Thread by @jtraderco

If you are seriously trading Small Caps, read this!

4⃣⏲️⌛️ The 4 phases of a Pump & Dump

Often #smallcaps have Zero revenue, negative balance, high cash burning ratio.
They will raise $ through offerings and in order to do this they will sistematically run into a process.

1. The pre pump 🗞️
These are so called shell companies.
The charts of these companies look almost all the same. Weekly downtrending charts with few daily spikes.
The company, big hands, insiders will often acquire the stock shares before putting out a press release.

2. The promotion 📰
They will start an offering, S-1/3, Warrants, ATM, etc and the'll wait to send out a press release. This is called "the stock promotion". The news can often be a fast track designation, license agreement, contract, etc. They will use every kind of news.

3. The pump day 🏋️‍♀️
3 different times:
⏲️6-9am for pre-market
⏲️11-14pm for midday
⏲️16pm for after-hours
The main goal is to attrack traders, retailers, investors.
"The higher, the better". This is the slogan for the pump. The higher the stock will go, the more money to collect.

4. The trading 📊
Pro traders, will spot this early on their scanners:
- bulls will buy the news fresh or on a pullback
- bears will spot the daily levels where to attack short while "Retailers" will wait breakouts and often get trapped into a manipulation theme like "bulltraps".

5. The "Pump" 🔥
The perfect pump works best when a stock is ETB(easy to borrow) so that early short sellers can get trapped, when it can be rigged/manipulated at precise levels and at these levels we can find absorption from "real players".

6. The "Dump" 📉
The scheme is ready, there will be more then 1 style of manipulation and dump show, shelf and micro shelf dilution therapy. If the "big hands" can substain and reclaim supports after each dump and no more short sellers in the game, the perfect pump is set.

7. Different types of pumps & dumps📢
- the multiday pump and dump
- the 1 day pump and dump parabolic
- the 1 day manipulation (tracked 4 types of these)
- the premarket dump

8. Tips
Don't be early in shorting a pump.
Don't be late in buying a pump.
Focus on daily levels, volume, patterns, order flow.
Know the filings but don't let these get you "FOMO".
Trade always being aware they can dump instantly.
Know these are not good long term investments.

9. Research
Do now your proper research.
In @SmallCapRoom we analyze in live market all the different types of manipulation and patterns.
We created back in 2018/9 a playbook that is continuously updated and we have trained all the main #smallcaps traders around. Good luck.