|Instructions & Advice||Statistics|
A "pump and dump", or simply "pump," is an attempt to artificially increase the price of a cryptocurrency over a short period of time. This is accomplished by organizing a group of people with the same interest and all agreeing to buy in at the same time. This greatly communal buy action can greatly increase the price of the cryptopcurrency. A "dump" phase usually immediately follows as members take profits (or sell at a loss), causing the price to fall back to roughly where it was before the pump began.
I look at participation in pump and dumps as a form of gambling. Sometimes you "win" and make a nice profit. Other times you "lose" and end up with less BTC than you started (or an altcoin worth less than you paid for it). There is nothing wrong with that. All participants (including outsiders attracted by the price increase) realize they are playing a game, hoping others come in after them to keep the price increasing.
Like gambling, "the house" has an edge long term. When you play blackjack or roulette, the casino wins 1-2% of every bet on average, but some individual players can go on a long winning streak and make a huge profit. On some games (e.g. poker) individual players can be long term winners at the expense of other players. In pumps, the pump organizer is taking the role of the casino. They will almost always win, while others may win or lose. Skilled participants, like poker players, have a chance to be long term winners.
The first key to having a chance to profit at pumps is to select the right group. Many people are willing to play a casino game they know they will likely lose for a chance to win big. No one, however, would play at a rigged casino where the house is assured of beating all players. Likewise, no one should participate in a rigged pump group.
How to do know if a pump group is rigged though? That's where Pump Analysis statistics are a big help. Avoid groups with consistent prepumps (a clear indication the organizer is stacking the odds against you). Chose groups with high volume generated (the more people who participate, the higher percentage who exit with a profit on average). And look for groups with long average duration - a very short duration probably means the organizer is immediately dumping on his members as soon as the pump starts (as no one else can afford to sell near the start price without taking a loss).