The dump is an intriguing cryptocurrency technique that allows you to make several Xs in one trade quickly and easily. The Dump strategy is straightforward and risk-free. The essence of the strategy is to purchase cryptocurrency during a dump, or a sudden drop in the price, and sell cryptocurrency as soon as the price returns to the trading range. This strategy will not generate many transactions, but due to its high productivity, you will easily raise your deposit.
Cryptocurrencies are commodities that are extremely volatile. The coin rate can rise or fall dramatically in a short period of time as a result of this function. Because of their versatility, digital assets may be used in pump and dump (Pump & Dump) schemes, which aim to cause a price rise or fall in order to benefit. We recommend that you find out how to use it.
Characteristics Of The Dump Strategy
- Crypto trading is a form of strategy.
- Trading time – 24 hours a day, 7 days a week
- Cryptocurrencies – whatever (For more details on coin selection, see the section below.) Timeframe – D1
How Does A Pump And Dump System Work?
Before going into detail about the Dump strategy, it’s important to understand the terms “dump” and “pump” in the context of straightforward cryptocurrency trading.
Each Pump and Dump scheme has one main goal: to make money. Pump and dump, also known as pump and dump, are mirror images of each other. If in one case it is important to cause an increase in the rate of an asset in order to make profits, then in another case, a decrease in the cost of the cryptocurrency would be needed to make a profit.
A pump occurs when the price of a cryptocurrency rises dramatically (up to 10-20 times) in a short period of time, followed by a rapid drop to the original price or even lower. A pump is an artificial rise in the price of a cryptocurrency that is carried out by pumps in order to raise money or sell coins at a discount. On thematic platforms, different informational explanations are usually put before the pumps to draw “hamsters” (that is, beginners who are poorly versed in crypto trading).
Market Capitalization
The pampers then pour large sums of money into the cryptocurrency of their choice, inflating the price artificially. The “hamsters” begin to deliberately buy this crypt, and at the height, the pampers drain coins, causing the price to plummet. As a result, “hamsters” either sell coins at a loss or wait for the price to increase again. Which may or may not happen in a few years or at all. Since the pump necessitates large sums of money, it only occurs on lesser-known coins with low market capitalization. So don’t expect this cryptocurrency to develop significantly in the foreseeable future.
Dump is a sudden drop in the price of a cryptocurrency as well as a return to its previous level (hairpin down). Until the pump, whenever the pump wishes to purchase cryptocurrency at a low price, and then after the pump, if traders are disposing of rapidly dropping coins, a dump may develop. The Dump & Pump techniques are common among traders because they enable you to increase your investment several times virtually instant. They do, however, have some disadvantages, which we will discuss later.
Which Coins Are Appropriate For Use?
Fit straightforward cryptocurrency small-cap in combination with Bitcoins and Ethereum for this strategy. It is important to choose coins that trade in a narrow sideways price range and have recently experienced dumps, i.e. hairpins down. After that, you can pull back about 70% from the channel’s lower border and place a buy order at this stage. We’ll sell the coin near the channel’s upper edge, or a little sooner.
Features Of The Dump Strategy In Straightforward Cryptocurrency
Despite its high profitability, the Dump strategy has its own set of characteristics that must be considered when trading cryptocurrencies:
Since it’s impossible to predict which coin would crash, it’s necessary to have enough spare cash to invest in a large range of cryptocurrencies.
This technique has the advantage of not freezing funds and allowing you to cancel an order at any time.
If a dump occurs and an order to purchase a straightforward cryptocurrency is placed, you must ensure that the price returns to the side channel quickly. If you notice that the price is shifting from a sideways to an inclined descending channel, you can exit the trade.
How to save money during the Dump: don’t participate in a trend that is already gaining traction. The dump pays out to those who built it and those who got in on the ground floor in the first few seconds. If there is a second wave, there is a chance to gain; don’t base your decisions during Dump on the forums or the exchange chat;
Accept that you may lose money and view Dump as a gamble (it will not secure your money, but it will save the most valuable aspect of your life: your nerves and peace of mind).
Conclusion
Dumping can be thought of as a distinct technique that does not require technological or fundamental research. It’s debatable if we should call it a scam, but one thing is clear: the organisers are the only ones who profit from it. Why, then, should one not become a dump organiser? It is not prohibited due to confidentiality and the lack of legislation. Since the price of a dumped coin is stable, you can only lose money on the margin if the dump fails (the coin will hardly fall deeper). So all you have to do is find as many passionate gamblers as you can and try. Best of luck!