On-chain Data-Driven Trading: The Transformation from Newbie to Expert

Satoshi is a pioneer in the on-chain data-driven trading field. He entered the cryptocurrency industry in 2017 and joined the listing department of a certain exchange in 2019, focusing on on-chain data analysis and project due diligence. This experience laid a solid foundation for his deep industry insight and data analysis skills.

In 2022, he left the exchange to start his own business. Initially focused on NFT project development, but with market changes, he keenly shifted to Memecoin trading and data-driven investment. He and his team developed various analytical tools and trading bots to monitor on-chain address movements and generate trading signals.

The trading strategy of Sabi Ge is characterized by its distinct features: it does not focus on narrative valuations but rather on on-chain monitoring and strict take-profit and stop-loss rules. He emphasizes that a clear take-profit and stop-loss strategy can help trading avoid interference from subjective emotions.

He pointed out that trading logic needs continuous optimization. From focusing on the behavior of smart money on-chain, to the team's trading behavior, and then to the key addresses of individual tokens, he continuously improves the accuracy of trading decisions through in-depth analysis of these on-chain activities.

Currently, the main holdings of the "Sabi Ge" include BTC, ETH, and SOL. The recently outstanding MOODENG project has become an important milestone for him, achieving a 5000-fold return in a short period. For "Sabi Ge", the significance of MOODENG lies not only in the profits but also in validating the effectiveness of his data-driven strategy.

Data and Discipline: The Key to Successful Trading

Satoshi emphasized the standardized strategy of "doubling out of the principal and halving to stop loss" as the core of risk management. This strategy avoids market sentiment interference through clear rules and has been validated by mathematical models for its feasibility of positive expected value.

As long as you maintain a win rate of over 33%, you can achieve positive EV. For example:

• Stop Loss: Sell all assets after doubling, achieving 100% profit.
• Stop Loss: Sell all assets after a 50% drop, losing 50%.

When the win rate reaches or exceeds 33%, traders' long-term returns show positive growth. This probability-based strategy emphasizes maintaining a stable mindset and avoiding decision-making wavering due to short-term market fluctuations.

At the same time, the Sabi Brother team has developed a series of tools centered around data, providing users with deep insights into market trends and major player behaviors:

Token Insider Analysis

Analyze token holding structures and address behaviors through big data. Core functions include:

• Major Player Behavior Identification: Filter addresses with transfer associations or collective trading characteristics, categorized as "gang" or "main force cluster".
• Snapshot and Trend Analysis: Qualitative and quantitative assessment of token holding concentration to identify whether the main force is accumulating positions.
• Behavior Model Optimization: Combining address transfer behavior and on-chain capital flow trends to form precise predictions of major operations.

FOMO CALL signal

A real-time trading signal tool developed based on thousands of smart money address databases accumulated by the team. When a group of historically successful addresses collectively buys a certain token within a short period in the market, a signal will be issued. This helps users quickly capture market hotspots and assess the potential short-term upside of the token.

These tools provide users with a complete trading support system. For example, when the token insider analysis shows that a token's main force has reached a high level of accumulation, and FOMO CALL captures multiple smart money collectively buying in, this often indicates that the token may become a market hotspot. Users can establish positions and track trends based on the data provided by the tools, combined with the strategies of doubling down on their investment and setting stop-loss at half.

The Data Approach to Capturing Main Force Trends

In the cryptocurrency market, the main players profit through accumulation and distribution, and during this process, on-chain holding behavior will inevitably change. The core of the trading strategy lies in how to capture the main players' behavior patterns through data. For example, during the accumulation period, the main players will exhibit specific on-chain behaviors, which 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 the possible hidden behaviors of the main players. This is an ongoing game, and a dynamically optimized monitoring model is key to the long-term effectiveness of the strategy.

The strategy of the "Satoshi Coin Guy" starts with tracking "smart money," which typically achieves a win rate of over 40% in the market and realizes significant profits. By filtering out these addresses using tools, he and his team established their own DAO and monitoring list, continuously monitoring a group of high-performing address clusters.

The core methods of the strategy include:

• Identify collective actions: Monitor to find that certain address clusters operate synchronously, including collective accumulation and distribution activities.
• Position Control: When following the main force, avoid entering the top 100 holdings list, and remain low-key to avoid affecting the main force's trading rhythm. Usually, the buying position does not exceed 0.5% of the token's market value.
• Signal response: When clusters in the monitoring list show a collective entry into a certain token, follow up with small exploratory transactions to avoid prematurely exposing one's actions.

MOODENG trading case

In September 2024, the team monitored a large-scale entry of a long-term high-performing address cluster into MOODENG and quickly accumulated. Based on the main players' past trading methods, the team maintained small purchases and gradually followed up.

During the transaction process, the main players test the market buying and selling sentiment through multiple upward pulls and pullbacks, while ensuring that the concentration of chips is not diluted. The Coin Seller monitors the changes in the holding ratios of these main player addresses in real time and finds that the main players will accumulate again after each pullback. This phenomenon has strengthened the team's bullish confidence in MOODENG.

Finally, MOODENG has risen from a small market capitalization to hundreds of millions, and the team not only gained substantial profits but also validated the trading theory of "following the main forces" through this process.

Seizing Opportunities in the Rotation of Capital in the Cryptocurrency Market

The cyclical changes in the cryptocurrency market significantly affect the execution of trading strategies. From a macro perspective, the focus of funds may vary at different times:

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

Emerging Public Chains and Hotspot Switching: Ecological hotspots will switch between public chains, such as the recent transition from ETH to Base, BSC, and then to 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 niche tracks like Meme tokens, funding can also rotate due to launchpad updates or narrative changes. For example, from the Solana high-frequency PVP market to new projects on the Base chain, the market's focus of funds is constantly shifting.

By using on-chain data tools like Dune, the Sabi Brother team monitors on-chain trading volume and capital flow in real-time to assist in decision-making. For example, recent capital rotation indicates that emerging on-chain virtual economies (such as AI Agent and Virtuals) have become hotspots, suggesting that the team needs to adjust positions in a timely manner to follow the capital trends.

Calmness and Discipline: The Deciding Factors of Trading Success and Failure

A bull market provides many opportunities, but also comes with high risks. It is especially important to stay calm and disciplined:

Independent Judgment: Trading should be centered around validating strategies rather than catering to market sentiment. In a bull market, emotional fluctuations can easily lead traders to be misled by the "eternal bull market" narrative, resulting in excessive optimism.

Timely Profit Taking: A major trap in a bull market is "reluctance to sell." Even when the market rises, taking partial profits is key to maintaining a long-term advantage. Controlling risk always takes precedence over chasing higher returns.

Stable Cash Flow Support: Cash flow is the anchor for calm trading. Obtaining stable cash flow through core business or quantitative funds can reduce reliance on short-term market fluctuations, making trading more composed.

In a bull market, traders often face anxiety, including fear of missing out on opportunities, not meeting expected returns, and psychological fluctuations caused by short-term pullbacks. Coping strategies include:

Focus on Trading Framework: Trades that exceed the framework, even if profitable, are not considered successful. The core of trading is to validate strategies and refine understanding, rather than short-term gains.

Establish a Calm Communication Environment: Avoid being influenced by emotional signals and maintain communication with calm and rational trading partners. In a bull market, excessive enthusiasm can easily lead to irrational decisions.

Remember the market cyclical nature: A bull market is not "eternal," but a cycle where opportunities and risks coexist. Even with strong bullish sentiment, one must remain vigilant about risks, especially when only a single narrative appears in the market without clear supporting logic.

Ways to Quickly Enhance Cognitive Level

The core of personal growth lies in upgrading one's circle. Communicating with high-cognition individuals can significantly accelerate one's cognitive iteration. Breaking through the social comfort zone and proactively interacting with outstanding individuals is an important way to improve oneself.

In the process of trading and entrepreneurship, by continuously learning from the successful experiences and methods of others, one can find their own breakthrough points. The actions and results of successful people around can inspire self-reflection and further optimize one's own path. "Upward socializing" allows for interaction with more outstanding individuals to discover more possibilities.

"Rich Dad Poor Dad" is a book that has a profound impact on financial thinking. It emphasizes the concept of the four quadrants of wealth and teaches how to think about wealth management from the perspective of "making money work for you." This book breaks the traditional education notion of "stable job" and inspires exploration of entrepreneurship and investment possibilities.

Other sources of knowledge besides books are also very important:

1. on-chain analysis KOL: Provides in-depth market insights and analysis of major player behavior logic.

2. Social Media and Community: Follow active traders, quickly capture market trends, and discuss new tracks and business opportunities with team members.

The integration of cognition between Web2 and Web3 is an important direction for the future. Study Web2 business cases and explore how to replicate successful models in Web3. This cross-domain thinking allows for maintaining an advantage in exploring new tracks.

Summary and Suggestions

Data-Driven and Continuous Optimization: Data-driven trading strategies have been proven viable in practice, but require continuous dynamic tuning. Sensitivity and adaptability are essential for on-chain hot topic rotation and narrative switching.

Patience and Discipline: Successful trading relies not only on strategy but also on maintaining a stable mindset. Regardless of bull or bear markets, following trading rules and maintaining independent judgment are essential for gaining a long-term advantage.

Establishing a pillar of cognition and cash flow: Stable cash flow as a foundation allows traders to face market fluctuations more calmly. By "continuous learning" and "circle upgrading," always stay at the forefront of knowledge.