Bitcoin Forum
September 17, 2019, 03:26:48 AM *
News: Latest Bitcoin Core release: 0.18.1 [Torrent]
 
   Home   Help Search Login Register More  
Pages: [1] 2 3  All
  Print  
Author Topic: PSA: Pump and Dump - aka, the Newbie Trap.  (Read 592 times)
HodorHodl
Member
**
Offline Offline

Activity: 84
Merit: 58


View Profile
February 03, 2018, 07:44:26 PM
Last edit: February 17, 2018, 05:47:38 PM by HodorHodl
Merited by theymos_away (16), suchmoon (7), Wusolini (5), mprep (3), gentlemand (3), OgNasty (1), odolvlobo (1), vapourminer (1), u9y42 (1), darkangel11 (1), jseverson (1), xianbits (1), Trofo (1), DdmrDdmr (1)
 #1

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.
1568690808
Hero Member
*
Offline Offline

Posts: 1568690808

View Profile Personal Message (Offline)

Ignore
1568690808
Reply with quote  #2

1568690808
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
darkangel11
Legendary
*
Offline Offline

Activity: 1302
Merit: 1057


View Profile
February 03, 2018, 08:16:17 PM
 #2

A good explanation. I hope newbies read it and get the story printed and framed so when someone sends them an invitation they'll take a look at what's hanging on the wall and smile. I hope you didn't lose a lot OP. You paid for the lesson, we're getting it for free. Much appreciated.
HodorHodl
Member
**
Offline Offline

Activity: 84
Merit: 58


View Profile
February 03, 2018, 08:22:38 PM
 #3

A good explanation. I hope newbies read it and get the story printed and framed so when someone sends them an invitation they'll take a look at what's hanging on the wall and smile. I hope you didn't lose a lot OP. You paid for the lesson, we're getting it for free. Much appreciated.

I didn't Smiley It cost me about $8 to learn that, and it was one of the better lessons I had. Thank you for your nice comment!
HTHP
Newbie
*
Offline Offline

Activity: 87
Merit: 0


View Profile
February 03, 2018, 08:25:19 PM
 #4

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

Activity: 163
Merit: 2


View Profile
February 04, 2018, 02:43:06 AM
 #5

The only winner here is the leader of this pump and no one else. Thanks for sharing your story and maybe you will be a reason for learning some other newbies.
HodorHodl
Member
**
Offline Offline

Activity: 84
Merit: 58


View Profile
February 04, 2018, 05:14:28 PM
 #6

The only winner here is the leader of this pump and no one else.

That's exactly it.

There's a new trend now of "community-voted" pump and dumps, and I plan to update the OP when I've finished my notes on this. Also horrific, but better disguised.
Becassine
Full Member
***
Offline Offline

Activity: 546
Merit: 161


View Profile
February 05, 2018, 02:15:26 AM
 #7

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

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.

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.

Really a very very good thread that must be pinned I think.

If you don't get rich with crypto, I'm sure you can with writing because it's very nice to read and, well, I want to explain how it's good written but I'm not an english native speaker and I don't have the good words  Tongue

If one day you write a book or novels like "My experiences in the cryptoworld" I'd like to buy it  Smiley

I'm happy you only lost 8$ and thank you very much for sharing your experience, I did wonder how this sort of groups work. Now I know.

"Sommes nous tous égaux physiquement, intellectuellement, psychologiquement etc. ? Non absolument pas et encore moins entre homme et femme." signé Yaplatu. Bitcointalkeuses, inclinez-vous devant ce génie.
jseverson
Hero Member
*****
Offline Offline

Activity: 1092
Merit: 686


View Profile
February 05, 2018, 02:32:40 AM
 #8

Wow. I've been wondering how these work. It's nice to get insight from someone who's actually participated in one. The idea behind it is simple enough, and very much believable enough for the average person to think it might actually work. Halfway through reading your post, I was thinking, "Hey, this doesn't sound so bad." I wouldn't have gambled away a large amount, but thanks for preventing that loss anyway lol.

It's crazy how easily the market can be manipulated though. It makes you realize that even Bitcoin could be used for such a thing with a big enough group.

odolvlobo
Legendary
*
Offline Offline

Activity: 2618
Merit: 1401



View Profile
February 05, 2018, 07:24:31 AM
 #9

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

It is called a pump-and-dump group, after all. Member of these groups think they are clever, but they don't realize that they are the intended victims.

Buy stuff on Amazon at a discount with bitcoins or convert Amazon points to bitcoins: Purse.io
Join an anti-signature campaign: Click ignore on the members of signature campaigns.
BobbyBG
Newbie
*
Offline Offline

Activity: 12
Merit: 0


View Profile
February 05, 2018, 07:28:34 AM
 #10

All this Pump and Dump are bullshit, not a real market signals, neither a reasonable price movement! Good explanation. I joined such group in telegram just to read it for fun, cant believe how many gets into it
charmedwitch08
Newbie
*
Offline Offline

Activity: 5
Merit: 0


View Profile
February 05, 2018, 01:25:25 PM
 #11

Thank you for sharing your story and this is one of best example for pump and dump.

I know a lot of friends who was trap in a p&D coin. The leader usually let them taste a success then when they invest a lot that's the time they will start losing. I also find it funny how they have to buy and sell at the same time and with your post, now I know why. Anyways, I hope a lot of newbies will read this post.
HodorHodl
Member
**
Offline Offline

Activity: 84
Merit: 58


View Profile
February 07, 2018, 08:50:45 PM
 #12

Updated with this "community-voted" crap.

You still won't win.
Rkoshay
Jr. Member
*
Offline Offline

Activity: 98
Merit: 3


View Profile
February 07, 2018, 09:03:18 PM
 #13

Thank you for the informative and as mentioned the well written article on pumping and dumping.  I've wondered about them, don't like the general idea as I think it's destructive for the crypto currency world in general and your excellent and entertaining article reinforced my assumptions.
wiser
Legendary
*
Offline Offline

Activity: 1722
Merit: 1025



View Profile
February 08, 2018, 05:21:40 AM
 #14

Thank you for the most informative post on pump and dump schemes. This is one particular type of scheme I have simply not encountered before. I'm actually a pretty pathetic trader, so I expect to lose out on these schemes. But I think you're right. They've already bought and you're the sucker they're selling (dumping) to.

If you're looking to make some passive income off coins, you might consider POS coins. POS stands for proof of stake, and that means that the balance you hold in your wallet will create new coins based on rules set up in the coin's code. You don't get protected from the ups and downs in price, but at least you are producing more coins. Pick a good coin to do this with, one that has solid fundamentals. There are lots of options out there, but ones I especially like are DMD Diamond, and in about a month, DNotes. You can also look into SmartCash. They do a form of POS, but it's a bit different in practice.

DNotes Trading Bot - Simple · Affordable · Effective
Automated Bot Trading for Everyone
cryptogirlboss
Newbie
*
Offline Offline

Activity: 113
Merit: 0


View Profile
February 08, 2018, 08:57:07 AM
 #15

Lol thanks for sharing, u're lucky coz I heard many noobs losing much more money, I also got involved initially and once burned, I said myself no more thanks! 😜

gotta be careful out here guys 🤑😩
Trofo
Sr. Member
****
Offline Offline

Activity: 784
Merit: 403


Translating to Croatian


View Profile WWW
February 08, 2018, 10:53:30 AM
Merited by vapourminer (1)
 #16

Really good original post. I hope every newcomer gets to read it before making the mistake.

I will add my experience. I have also tried 3 pump groups knowing in advance that it is rigged against me, but had to try it just to make sure. I made very small deposits to test it. Experience was very similar to yours. Immediately after buying my 3 shit coins dumped at least 10-15%, and during 24 hours more than 50%. Now since it was small amounts I just let it stay in shit coins, and managed to sell all three of them for small profit about 2 months later. This is by no means an advice on what to do, and I would never have done it in that way if i had serious amount of money invested.

If you intend to use pump groups after all that OP has written at least have your stop loss orders set real close Smiley

          ▄▄████▄▄
      ▄▄███▀    ▀███▄▄
   ▄████████▄▄▄▄████████▄
  ▀██████████████████████▀
▐█▄▄ ▀▀████▀    ▀████▀▀ ▄▄██
▐█████▄▄ ▀██▄▄▄▄██▀ ▄▄██▀  █
▐██ ▀████▄▄ ▀██▀ ▄▄████  ▄██
▐██  ███████▄  ▄████████████
▐██  █▌▐█ ▀██  ██████▀  ████
▐██  █▌▐█  ██  █████  ▄█████
 ███▄ ▌▐█  ██  ████████████▀
  ▀▀████▄ ▄██  ██▀  ████▀▀
      ▀▀█████  █  ▄██▀▀
         ▀▀██  ██▀▀
WINDICE████
██
██
██
██
██
██
██
██
██
██
██
██
████
      ▄████████▀
     ▄████████
    ▄███████▀
   ▄███████▀
  ▄█████████████
 ▄████████████▀
▄███████████▀
     █████▀
    ████▀
   ████
  ███▀
 ██▀
█▀

██
██
██
██
██
██
██
██
██
██
██
██
     ▄▄█████▄   ▄▄▄▄
    ██████████▄███████▄
  ▄████████████████████▌
 ████████████████████████
▐████████████████████████▌
 ▀██████████████████████▀
     ▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀
     ▄█     ▄█     ▄█
   ▄██▌   ▄██▌   ▄██▌
   ▀▀▀    ▀▀▀    ▀▀▀
       ▄█     ▄█
     ▄██▌   ▄██▌
     ▀▀▀    ▀▀▀

██
██
██
██
██
██
██
██
██
██
██
██
                   ▄█▄
                 ▄█████▄
                █████████▄
       ▄       ██ ████████▌
     ▄███▄    ▐█▌▐█████████
   ▄███████▄   ██ ▀███████▀
 ▄███████████▄  ▀██▄▄████▀
▐█ ▄███████████    ▀▀▀▀
█ █████████████▌      ▄
█▄▀████████████▌    ▄███▄
▐█▄▀███████████    ▐█▐███▌
 ▀██▄▄▀▀█████▀      ▀█▄█▀
   ▀▀▀███▀▀▀
████
  ██
  ██
  ██
  ██
  ██
  ██
  ██
  ██
  ██
  ██
  ██
  ██
████


▄▄████████▄▄
▄████████████████▄
▄████████████████████▄
███████████████▀▀  █████
████████████▀▀      ██████
▐████████▀▀   ▄▄     ██████▌
▐████▀▀    ▄█▀▀     ███████▌
▐████████ █▀        ███████▌
████████ █ ▄███▄   ███████
████████████████▄▄██████
▀████████████████████▀
▀████████████████▀
▀▀████████▀▀
██████
██████
███
███
███
███
███
███
███
███
███
███
██████
██████
.Play Now.██████
██████
   ███
   ███
   ███
   ███
   ███
   ███
   ███
   ███
   ███
   ███
██████
██████
ferall
Sr. Member
****
Offline Offline

Activity: 672
Merit: 263


View Profile
February 08, 2018, 10:58:43 AM
 #17

Newbies beware.
HodorHodl
Member
**
Offline Offline

Activity: 84
Merit: 58


View Profile
February 12, 2018, 08:47:54 PM
 #18

Good conversation about this going on in Trading.

https://bitcointalk.org/index.php?topic=2614275.20
cerealnac
Newbie
*
Offline Offline

Activity: 27
Merit: 0


View Profile
February 12, 2018, 09:01:17 PM
 #19

Thanks for this info. I can see the appeal to people new to trading that pump and dump schemes offer. But this is harmful to the marketplace. It increases the volatility of price and introduces many scams into the marketplace. This type of behavior is regulated in standard markets, seems like something needs to happen to prevent it in the crypto space.
HodorHodl
Member
**
Offline Offline

Activity: 84
Merit: 58


View Profile
February 12, 2018, 09:11:47 PM
 #20

Thanks for this info. I can see the appeal to people new to trading that pump and dump schemes offer. But this is harmful to the marketplace. It increases the volatility of price and introduces many scams into the marketplace. This type of behavior is regulated in standard markets, seems like something needs to happen to prevent it in the crypto space.

I think it's a long way off before we see any sort of regulation, to be honest. And even if we do, it'll have to be regulation by the crypto-world standards - decentralisation will be a major issue there. We'll have the "Regulate it" versus the "Nobody owns me!" crowd, and it'll descend into nothing.

In the meantime, awareness is a good start, I hope.
Pages: [1] 2 3  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!