Someone broke down pretty much exactly how pump and dump schemes with altcoins go down. Though it was worth sharing.
"One or more persons do some big buys that produce price jumps. It's of advantage if the order book is shallow (few sell orders up to a certain point)
Create some chatter in the trollbox with various accounts (not blacklisted accounts already aware by the community for initiating some pumps)
People start to buy at your manipulated prices thinking they can hop onto the wave. This pushes the price up even more. This is the time the initiators start making money as the price is now higher then when they bought.
If the person(s) in point 1. are greedy/ want a bigger return they can now push the price up some more and make the pump seem more genuine.
The trollbox begins screaming "To the moon!" and creating absurd predictions and praising how innovative this coin is.
Even more people jump onto the artificially created wave. Now is the time the initiators begin to silently (no big sell orders) sell into the asks of the sheep or whatever you may call them and pulling in their profits.
People see the price is not rising as quickly anymore and begin to sell and the price begins to drop.
The Initiators create some more chatter that this is just a bear trap and real investor should keep holding.
Very late people see the price drop and pull their bids/buy orders.
The people described in points 3. and 6. see that their asks/ sell orders orders are not filling at the price they set in the first place and decide to set their prices at even lower prices (also called panic selling)
The trollbox is now screaming "Crash!" and "Dump" resulting in in people selling for a lower price than having bought minimizing losses creating a major dip in the price.
The coin in question is now described as dead and as a shitcoin.
The market cools down.
Manipulators begin slowly buying cheap coins preparing for the next pump and dump.
A lot of sad people either bag holding expensive coins or thinking about losses :(
Rinse and repeat."