How Pump and Dump works ?
Pump and Dump (PND or P&D) is a famous term in trading specially crypto trading. Where some big traders started boosting a non-famous low value coin all of sudden and that will show in list coin list as high rise in price. Once public started buying it thinking it is going to be another big coin , they dump their coins getting 100-200% of profit. Majority of trade analyst saying it ” Scam “. Because they are manipulating the coin with their money and without any authentic or relevant update.
There are many P & D groups are circulating in Social networkings, Specially Telegram. One of the famous is Wallstreet Pump & Dump group.
HOW THEY WORK ?
They are making groups with some very close friends who collect some amount to pump a coin. Before doing that they just make HYIP in their social networking groups without informing the coin name to group members. Just giving them hint for example : Our next pump coin will be in trade pair with bitcoin. So if you go and see trade site there are thousand of coins with bitcoin trade pair.
Without giving them coin name , they just make HYIP every 1-2 hours to make members motivated to jump on the coin when annouced. But in background , they purchase the coin which they want to pump in partial buying process. Like 10% at 11:00 , then 15% at 13:00 and so on. So this much jump in coin due to thousands in list will not come in notice.
Before annoucing the coin name , they just increase frequency of messages to make members alerted with their coin to buy the coin which will annouced.
Finally they give coin name , which they set for dump. ( Bcoz they already hold that coin by partial buying ). Once innocent greedy members of those P & D group started buying the coin which was already 100-200% above the normal price. Those dump comes on their head. Which means members buy the coin and these 5-10 friends who own this P & D group will dump their coin on members head actually.
HOW TO KNOW IF COIN IS PUMP & DUMP ?
This is very simple to understand if coin is under P & D or not. First check Coin name and search that coin name in Coinmarketcap.com , If coin was pumped its graph will show all of sudden a hump which means it was pumped and not a similar pattern in graph. If coin is new there is possibility of sudden boom due to initial low price.
And its stats will show like this
So be aware of such thing and use your own knowledge to understand not got trapped in that such coin otherwise its not possible to get back your hard earned money from that useless coin ever.
If a coin is technically sound and in its initial stage , then possible after 3-4 month it can reach that much price by stability.
Understand Pump & Dump with in trade graph
DYOR – Do Your Own Research
I hope this post will become helpful to many of our reader.
*** TIPS FOR NEW TRADERS ***
Coin usually got its price increase when these situations matched.
- When developer team made any new update
- When coin technology got any venture with other technology
- When coin technology got new fund from sources
- When new trade introduce it