As we covered in part 1, pump and dump groups are becoming all the rage these days despite their dubious nature. The group I have been covering, "Mega Pump", is preparing to celebrate 50,000 Discord members. As these groups get larger, their ability to move the market grows.
I have been observing the operations of these groups, in particular "Mega Pump." Let's take a look at what they were able to accomplish in the last two weeks.
Mega Pump has their "best", ie largest volume, pumps on weekends around 1pm EST. They've determined they get the highest participation and market movement by moving at this time. Though they also operate on weekdays, they tend to do their largest, unranked (all members receive signal at same time) pumps at the times.
For their part, Mega Pump encourage you to use Telegram in addition to Discord as Discord can have a 1 second latency (or longer, sometimes.) This is a very material delay, as we'll see momentarily. They also suggest you have your exchange interface open and ready to go, which is typically Binance, and they provide entry points. Exit points are a little more nebulous and usually consist of trying to cajole members to hold long enough to get trend-hoppers from the open market jumping in to hold the bag at the end.
At the appointed time, a signal will go out that looks like this:
The result is a 1-5 minute candle that looks something like this:
I sat in and watched the chart above live, in real-time. The results were far less promising for traders than it might appear.
To observe these pumps, I instituted best low latency practices throughout the house - top tier internet speed, fresh reboot, clean browser tabs, router restart, hard-wired, no other users on network. I'm not running a high-frequency-trading operation here or anything, but I do know what I'm doing at the client level. In other words, I would have been unlikely to do much better on timing without moving closer to a major internet hub, such as NYC.
I was able to view the Telegram and Discord each on separate screens while I kept Binance open and ready on a third. In the case of the first pump on EVX, the call went out exactly at 1pm as described. Several minutes before the call, I had prices at 21,500 Satoshis on my chart. It took me approximately 1.5 seconds to get the EVX pair clicked and then have the data load once the call went out. By that time, price was already at 28,500 Satoshis and flying fast. Within a minute or two, price had peaked for a few seconds at 32900 Satoshi and then crashed rapidly all the way to 19,100 Satoshi.
A similar trade on the same coin the next day resulted in a very similar scenario with a lower peak and similar returns losses.
In most pumps, these are simply buying and selling operations. However, these groups are certainly not above spreading misinformation on social media. Check out the more detailed instructions on this BNT pump:
It's pretty clear from the above that anyone that is not a professional trader with, at bare minimum, a dedicated fiber optic line is not able to profit from these types of trades.
However, even if one is set up to do so, one has to assume these groups are always front-running their own calls by a few seconds. The enormous temptation to put in your order early if you have advanced knowledge is probably irresistible for most. Indeed, after observing these in real time, it's my opinion that they are either heavily bot infested with high-speed traders, or they are front-run directly by group operators or information leaks.
One key thing to note when reviewing these groups efficacy is you cannot do so unless you are watching the operation in real time. If you simply looked at the chart of EVX above, you'd conclude this operation was a huge success and everyone made fat stacks. My guess is more traders lost than won, and the bulk of the "winners" had either leaked or inside information.
It also appears as if these pump operations are getting less profitable over time.
In light of these results, the group appears to be making an attempt to also hand-pick coins worth holding for price appreciation, so as to minimize bagholders:
Below, I'm going to re-paste a series of links to the various Pump groups I've been invited to. I'm going to be very clear here and say I DO NOT ENDORSE ANY OF THESE GROUPS. All warnings from the previous post apply.
- First, the group noted in my expose above, "Mega Pump".
- Second is "International Pump Industries"
- Third is "Fair Organized Pumps".
- Fourth is "Fair Pumps". I'm noticing a trend of overcompensation here.
- Fifth, we have "Ultimate Unranked Pumps"
- Finally, we have "MEGA Daily Pumps"
AGAIN, THESE LINKS ARE ONLY SUGGESTED FOR OBSERVATION/CURIOUSITY. TRADE AT YOUR OWN RISK. I DO NOT SUGGEST TRADING PUMPS (in case you missed the entire body of this post somehow).
We also have a Radio Station! (click me)
...and a 5000+ active user Discord Chat Server! (click me)
Sources: Google
Copyright: ClayTrader.com, Discord
Its sad to see pump and dump groups exploiting crypto market. It results in new users getting ripped off which eventually causes harm to entire crypto community.
No thanks, I'd rather be poor than profit from stealing from others...
I read your post yesterday and now this one. I will not be participating in the idea since already know I would be a big loser.
I have been doing some sbd transfers out of here lately and go through ltc to do it since they have cheap fees. I do not care how great ltc is doing - whenever I transfer - that's when the price drops a bit before I get it out and turned into Thai Baht. Even with tiny amounts, this is stressful for me. I'm sure playing the pump and dump game would give even more stress.
I'm pretty sure I saw a post about this topic related to steemit money a few weeks ago. I remember a big spike like this in the chart in the post I was looking at. So I guess it goes on here as well. Yet something else I do not understand at steemit :)
"I do not care how great ltc is doing - whenever I transfer - that's when the price drops"
I am also afflicted with this curse. I think we can file it under "Murphy's Law For Exchanging Currencies."
"related to steemit money"
If you mean SBDs, then it may have been due to a spike in Korean Won (speculative) demand. This is a situation that is still ongoing and somewhat concerning. I may write about it soon.
It is a scam
Very interesting post and thank you for giving the inside information so we can get an acutal view of what is happening and how. I agree with you that these operations are almost always about the group itself being set up to get in and out quicker or ahead of everyone else. In other words, it is just a business for them to make quick money on the gullibulity of others. what always happen is that they gt really greedy or desperate and makes bigger claims and then someone really gets hurt. Regulation will come in but hopefully before things get too out of hand. Thanks again for your hard work and hopefully people will hear you and steer away.
Thank you for the comment. It seems very difficult to setup a group of this type where it is not mostly the insiders who profit. The temptation is too great. Regardless of any guarantees they give, I'd assume there is always insider knowledge.
Hey @lexiconical , this is great post thanks for the update and bringing awareness to this community. I will like to add a quote which may be helpful to many bloggers on this platform;
Why You Should Upvote Comments!!!!
I've noticed alot of people doesnt reward their followers, and their commenters on here.
It's a shame.
When someone takes the time to not only read your post but to leave a comment. Even throwing your small vote their way does a lot of great things...
They are More Likely To Follow You;
I'm not saying you should upvote every single comment you get. I try and look for those that I feel provide value to the post. When they see that you upvoted their comment and they will be rewarded as a result. This encourages them to follow you; Then you'll have a regular on your post!
You can grow your followers so that they can grow you;
If they choose to keep their Steem in their account, They may power it up. If you continuously are upvoting their great comments, then they will steadily grow overtime. Their vote will be worth even more, and they'll be able to upvote you, The upvotes you gave them helps them grow, so they have more power on the platform.
I completely agree with you @gangas.
These are great points. I'm a huge fan of voting for your commenters, I've always made them a priority.
Pump and dump is illegal market manipulation and at its core an ordinary theft. If it was up to me they should throw these crypto pump and dump scammers in jail and take all their money. And, surprise surprise, they actually do that. Participate at your own perril. The blockchain never forgets, and neither does the US government.
For more info, look into the Brit Navinder Singh Sarao, who was caught by the US government 5 years after his market manipulation. Or watch the Wolf of Wall street, who was basically doing the same thing.
Good warnings. Whether this is already illegal or not depends on your jurisdiction and their classification of cryptos, but it's not a good idea to tangle with it regardless.
I don't know the exact regulations with new assets like crypto. It could be that pump and dump schemes are always illegal. I believe the Bitconnect people will likely end up in jail for running a Ponzi, even though it was in unregulated crypto.
With respect to jurisdiction, that does not really apply here because some of the pump and dump victims were likely from the US, and that would make a pump and dumpers actions a crime on US citizens. Someone may not get arrested in their home country but would when entering the US. In an extreme case, the US might even petition an extradition.
Honestly, when i first came into crypto world, i was excited about this pump and dump groups, i thought that i will earn lots of money just on buying and selling when its pumped. But you and i both know who will earn and who will lose big time -.- I'm so out of this kind of things for good.
Thanks for the article tho, it explains it all.
I'm glad I could shine a light. Thanks for the honesty. Ultimately, this is a bad gamble, legality aside.
you need to have inside knowledge of which coin the group is going to pump and buy loads of that coin before the pump, and most people do not get this information like less then 30sec or less before the pump, so most people will end up holding the bag once the people on the inside sell their coins for a huge profit,, most pump and dump only last a few mins or less... you have to be very lucky to make good money from this.. just becareful so you are not the people holding your expensive coins in the end once they have gone down in value again.. most pump and dumps are with shit coins.
They may have to change tactics soon, as your observations seem correct.
Relevant image:
Hodl
This is a quality write up, the SEC may call you to do a write up and analysis with recommendation moving forward..
Hah, well, despite having not traded with any of these pumps, I'll probably reply something along these lines:
Great read, I have always wondered how the pump and dump groups do it and what are the resluts because I have heard about them but never entered one of those or read about it as the whole idea sounded way to sketchy.
Suffice it to say, it's not profitable for the vast majority, only the insiders! Glad you found it interesting.
Probably only for the owners of such groups who dump first IMO.
I have never joined any group on discord and your post gonna motivate me to look into it. How it works!!
It's just a chat client. Once you install it, joining channels is one-click, no registration. Very easy, no security risk really either. It's a great alternative to Steemit.Chat, much more fully featured.
that time travel guy said good things about Bitcoin, We are more than safe
Hah, very funny!
He's referencing the reddit post "I come from the future, please stop what you are doing"
Thanks for educating us towards this pump and dump situation and in my opinion also the pump and dump situation is really manipulating the prices, this means that few people are influencing the market and which inturn leads to the baised nature of market. Let's hope for the best in future. 🙂
Stay Blessed.
I would assume with the recent statements from the SEC that many pump and dump organizers are trying to cover their tracks and liquidate their holdings.
I started follow you right now and I will be voting and commenting on your posts always. Please feel free to check out some of my recent posts.
Thank you!
very nice post it's very important for us
this is so fucking shit ! only groupe owner earned profit and all others members got loss! avoid to become a part of this shit
That would appear to more or less be the case.
Theses are really interesting views to how people should analyse what goes on in the market and I think you let is in on some secrets. Really impressive
going to follow you on discord app, great post keep up
Hi this is very important information
I really appreciate that you explain in detail how pump and dumps work. To many people are clueless and end up manipulated by these get rich quick schemes.
yeah i hate when that happens, i just sit back like dang
Pump and dumps are really bad. Someone is always cheated out of money. Play the market with integrity.
thank you for great post!
Very good!!
Follows some analysis Verge and Ripple:
https://steemit.com/bitcoin/@analysisman/analysis-verge-xvgbtc-breakout-projection
https://steemit.com/bitcoin/@analysisman/analysis-ripple-xrpbtc-support-fibonacci-retraction-and-projection
Pump and dumps will eventually become just as illegal as insider trading. If people want to make money that way I’m not your daddy do what you want, but I prefer the hard honest route for my own peace of mind.
I agree, because that is exactly what it is. And you are so right, peace of mind is priceless!
I'm very sure that the admin and a few other members are surely making a hell lot of money out of this. They say, they release the crypto name to everyone at the same time but I don't believe so. Especially when the group admin urges to spread hoax rumours and make it a bait for other crypto traders. It's very unethical. When one person earns, there is always 2 or more persons losing in this.
I can say I have taken part in a pump & dump. But I made only 5-10% but the actual growth was above 100%. You need to be fast as a lightning or else you need to be a bot as the author says. Good Luck!
This is very enlightening. i always wondered what caused those long, long wicks. It happens so fast, it's almost impossible to catch until after the fact. I thought it was a glitch. Good to know what it really is. I think the more people are aware of what is going on with 'pump and dumps,' the sooner we will all agree to curb the enthusiasm, if ya catch my drift.
Pumper and dumper days are count.
Totally agree with you. The number of people who lost are more than who won ( including, they himself and little more who get better exit time by luck)
Pump and dump group are so dumb.
Always getting good info. Thanks
I think in this scenario, only shotcallers are collecting the profit and herd is just there to provide volume. You explained how these operations work really good! I also try to write informative posts like yours, In my las tone I wrote about spotting a whale entry before the price increase. I would like to hear your opinions on it! https://steemit.com/cryptocurrency/@madbuddhaabuser/how-to-mutualisticly-co-exist-with-a-whale
Good
@lexiconical Pump and Dump groups are pure scams , iv been trying to upload a video for the past 24 hours on Dtube explaining my experience with a pump and dump group which is similar to your experience , i'm patiently waiting for Dtube to be able to upload it
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