⬅️ Introduction:
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In this article, I will try to explain some of the strategies that huge whales resort to to falsify market conditions in malicious ways. It is related to the pump and dump strategies, which in Arabic means “pump and dump”, so that new traders do not fall victim to fraud while trading in the field of digital currencies, because these two terms are... Strategies that some people use maliciously to deceive novice traders, so they indirectly steal their money during rapid speculation, especially those that are based on a scalping plan (see my article about scalping to learn more).
⏪️ First: Pump strategy:
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It is a strategy based on coordination between a group of participants with the aim of creating an artificial rise in a particular currency by raising its price to the maximum possible extent. The story begins with a great effort by a person or group of people organized within the framework of groups and forums planning to promote and publicize the target currency within. Closed groups, or open groups such as social media platforms. They agree on a specific time to resolve the matter, and then the organizers begin to repeatedly invest in the target currency, causing its price to rise to record levels. When its price reaches the peak, small traders and beginners enter, and often they do not understand what is happening, so they get into a psychological state called FOMO, so they buy into the currency. Summits, and then the organizers take advantage of the opportunity and sell large quantities of the target currency, and its price drops to the bottom as a result of the large supply of the currency, and thus the beginners are disbursed and they lose their money.
⬅️Second: Dump strategy:
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It is the opposite of a pump, where organizers aim to reduce a specific currency in order to collect the largest number of it. This is done in various ways, most of which are issuing false claims and fake news about the target currency, and they resort to pumping large quantities of it into the market, so its price suddenly drops to rock bottom, hitting new traders and... Those who have no experience in the matter panic and sell their currencies at a low price, and when the price of the target currency drops, collection operations begin by the people who planned the matter.
⏪️ Alerts:
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In order for the trader not to fall into the trap of bump and dump, he must adhere to the following tips:
1- Follow currency news from reliable sources.
2- Before investing in a specific currency, it is necessary to conduct in-depth research into the subject in order to know the strengths and weaknesses of the target currency.
3- Avoid decisions based on speed and fear of missing out, or what is called “FOMO” for short.
4- Control your nerves so that you do not panic and sell at a loss as a result of fear that leads to panic.
❤️❤️ If you like the topic, do not hesitate to like and share so that we can continue to research and give more ❤️❤️
🌹🌷 May you always be in God’s care 🌷🌹