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).
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