What is PRE-PUMP?
“PRE-PUMP” is a strategy for working out a setup due to the emergence of impulsive movement on an asset according to a clearly defined algorithm, which includes the development and identification of patterns in the movement of large capital. The vector of teamwork is aimed at analytical monitoring of instruments and real-time tracking of the “emergence of impulse” on the asset.
How does it work?
Certainly, many of you have heard the definition of a coin PUMP – it involves pumping an asset, and the instrument shows explosive growth of 10…50…150%. Such movements occur due to manipulations by “large capital,” and our task is to be able to track and enter/exit the market along with it. For such operations, a thorough selection was made from more than 2.5 thousand coins based on the following criteria:
- Project capitalization;
- Coin trading volume;
- Level of liquidity on exchanges;
- Analysis of accumulation by large capital;
- Asset reputation;
- Price criteria.
Correct handling of the setup:
Let’s conduct a detailed analysis of the working setup so that each community member clearly understands the sequence of actions and feels comfortable working in this direction.
Trade Entry: After the setup is published, community members should immediately enter the market position, adhering to MM (money management) and RM (risk management) – this is crucial! Entering a trade is done with 1% of your total trading volume. For example, with a trading deposit equivalent to $10,000 (100%), allocate no more than $100 (1%) per trade – this is a very important recommendation, as this direction may involve up to 15 working setups. For participants with small deposits, pay attention to exchange parameters such as the minimum order value; for instance, on the Binance exchange, the total order value should be more than 5 USDT. Therefore, budgeting should be planned to cover the entire working process.
Note: Sometimes, at first glance, it may seem that the coin has already begun its active growth and is entering the stage of impulsive movement or, conversely, after the purchase, a pullback occurs. One should be prepared for both scenarios because the nature of such movement does not allow entering a trade at the most favorable values while being confident in the emergence of a true impulse.
Position Averaging: Our working algorithm includes averaging the position in the case of a false impulse and subsequent instrument drawdown. This is done to minimize risks during a market dump by averaging the position and try to exit the trade in profit as quickly as possible or partially at the break-even point.
Averaging is done strictly according to the values specified in the setup – two orders of 1% each.
For example, having a trading deposit equivalent to $10,000 (100%), a participant entered a trade with $100 (1%). In case of a decline in the asset, you should have the opportunity to average your position, totaling $200 (2%) – $100 for each order.
Sometimes the situation can be as follows: after a correction, the instrument enters a new stage of local accumulation while maintaining the global impulsive movement. Therefore, in these cases, it is more reasonable to adjust the targets rather than completely releasing the position at the break-even point.
We draw your attention that averaging allows us to enter a trade with a larger volume at a more advantageous entry point, potentially increasing the possible profit from the trade, but at the same time, it extends the setup execution period.
Second-tier instruments are cryptocurrency projects with relatively low popularity and market capitalization. Among second-tier coins, instances with a narrow scope of application are more common.
A drawdown, even with position averaging, can reach 20-30%. This happens due to various FUD (Fear, Uncertainty, Doubt) news and macroeconomic events that affect the entire cryptocurrency market. For example, a BTC dump can trigger a significant drop in second-tier coins, and there’s nothing critical about it, so there’s no need to worry.
Profit Taking (TP)
After entering a trade – it is ESSENTIAL to set targets in advance for position fixation! Failure to do this immediately poses the risk of not being able to capture your profit in time, as in our case, the price reaches the targets impulsively, followed by a sharp price rollback.
It is also worth noting that technically it is not possible to accurately determine the exact height of the impulsive movement for PRE-PUMP instruments. The maximum that can be done is to identify a certain cumulative probability of price breakthroughs individually for each instrument and, based on this probability, form targets.
That’s why on different time frames, targets are adapted depending on the market situation and, during the process, are adjusted for each setup individually, depending on the chosen instrument (coin) and the strength of the impulse emergence.
Position Fixation Volume:
STATISTICALLY, the probability of achieving the 1st and 2nd targets is significantly higher than profit fixation at the 3rd and 4th targets, on average being 15-25% net profit without using leverage. Given the above, position fixation can be done as follows:
Target 1: 40% of the position volume;
Target 2: 30% of the position volume;
Target 3: 20% of the position volume;
Target 4: 10% of the position volume.
This distribution is just one example. Each community member participating in the PRE-PUMP setup can independently decide how much of the volume they will fix.
The only recommendation is to keep a small portion of coins for fixation at the 4th target, as even a small position volume can bring significant profit.
Stop-Loss (SL)
Limiting losses in this direction until the position turns profitable is not always effective. In some cases, the coin may show a “false impulse” and continue to form a descending accumulation zone; in such a case, fixing the position will result in unjustified losses.
Explanation: upon reaching at least the FIRST (!) target, in case of a reversal movement and the price falling to the break-even zone/point (closer to the entry point), the participant cancels the remaining SELL targets and IMMEDIATELY sells the entire coin volume at break-even with a market order.