Key is to find a pool with a high Yield/TVL (24h)
Why? The higher the Yield/TVL (24h), the faster we're in profit and can exit (or take profits)
Anything above 1% is really good. These are mostly high Mcap memecoins like Fartcoin, Popcat, and Pengu
Your chosen direction decides about W or L
Compared to other LP providers you can go short, neutral or long on DeFi Tuna which could give you an edge
But if you choose the wrong direction you also end up with a bigger loss. Anyways you don't need to be an expert
I can't predict the market with 100% accuracy, but I follow strict rules
Don't go long if a token has pumped >20% in a few days (see below)
Big Mcap coins often move with SOL (just more volatile)
Generally, you're best off with a neutral position, as price fluctuations often bring it back to the middle
If you find an interesting pool, check the chart on Dexscreener (X/SOL) and search for VPVR, which shows where most volume occurs
This is the chart of PENGU, which is pure sex for LP!
Three weeks within the same range, with most volume in the middle
Anyhow, since Fartcoin has a much higher Yield/TVL (24h), we will check the chart of Fartcoin
For Fartcoin, it looks similar. It had a small dip a week ago but stayed in the same range for weeks apart from that
Get the range and go to DeFi Tuna
This range would provide us with a 6.39% yield in 24 hours (with 3x leverage)
The last step before opening the position is to set the various parameters
Deposit collateral
Choose leverage: The more leverage the more profit if you're in range but also more loss if you reach limit orders quickly)
Borrow ratio: As mentioned above I often go for neutral position
Set limit orders to range bounds.
The PnL simulator demonstrates your potential PnL if the price immediately hits the limit order. Typically, this ranges from 7-9%, but it won't occur frequently.
Also, remember to switch on auto-compounding to initiate this flywheel.
Again, you can't always be right, but the key is to stick to your rule! Mine is:
Take a stop-loss at -10%
Try to make 5%-10% yield per day
Evaluate the situation every day
After a few days in range, you will see that your position is becoming a flywheel with the compounded yield.
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