I am very new to the cryptosphere, and to investing in general. And I bet a lot of you are too. Steemit is a pretty comfortable place for newbies to get a view of everything going on, from FUD to FOMO and from pumps to dumps.
I haven't made or lost a lot of money. I'm just kind of flowing with the market. And the reality is that just by holding the coins I do have, I'll see positive returns in a few years no matter what — it's all going up in the long term.
The problem is the short term game.
Once you get into crypto, your whole sense of time becomes radically warped. One day can feel like a week, and one week feels like 6 months of normal time.
There's so much going on too. There's news, Reddit, Twitter, Slack, Discord, and worst of all, Telegram. I am following only a handful of Telegrams for certain coins. (About 25 unique chats.) Don't get me wrong, I love it. I get to chat with fellow hodlers and check up on current events.
How I got into using Telegram was finding the CryptoPing trading bot ICO recently. They let users experience the bot for free, even if you don't participate in the ICO, although come July 2nd and beyond it will probably begin the paid subscription phase where you pay 0.01BTC worth of PING tokens to use the bot (which will eventually (hopefully) become a trading bot). That's if the dev's don't just run off with everyone's money to Spain for a vacation like Mycelium's team did.
Anyways, the idea behind CryptoPing is that the bot alerts users anytime a coins recent buy volume and trading price moves dramatically up when compared to the previous 24 hours. This can sometimes indicate that a coin is about to go on a run, though usually it just indicates that a whale has spent 3 BTC on a shit coin which had been trading in the low Satoshi range.
Unless you are able to make a trade immediately, and set your sell limit at a reasonable gain—or watch the market very carefully—you'll likely miss out on the bullish action and end up trading late, and buying on the down turn. That's not CryptoPing's fault, and overall I really enjoy watching the alerts come in. It's just the limitations of a bot trying to give a reliable signal as something is happening. After the latest "crash" I was able to see when everything reverse as more and more alerts came in.
This led me to following pump & dump groups on Telegram, who spam every other group. There's a ton of them and they get a ton of followers very quickly. They then announce a pump, starting several hours out to give everyone time to get their Bitcoin ready to buy. What they don't give you is the name of the coin that they are pumping. The reason is that they don't want everyone driving the price up too early, and more importantly, they want everyone to buy at the same time -- when they are selling.
The Boiler Room
If you have ever seen Boiler Room or The Wolf of Walstreet then you know what these whales in these pump groups are doing.
The whales buy up a cheap coin, often a shit coin, long before they announce that it's the coin they are pumping. Days later they coordinate a pump, get the Telegram pump groups excited, and then reveal the coin at a specific time.
They tell their followers to buy and hold for at least 5 or 10 minutes so that the rest of the market can see the pump and join in, and then everyone can dump to the latecomers. What actually happens is that the whales immediately dump to the people who follow their Telegram & Twitter groups.
The Pump
This morning I happened to see the pump announcement and decided to follow it and see what happened...
The coin that the whales had bought up in preparation for the (pump &) dump was InfluxCoin.
Three previous one hour signals from $INFX via CryptoPing:
2017-06-15 04:01 +23.10%
2017-06-18 12:18 +8.19%
2017-06-20 10:58 +9.47%
Whether InfluxCoin (INFX) is a good coin or not is a moot point because they only tell their followers about it at the very moment that they are supposed to be putting their sale orders in.
If anyone had time to check the social tab on coinmarket cap for INFX (link) they would see this tweet:
Nothing says "this coin is dead" like "we have no devs."
Does that sound like a coin you would buy if there was a chance you'd get stuck holding it if you couldn't dump it during the pump? Does it sound like a coin you'd buy at all?
To be fair to INFX, they were overtaken by Chainworks and may one day, far into the future, come out with something useable and the price might go up, maybe, possibly.
The fact of the matter is that, right now, this is a total shit coin that's not going anywhere, has no roadmap, and is not worth investing in. "So, what? I'm just trying to sell it off during a pump." Fair enough, but there's a huge chance that no one outside the pump group joins in and you'll be left holding the bag.
So what happened during the pump?
The announcement to buy INFX came in at exactly 7:00 am, which is marked by the extra long wick above the red candle.
If you don't know, a candle body represents the time increments that the chart is at. (The one below is at 30 minute intervals) When it's red, that means that the opening price is the top of the candle, and the closing price of that 30 minute span is at the bottom. The wicks coming out of the top and bottom represent the highest and lowest buy prices.
The wick seen below at 7:00 am happened in one minute. That was the entire pump. Every single person following the whales had exactly one minute to set their buy orders and sell orders and turn a profit. Obviously, the only people to sell at a high price were the whales who had set the sell orders long before the pump began.
Everyone else was left holding a bag of INFX.
The price dropped and stayed down after the sell-off. At least the price sat at a lower resistance and didn't plummet, as is what happens in some cases.
The lesson here is that only the whales are going to turn a real profit off of a planned pump, and you could easily lock up your spare Bitcoin in a shit coin for a while waiting to break even so you can get your money back.
Thanks for reading!
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