Topic: PSA: Pump and Dump - aka, the Newbie Trap. (Read 808 times)

Wow - pretty scary! Thanks for the info!

 There's a new trend now of "community-voted" pump and dumps , only winner here is the leader of this pump and no one else. I joined such group in telegram just to read it for fun, cant believe how many gets into it

not just a trap for newbie but also for the uneducated and the poor ones. This is dominated by rich people so it should be a millionaire's game. We just work to give the money we earned back to them.

Could not agree more! I was a part of some these (paid) groups but trust me, nothing good comes out of this!

Clear, simple and well explained!
I hope every newbie will read it to prevent them to fall for it. Thank you OP!

On another scale, some telegram groups (even paid one) called themselves "Signal" groups or so and they do kind of the same (but on another time frame it's not a clear pump candle and dump candle but the result is the same) : They announce that they will give a signal, they give a signal of a specific coin (often a coin with low market cap, that what's should raise a red flag) and they shill it for some time. And then when you buy it during their shilling they sell.

And some of "Youtube ICO reviewers" do kind of the same : They create Hype on some empty/scam ICO, they get free tokens to promote the project and then they sold the tokens when the ico is finished for immediate profits.
First rule on crypto investement : do you own research and don't fall for signals or reviewer guys that will dump on you!

I've been in the same situation as this when I first got involved in crypto and didn't realise that these groups were illegal and I lost maybe $60. When the regulation finally catches up to this market I wouldn't be surprised if the ringleaders of these groups are prosecuted. If this was in the traditional markets you could be sure of it (unless it was somebody with a lot of power and influence).

Thanks for the story anyway, I'm sure it will help a lot of newcomers who read it.

Very good post, thank you so much for this. I have never experienced this first hand, but I am very grateful for you sharing your experience with it. I have always wondered, how and why these work exactly and I think now I understood a little better!

And I love the "if you can't spot the dummy in the game, it's you!". This should be the no.1 rule for everything one does in the world!

i lost so much as a newbie but it never occured to me to publicize my experience as you have done..
nice write-ups and as for newbies i hope you get access to this article and don't make the same mistakes we did...crypto is future but you have to trend carefully so as to have some money to trade as a pro after learning but if you loose all your money as a newbie.it will be a disater

This makes perfect sense, I've been fooled by it because it's lulled with their words, but now that I've begun to understand little by little and finally find this post, I hope others read it too. I really appreciate this paper, but I do not have merit so I can not give anything.
btw thank you
 

I can relate to the OP's experience as I still have a dead shitcoins wasting my wallet space doing nothing, earning nothing. Lesson learned the hard way will never be repeated nor forgotten I tell you.

  I wouldn't call that as a trap since those who join such communities are trying to cheat others.
It's a payback.

This OP is certainly amongst those that should be read by people here around the Beginners & Help section. A personal experience that is as well described as this may save many the pitfall of falling for this kind of plot, that recurrently plays on the innocence and eagerness (with a spice of greed) of the gullible.
It is important to warn others of this kind of scam, and that is part of the spirit of this Forum. It is just as important to be able to gather ones thoughts and dedicate enough time to the post itself, as is the case of the OP. The post is not only merited for being useful, but also for the effort behind it’s creation and expressiveness.

Unfortunately the OP’s account has been inactive since the 26th of march 2018, so it will be in the hands of others to add to this thread so as to give it the visibility it deserves, and not get lost on the trillionth page of this forum section by the end of the day…

thanks, i hope you story useful for others

Yes we all should not support this Pump and dump strategies. The leaders only get the most pumps and the members will get dump.

A really excellent post indeed. I never participated in any signal group whatsoever because even I did not understand the mechanism, I knew that I would not be the thieve and that only leaves open a seat for the fool.

Newbies that are naive are the victim of these pump and dump telegram group. The owners are the real money makers. They do opposite of what they tell the group.

Hi HodorHodl, I'm a reporter at The Wall Street Journal covering crypto fraud and am interested in hearing more about your experience. Would you be open to sharing your story in the near future via chat (shaneshifflett on discord) email ([email protected]) or phone (212-416-2865)? You can read my recent story on ICOs here [Suspicious link removed]j.com/articles/buyer-beware-hundreds-of-bitcoin-wannabes-show-hallmarks-of-fraud-1526573115?tesla=y

No misunderstanding my friend, that is a very valid point of view. It's largely (in my opinion, of course) down to the motivation of the vast majority of users. This is not necessarily a bad thing though, because you need opportunists to build momentum. The PnD is a somewhat undesirable effect, but the explosive growth (both in monetary terms and more importantly in publicity terms) is a positive one.

Great observation, thanks for posting!

Awesome story . I always had suspicious thougths regarding PaD, however never really understood why. now it is clear

Do not misunderstand me as I am strong supporter of the blockchain technology, thus I might be wrong but the altcoin/bitcoin market seems to be a Pump and Dump as well...

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

Surprisingly low number of searches though!

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

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).

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 ?

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.

Thanks for sharing your story and the helpful information!

So impressive to read this OP made by a Jr. I feel relieved from so many posts with nonsense content.

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! 

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

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.

Well this is interesting....

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

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$..  
So it's good lesson for me.

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.

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! 
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!

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

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.

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.  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.

 

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.

Thank you a lot for your explanation!

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.

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.

Good conversation about this going on in Trading.

https://bitcointalk.org/index.php?topic=2614275.20

Newbies beware.

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

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 🤑😩

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.

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.

Updated with this "community-voted" crap.

You still won't win.

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.

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

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.

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.

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.

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.

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

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

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.

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

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.