Direction is the hard part and it is not the part that produces the worst outcomes. These are the checks that address everything else, in the order that matters.
1. Is this the token you think it is?
Verify the contract address against the project’s own published source, character by character. A ticker is a self-declared string and collisions are routine — the whole argument in a ticker is not a token. A chart with the right ticker is not evidence.
2. Can you sell it?
Some contracts permit buying and restrict selling, by design or by compliance function — honeypots and unsellable tokens. No liquidity metric detects this, because every liquidity metric measures the pool and the restriction is in the token.
3. What does the exit cost at your size?
Not the entry — the exit, at the size you intend, against current depth. That is price impact, it is calculable before trading, and it is frequently larger than the move being targeted.
4. Is the depth arriving or leaving?
A snapshot cannot say. Liquidity added or pulled requires history, and a pool draining while you enter means your exit is worse than your entry by construction.
5. How concentrated is it?
Holder concentration is a risk measure rather than a signal. It does not say the token will fall; it says how much could arrive at once if it does.
6. Which pool, and against what?
Depth against a volatile or thin quote asset is not equivalent to depth against a dollar — what the quote asset tells you — and a token whose only real depth is against another thin token has an exit two problems long.
The point of the list
Every item is answerable before committing money, and none requires a view. Getting direction wrong costs you a trade; getting these wrong costs you the position.