One of the most important rules of thumb I learned in crypto: If you heard of the pump, you're already late to it.

Pumps are the events every crypto enthusiast dreams of. It is the visceral adrenaline rush of watching the green line shoot up perpendicular to the X axis of the chart. It's the 5x, 10x, 100x everyone hopes they'll see some day. So, when people hear of some pump going on with some project, they rush to it, trying to hop on the Gain Train to arrive quickly at Rich Station. They watch the chart doing a remarkable 5x over the last week and they hit the button: they buy their ticket to financial independence and they're set for life. Right?

Wrong.

Pump chasers are bag holders. That's the short of it.

Pumps are mostly unpredictable events and even when they are predictable, like in some pump and dump schemes, they are only so for a minority of early market manipulators.

There are ways to gauge if a crypto project has a shot at success. They usually have sensible tokenomics, real world applications, dedicated and transparent dev teams, and a thriving community of people supporting it. But there is no way to know when the magic will happen. Best you can do is buy and hope for the best.

The game is even trickier with meme coins. Those are legit gambling. There's no way to tell whether a coin ending with Inu or Rocket will 10x in a week. It is almost totally random, dependent on whatever thing generates hype in pop culture the next week and is able to attract enough gullible people to throw their money at it. Best you can do to nail one of these pumps is to have some dark magic level of luck.

Pumps also happen very fast. They are usually over in about a week. There is usually a steady positive slope that precedes a pump that some people do see happening and manage to make the right bet at the right time. But this is no fool-proof way of finding an early pump, as there are countless projects that usually display these ascending slopes but never really have a blow-off top like real pumps have.

So when price action gets really crazy with those 420% in a day and the rest of the market hears of it, we are usually seeing the final leg of the pump. Experienced traders know they are late, so they will only play modest hands expecting modest returns. They know they have, in the very best case, a 2x ahead of them. Mostly, they'll be happy with skimming off a 10-20%.

But many inexperienced traders/investors will look at a 10x over the last week believing they still have 10x ahead of them; that this is only the beginning, the new normal. Sorry to break it to you: These are the bag holders. These are the ones who are not gonna make it. These are the ones that will provide exit liquidity to the early hopefuls who invested when no one was paying attention.

So key take away from all this: if you hear of the pump, you are late to the pump. Play accordingly, don't be reckless.

Edit: some typos here and there.