment. He points out that emotional fluctuations in a bull market can easily lead traders to be misled by the "eternal bull market" narrative, resulting in excessive optimism.

Timely Profit Taking: One major pitfall in a bull market is the "reluctance to sell." Even when the market is rising, taking some profits off the table is key to maintaining long-term advantages. Even if you miss out on higher points, managing risk always takes precedence over chasing higher returns.

Support for Stable Cash Flow: Cash flow is the anchor for calm trading. By obtaining stable cash flow through main business operations or quantitative funds, dependence on short-term market fluctuations can be reduced, making trading more composed.

In a bull market, traders often face anxiety, which may include: fear of missing out on opportunities, returns not meeting expectations, and psychological fluctuations caused by short-term pullbacks. In response, this trader also shared his coping strategies:

Focus on Trading Framework: Trading that exceeds the framework, even if profitable, is not considered a success. The core of trading is to validate strategies and refine understanding, rather than temporary gains.

Establish a Calm Communication Environment: Avoid being disturbed by emotional signals and maintain communication with calm and rational trading partners. Especially in a bull market, overheated emotions can easily lead to irrational decisions.

Remember the cyclical nature of the market: He pointed out that bull markets are not "eternal," but rather a cycle where opportunities and risks coexist. Even with strong bullish sentiment, one must remain vigilant about risks, especially when there is only a single narrative in the market without clear supporting logic.

Methods to Quickly Enhance Cognitive Levels

This trader believes that the core of personal growth lies in upgrading one's circle, and communicating with individuals of high cognition can significantly accelerate one's cognitive iteration. He emphasizes that breaking through the social comfort zone and actively interacting with outstanding people is an important way to improve oneself.

In the process of trading and entrepreneurship, he seeks his own breakthrough points by continuously learning from the successful experiences and methods of others. The influence of communication with others is subtle yet profound. The actions and results of successful people around him can inspire him to think and further optimize his own path. He advocates "upward socializing," discovering more possibilities through interactions with more outstanding individuals.

He also mentioned that "Rich Dad Poor Dad" is a book that has had a profound impact on his financial thinking. This book emphasizes the concept of the wealth quadrants and taught him to think about wealth management from the perspective of "making money work for you." He noted that this book breaks the traditional education concept of "stable jobs" and inspired him to explore the possibilities of entrepreneurship and investment.

In addition to books, his progress also benefited from other sources of knowledge. For example:

1. on-chain analysis KOL
2. Social Media and Community: By following active traders, quickly capture market trends and discuss new tracks and business opportunities with team members.

In addition, he believes that the integration of cognition between Web2 and Web3 is an important direction for the future. He and his team often study business cases in Web2, exploring how to replicate their successful models in Web3. This cross-domain thinking allows him to stay ahead in the exploration of new tracks.

Conclusion

Data-Driven and Continuous Optimization: Data-driven trading strategies have been proven feasible in practice, but they require continuous dynamic tuning. Additionally, whether it is the rotation of on-chain hotspots or the switching of narrative tracks, it is necessary to maintain sensitivity and adaptability.

Patience and Discipline: Successful trading relies not only on strategy but also on a stable mindset. Whether in a bull market or a bear market, following trading rules and maintaining independent judgment is essential to gain a long-term advantage.

Establishing a pillar of cognition and cash flow: With a stable cash flow as the foundation, traders can face market fluctuations with a more composed attitude. By "continuously learning" and "upgrading circles," keep yourself at the forefront of knowledge.