Meme stocks are characterized by high volatility and short-lived popularity, mainly fuelled by social media platforms. The focus is generally on heavily shorted stocks (stocks that short sellers bet on going down in price) that groups of retail investors decide to back in buying campaigns. Their goal is to force short sellers to close out their positions by buying shares of stock and thus pushing up the stock price. 

When a stock has a lot of short interest (investors take short positions to benefit from that company’s likely downturn), there is potential for a short squeeze. This happens when some sudden good news about the company's prospects or just momentum created on purpose by a group of investors (as in the case of meme stocks) reverses the trend of the stock price, which pushes short sellers to close their position. They do that by purchasing shares from the market, all rushing to buy at the same time to cut their losses as much as possible, which pushes the stock price even higher, which in turn attracts more buyers. 

There are a few patterns to look for when trying to find the next big meme stocks. Meme stocks commonly share the fact that they are heavily shorted. Oftentimes, stocks are skewed towards shorting when the company is believed to have no positive financial future. It’s these stocks that hedge funds short as a near guarantee for positive returns, and so they are potential targets for retail investors to try to push into a short squeeze through buying campaigns.

You can easily build your own watchlist to track a custom list of meme stocks you're interested in.

It might be a good idea to follow a meme stock watchlist and keep an eye out for the top movers. When trading meme stocks, make sure you set both stop-loss and take-profit targets to minimize your risk in highly volatile market conditions. A stop-loss aims to ensure you don't lose more money than you are comfortable with, while a take-profit automatically sells the stock you're holding when the price hits a target you set.