A pump and dump occurs almost on a daily basis in the market – despite the fact that it’s highly illegal. This week was a very interesting week in the market…It all started with the bloodbath $SPY showed us on Monday, which kicked off a slew of short opportunities. Along with the market selling off, we experienced the pump and dump of the year! $BPTH.
As most know, manipulation in the market comes at us in all forms and from all directions. From market makers controlling price, to hired pumpers pushing junk companies. This weeks pump from $BPTH certainly took the cake. A well orchestrated plan to manipulate price to unsuspecting traders.
There were definitely opportunities to catch, both during the pump and once the dump was underway.
The social feeds were on fire talking about money being made from this pump.
Listen, we’re in this business to make money, period. However, longevity in this business requires knowledge of the “why”. Unfortunately, many newbie traders made some money by clicking the buy / sell buttons last week, and I’m sure it gave a level of confidence in the process. The down side is most profits were from pure luck and there’s a high probability the earnings will end up back in the market from lack of knowledge anyway. Vegas style profits aren’t what the market is about and certainly not what being a professional trader is about.
Now, there are certainly strategic ways to capitalize on these pumps,
but understanding what’s going on is far more important. For the sake of the newly found confidence, protect the earnings and re-invest some into a proper education so you’ll ultimately be able to answer the question, why?
