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Author Topic: PSA: Pump and Dump - aka, the Newbie Trap.  (Read 552 times)
merchik
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February 12, 2018, 10:17:13 PM
 #21

Thank you a lot for your explanation! Wink
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ico41
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February 13, 2018, 05:11:20 PM
 #22

Great post - I believe this can happen only in markets that are very thinly traded, which are the coins that are the targets of this scheme.  It simply doesn't work with more volume.  So I don't think it's regulation that will solve something like this - it's just best to simply avoid coins that have very little activity. 

I think that there might be room for a longer-term play, however, in that if the project itself is actually legit and has a decent community, it's possible that AFTER the dump, when the coin is at rock-bottom, it might be worth it to pick up some, especially if you yourself will participate in the use of the coin itself, for whatever utilitarian value it may have.

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February 13, 2018, 06:12:20 PM
 #23

Great article indeed.
I also wish I had seen it back in January because I also took part in a pump and dump thinking it is a nice little earner. Turned out to be a real piece of ... well you know!
A very important thing to remember is that you will get the coin that will be pumped at an exact time just like you said, 19:00 CET for example. And now everybody is waiting for it. As soon as the coin is announced people start buying and the exchange freezes. Thats what happened when I did it. The exchange froze because of the traffic and was not responsive for a few seconds. By the time I pressed on buy the price had gone up over 50%.
Once my order was filled the price was down to 20-25% So in just a few seconds the price dropped drastically and it never even reached those 50% or 40% again.

A lesson well learned. This does not work! actually it works really well for the few leaders of the group who dump their cheap coins on everybody else but for you and me this will not work. Its a rigged game and you lost before you could even move your mouse courser to SELL.

I didnt sell the coins i bought in the bump at all. i kept it as part of my portfolio.  Grin It doesnt look like a bad coin and during Jan 2018 had a value of $10+ so maybe it gets halfway back there before I sell it or reaches new highs once the market starts blooming.

 
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February 13, 2018, 08:05:30 PM
 #24

Thanks for sharing your story. You lost some money but you learned a lot.
I hope everyone in this forum will learn from it.

From op story he has really learn a lot and from what he has shared I hope some of us take precautions. Pump and dump group are not were you should begin as a traders or investors but you can only used some of the plan as a guide for investment. Most of them used the group in other to pump a coin and dump it on the head of amatuar traders.
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February 13, 2018, 08:23:59 PM
 #25

Thanks a lot for a great post.
I am new to the crypto..??, haha you call it.

I have seen some pump and dump, but now I understand the basics of it.

It's good that you did not lose a lot.
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February 14, 2018, 03:02:22 AM
 #26

Great information.  Thank you for sharing and glad you didn't lose too much.

Dispatch Labs is a Distributed Ledger Technology Platform for Dapp Developers that is truly scalable, insanely fast with no transaction fees.
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February 16, 2018, 02:58:04 PM
 #27

Thanks for sharing, it was an excellent, highly informative, easy read. I'm glad you didn't lose too much on the way to this lesson, and I also echo many other readers who say you should consider being a writer!  Grin
This topic really deserves to be pinned or at least commented on regularly so it stays somewhere at the top of the Help section - essential reading for everyone, but especially newbies!
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February 16, 2018, 07:35:43 PM
 #28

This is the easiest traps newbies may fall into: pump and dumps. The organizers of this said event in exchanges really make sure that their prospects will take the bait, and the poor newbies unknowingly will buy into their scams while the organizers already have a comfortable position in the market. The massive spike in price is what entice newbies into buying and allotting a part of their bank rolls into some obvious money-grabbing scheme. I myself have been a part of pump and dump groups, and I look to Fontase and other handles as the gods of trading and profit since they gain massive profits in just a short span of time. I profited from there, yes, but sometimes, the masterminds of the said group would willingly dump on his members and play innocent in the end.

Only people who hasn't done enough research joins these kind of groups and schemes. Profits that came off clean is still better than deceiving a lot of people to buy your bags in hopes of them getting some profits in return.

RegUs23
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February 17, 2018, 07:38:55 AM
 #29

It's really trap.

Moreover it could be trap even you didn't spend money to get coins.
I participated in AIGANG bounty and got some AIX. The price of ICO was 0,36$.
On the high the price was 5$. I sold only 1/3 of my AIXs. Now the price is only 0,6$...And I don't know what should I do..
My 2/3 is still approximately 650$, but when I think that it could be more than 5000$.. Undecided  Cry Cry
So it's good lesson for me. Wink
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February 17, 2018, 05:40:11 PM
 #30

Well this is interesting....

http://www.cftc.gov/idc/groups/public/@customerprotection/documents/file/customeradvisory_pumpdump0218.pdf
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February 17, 2018, 07:31:41 PM
 #31

TL;DR - don't. You will get flattened. The game is rigged, and you can't win.

EDIT: Updated to include "community-vote pumps". TL;DR - they're not better. You're still losing.

EDIT2: This is interesting: http://www.cftc.gov/idc/groups/public/@customerprotection/documents/file/customeradvisory_pumpdump0218.pdf

Hi all,

I have been researching crypto, dreaming about these golden lambos, and probably feeling a little bit of FOMO (Fear Of Missing Out). I wasn't an early-adopter, so I don't have old wallets full of bitcoins, eth or other stuff to play with. I'm entering the markets in January 2018, wondering how I can catch up with the old school, and have some of this magical internet wealth. I'm using my own money, and I'm not in a position to put in much of it, so what I want to see is growth, and I want that growth to be what crypto is famous for - explosive, ridiculous.....free money, right?

It didn't take much time before my reading lead me to the idea of a Pump and Dump. Simple concept, really. A bunch of people get together, pool their buying power, and use it to create a huge upswing in the market. Then once the price has moved up as a result of their purchasing drive, they sell at the higher price, earning awesome paybacks. 50%+ profit is not uncommon to hear about.

How could I resist? I googled it, and immediately joined one of the largest groups for this (42,000 members), whose name I will not post here.I was added to discord and telegram for the group, and was encouraged by the invite-bot to read the rules of the operation, and the schedule, as well as the advantages of the member ranks.

The rules told me to:
1 - Buy at market as soon as I saw the signal, to get in at a good price ASAP
2 - Not to sell until I saw the dump start
3 - Not to whine if I lost money because I was too slow

The schedule told me the exchange (so I could make an account - referral link provided, naturally), and the pairing - i.e. against BTC, ETH, whatever (it's usually one of these two). It did not tell me the coin. This will become important in a few moments.

The member ranking told me that in order to rank up, I'd need to publicise the group, and invite people to join, with these benefits:

1 invite - @Member rank (No time advantage, ability to talk in the chat.)
4 invites - @Representative  (0.5 sec earlier)
10 invites - @Associate (1 sec earlier)
25 invites - @Partner (1.5 sec earlier)
50 invites - @Minister (2 sec earlier)
150 invites - @Ambassador (3 sec earlier)
500 invites - @Top Promoter (3.5 sec earlier)

I took one look at that, and decided it was irrelevant. 3.5 seconds? Yeah, right, I'm quick. I have the golden fingers of a born gunslinger. Right? Member rank would suit me just fine.

I carefully checked the time of the signal - 8 PM EST, which was also 8 PM my time, and it would be on Binance, using an ETH pairing. I freed up all my Eth, taking a couple of small losses on trades to do so. Confident I'd get that back with a cherry on top. Ate early, got some beers to keep beside the computer, and settled in to wait.

January 31st, 20:00:00 - announcement is posted. The coin is MDA.

What the hell is MDA, you ask? I can't answer, because I don't know either. Nor did I care, because I wanted free money. I typed it pretty damn quick though, you can be sure, and hit that buy button as fast as my little digits would react.

And the candlesticks went MAD. Up, up, up, up, up - I've never seen so much green. I hadn't even had time to get the top off a beer, and here I was, already a trazillionaire. But wait, I need to sell now, right?

Here's how I fared out:

Investment: 0.085 Ethereum
Signal: 20:00:00
Bought: I swear this was 20:00:00:00:00:00:01 but maybe not.....price: 00195000 per coin
Time passed: 5 seconds
What happened: Market went insane - green green green
Sold at top of green candles, I *KNOW* I did...didn't I? Price: 00179880 per coin

Hmm....loss 7.75%.

How'd that happen? Well, as follows, and this is why these just don't work:

1 - Coin selection - this is selected by the leader of the group, and you don't seriously think that this is done 2 minutes before the pump, do you? Nope, the leaders will have been slowly buying up MASSIVE volume of this coin, in a way that didn't upset any volume alerts, over weeks. And now they own a shitload of it, all of which was bought at rock-bottom in a dead market.

When you are pressing "buy", they are pressing "sell" - YOU are paying them.

2 - Time - You see, despite the seriously good tech used in (some/many/most/few) exchanges, they're not actually reporting data accurate to like one second. There's a delay, and this is very important! The candlesticks you see are not representing the buy and sell orders in place IN THAT SECOND. But you're sitting there with your finger on the trigger watching the light show, and you do what I did....hit "Market sell". Mistake.

And then you find out how well you did. Grab a tissue.

UPDATE: Member voted pumps...lol

People are getting wise to this now, and I've noticed that some of the newer big groups (30K+ members) are offering "member-voted pumps".

Seems legit, right? I mean, if you're voting, they CAN'T POSSIBLY have this figured out in advance. Even playing field. Lambos at the goalpost.

Except....

They're doing it via a poll. Set choices. You vote on one of 3, or 6, or whatever. They are picking them for you. And holding massive bags of all of the dump coins.

If they miss a few polls in a row, they're OK with this - you get a telegram saying "Due to market conditions, today's dump has been picked by the admins". They're not wise, they're overloaded with some shite that didn't get votes recently Smiley

Again....When you are pressing "buy", they are pressing "sell" - YOU are paying them.

80-90% of people lose money in Pump and Dumps. Some will make money, sure. The leaders who had time to acculumulate the coins YOU were about to buy, and maybe some clever bunnies with bots faster than my fingers.

The victims are generally the group helping to pump, and some poor clowns who saw the price go ballistic and bought in out of sheer "Can't let this pass" panic. Once the dump happens (i.e. well before you knew it was happening), these people are already holding a bag of crap. PnD groups pick dead coins, with no future and no trade for this, so you can't even console yourself that you might get out in 6 months when it explodes. You won't.

I hope this (much longer than I intended) post helps you all. The moral of the story....if it's too good to be true, it's not true. Also, if you can't spot the dummy in the game, it's you.

H.

The best way to stay away from this type of traps it's to stay away from daytrading and to actually hold your coins for the long term profits, which can prove to be much more profitable than just chasing some little profits when the market is volatile. If you know what you are doing fine but if you are a newbie, hold long term, you will be invulnerable to this type of market traps.
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February 22, 2018, 12:05:18 PM
 #32

Great post.

There always will be liquidity problem with those not popular coins.
Pump and dump is the way of getting liquidity to the market to get rid of those coins.

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February 22, 2018, 01:40:34 PM
 #33

I looked at these pump and dumps last year but could not for the life of me get myself to try it. I mean that's really just too good to be true. I am not a gambler.. But yes I can understand how they suck people in to that. Very interesting post, Thank you
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February 22, 2018, 03:07:17 PM
 #34

This is the best thread I've read since I joined the forum! So much thanks for the advice, If I'm the merit giver I would like to give a merit to you. I want to read threads like this. Thanks for sharing your experience!  Cheesy
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February 22, 2018, 03:29:58 PM
 #35

So impressive to read this OP made by a Jr. I feel relieved from so many posts with nonsense content.
AngryToken
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February 22, 2018, 03:55:07 PM
 #36

Thanks for sharing your story and the helpful information!
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February 22, 2018, 05:49:33 PM
 #37

Thanks for sharing that with us newbies. Happened to me in a XZC pump. Lost $20 on that but hell I am still hodl because you never know.
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February 23, 2018, 02:23:57 AM
 #38

From what i hear, if you can figure out some sort of pattern to know which coins are more likely to be pumped and dumped, you can take advantage ahead of time.

For example:
- you identify a coin that gets pumped and dumped from time to time (over the course of months)
- you invest in that coin ahead of time leaving it on the exchange
- you put in a sell order 5x to 10x the buy price

You wait and check your sell order from time to time to see if the coin got pumped.
You basically have to treat your money as lost and come back to a potential 5x to 10x return.

Anybody have experience doing this with success ?
HodorHodl
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March 10, 2018, 07:02:08 PM
 #39

From what i hear, if you can figure out some sort of pattern to know which coins are more likely to be pumped and dumped, you can take advantage ahead of time.

For example:
- you identify a coin that gets pumped and dumped from time to time (over the course of months)
- you invest in that coin ahead of time leaving it on the exchange
- you put in a sell order 5x to 10x the buy price

You wait and check your sell order from time to time to see if the coin got pumped.
You basically have to treat your money as lost and come back to a potential 5x to 10x return.

Anybody have experience doing this with success ?

There are possibly ways to make that work. But you'd need to have some sort of inside view on what the PnD groups are picking, and would have to be OK with parking money on the gamble that they might never hit it.

You'd never get 5x or 10x off a PnD anyhow, tbh - more along the lines of 0-50%. (or a minus, as most get heh).
HodorHodl
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March 26, 2018, 07:16:54 PM
 #40

Was messing around with google analytics. Seems with recent price declines, the fervour of January has worn off slightly Smiley

Surprisingly low number of searches though!

https://trends.google.com/trends/explore?q=%2Fm%2F01j8p9
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