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My Latest AOL Finance Article, Some Seriously Good Advice

Posted by timothysykes on Mon 19th of May, 2008 02:47:53 PM

You Can check it out right HERE

This was written last night and I basically nailed all the top percentage gainers today….too bad AOL didn’t publish it until 1pm, but that’s what I get for submitting a 2am article on a Monday as it’s there busiest day…

Best/most useful quote form the article:

For now, let these kids play-some are even good to play form the long side, if you’re willing to take on that kind of risk (not me!). Call them in from recess-or short sell them-only when it begins to get dark outside

All morning long there was no darkness whatsoever, all these stocks, CPSL, FPP, MXC, PDO, RCH, all they did was surge higher. As I’ll tell you again and again–to help you understand what NOT to do–I stupidly shorted into the FPP and MXC runup, and inevitably got squeezed, losing $400 (detailed post coming tonight). Now that they’re afternoon fading perfectly–PDO down $2 from perfect breakdown point at $18.30, RCH down $1 from the same kind of point at $10.70ish, MXC, well, it’s halted (probly gonna say there’s no reason for the runup and get crushed) obviously easy gains (which you should take if you haven’t cuz these guys bounce like no other), rubbing it in my face that I have no trades/buying power left today. Considering these drops, my entry prices weren’t terrible…but like my early KYUS trade, I took the quick losses cuz with my tiny account I can’t risk anything big, no matter what.

And, that seems to be the biggest problem with trying to grow such a small sum while being limited by the SEC in how many trades you can make. Gradually getting better at it, but it’s like teaching Forrest Gump algebra.

If you have a small account, don’t short into morning spikes because they can and do go further than anyone thinks possible. All you gotta do is wait til the afternoon when the shorts are mostly squeezed already and reason enters the picture as people are like, “hmm, maybe it’s not so smart to buy a stock up 150% in a few days?!?!”

You can have the patience, I know it. Be better than Forrest.

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  • Are we on the tip of another credit crunch. LEH is becoming a scary monster!!! AHHHH Sykes what are you liking in the banking sector.

    www.RebelMogul.com
  • cash
    Tim good call to run it by your lawyer. I can not wait to read that post.
  • getshorty
    we already answered, if not enough for you, call your broker, you are paying them for that service
  • SEC article coming soon, vetting it with a lawyer first cuz its good stuff
  • jesseb
    So I guess no answer to my question eh? How exactly this crap works with the SEC reg...
  • @wes yea I'm up on cpst since 1.56 and now they have turbines that burn sugar ethanol. When they can learn how to make their older turbines better it will improve their cash flow so I'm holding.
  • new post is a daily roundup:

    http://www.timothysykes.com/2008/05/19/the-dail...

    i want all u guys to detail your stuff in the comments section so we can look back on daily roundup posts specifically for lessons/learned
  • Jibri
    Looking for my first short. What's in play for tomorrow?
  • getshorty
    Sucks I am short Canadian dollar, me and my good fundamental with crappy timing.

    Should do nothing but pennystocking...
  • Jibri
    Tim, its that time again. You said every few days you were going to explain some of the basics to us newbies. I'm waiting and watching. Thanks to you and all the bloggers that the newbies are learning a new trade.

    One day I too, will be a Jedi Knight.
  • jesseb
    Why didn't CWSI show up on Yahoo's price % gainers?
  • jesseb
    Maybe I'm just a moron...but how do you calculate the 5 day period? I mean...Let's say that you get 4 trades, four trades where you buy and sell them on the same day.

    Monday you buy and sell two, Friday you buy and sell two, can you trade again on Tuesday and then again on the next Friday? It's godamn confusing. And weak ass sauce, fucking SEC.
  • cash
    Tim can you explain why the morning surge always happens? I saw it today and it was amazing.
  • getshorty
    Crazy chart of cwsi, would wait for a breakdown to short the shit out of it.

    However, little scared about the volume, today was 250 000 plus, two days ago was 4 thousand. Can it be a dead trap?
  • links should be allowed...another bug, fun

    u can trade ore often once u have 25k, but u still gotta respect buying power, otherwise you dip into leverage and thats dangerous
  • sonid
    CHECk out cwsi look at that chart !
  • getshorty
    JMoates, you can actually trade as much as you like as long as you keep your account over 25k BUT I do not recommend doing this if you are close to 25K, because as soon as you go under 25 you would not be able to trade. THen you would be able to ask your broker for removing the block from your account, then you would be able to do the usual 3 day trades within 5 business days.

    Interactive Brokers, and I think all the others can only grant one "pardon" every 6 months.

    It happened to me, over 25k, trade like a madman, went under 25, couldn't trade, got the restriction removed, (takes around 1 week), and was warned that if I got into patern day trading again, they will not be able to reactivate the trading until 6 months have passed since the previous "pardon"

    Maybe a good idea to wait until you are around 30k to trade more than 5 day trades within 5 days. Unless you have money aside you can put into the account in case it goes under.

    Hope this helps.

    Sucks I couldn't trade today neither I will tomorrow because of this restriction.
  • jesseb
    Ok, apparently no links allowed in comment field...here is what I was trying to say sans-links.

    Wikipedia says: Pattern day trader is a term defined by the SEC to describe any trader who buys and sells a particular security in the same trading day (day trades), and does this four or more times in any five consecutive business day period.

    Is the mighty wikipedia right?
  • JMoates77
    Here's my question: Now that I have 25K in my account, can I day trade as much as I want? Tim, this might require an answer from you.
  • jesseb
    Ok, that's two different responses :P Anyone know for sure what it is?
  • you cannot buy and sell an equity in the same day more than twice in 5 trading days, otherwise you'll be noticed as a day trader.
  • wes
    more than 3 pdts
  • jesseb
    Someone said that the SEC regulation if your account is under 25k is 5 trades in 5 days? Seems like someone else said it was 3 trades? I don't want to beat a dead horse, I'm sure it's been said a million times...but I searched the site and couldn't find it.

    Can someone dumb it down for me? Or tell me where to go looking.
  • MTXR
    ha, i didn't even try to google search, i just gave up after 5 mins.
  • jesseb
    That kind of trivia is no fun anymore, for reasons that I think are obvious:

    http://www.google.com/search?source=ig&hl=e...

    :P
  • Evan
    Commodus from Gladiator- I wanted to battle him when he said it!
  • wes
    BTW I saw on CNBC that they gave a little shout-out/pump to SOLF. Might be good for something tomorrow premarket?
  • wes
    I didnt run a stock fetcher scan today; I only do that when things are slow. I didnt have time. Tims site is great for picks! Thats where I found out about KYUS and CPST. I found PEIX from Market Kid. And Solf from Mr. Shannon's great website, AlphaTrends.net

    Shannon's site has a great list of stocks that are more suitable for a slightly longer time horizon (days to weeks). I think last week they averaged 10%

    I like to hold longs overnight and wake up to sell them the following day as they surge before they slow down and drift the rest of the day.
    Cash aim me at scrubalufugous
  • cash
    Damn Wes sounds like you had an exciting day plus you ended up big can not get any better then that. So do you make a list of stocks to watch the night before or in the moring by using stockfetcher right? then do you edit or list throughout the day?
  • MTXR
    Sorry, I just can't remember a movie with that line.
  • Webster
    Gladiator!
  • wes
    Jesus today my account took hugeee swings. I got to go get drunk. Today was an emotional rollercoaster. I was up big, down huge, had to readjust my STOPs!!. Finished up big. Hope everyone did good.

    I'm long on PEIX (avg cost of 4.71)
    Long on CPST @ 3.68
    Long SOLF @ 25.28
    Short KYUS @ 4.49
  • cash
    So for the advice Tim.
    So Wes you did pretty good today right? Are you holding anything over night?
  • MTXR, name the great movie "Have I missed it? Have I missed the battle"
  • AP, too funny, now i'm kinda glad i got out of MXC, i hate devloping news, thats why i prefer frauds, they got nothinnnnnnnnnnnnnnnn


    cash, i short every now and then in the orning when my greedy jew nature takes control of me...brings me nothing but pain....afternoon fades are soooooooooo much easier
  • MTXR
    Damn, i just woke up. I guess i missed the action.
  • cash
    So are you for real when you say only short in the afternoon fade? So never short in the morning?
  • AP
    Some guy named timothysyCAs is pumping the MXC PR on yahoo message board
  • i sleep when i can, lately about 4-5 hours...too much work to do, too much to change in this joke of an industry

    to prevent me from trading tomorrow morn, i plan on staying up til 5am tonight, waking up to post my pre-market watchlist then going to sleep til noon...that'll keep me disciplined! sad thats it come to that but i truly am an addict
  • correct, lots of stocks moving, but none are really ideal

    getshorty, MXC is probly gonna open down like $5-$10, my guess is SEC is requesting info fromt he company, company will say no news to report...gonna piss me off that i took a 50 cent loss on 200 shares, but thats the game

    jeff, glad to see you posting on our board first, screw those ET bastards! COIN short looks pretty good here, wish i had the buying power to join ya!
  • Dan-O
    I'm glad to be the example of what not to do today. Revenge is pending.
  • wes
    I follow these stocks by having about 6-10 Think or Swim graphs up.
  • be-the-ball
    MXC halted BECAUSE of a 42% one day gain
  • jeffrogers77
    just shorted 2,000 COIN at $8.25, looks like its a major breakdown. i figured i'd give you guys the heads up before i posted on the elitetrader forums
  • A
    Wow, it seems like you never stop working Tim. How many hours of sleep do you get per night?
  • cash
    how do you two follow all these stocks in one afternoon. i am trying and i am dizzer then hell now. but damn it is a ton of fun i can not wait to make some money off of them.
  • Stoquer1
    It sure is fun watching and learning from all of the traders as they post honest timely trades. I am not in anything today and I am getting a different prospective by not needing to be "in" today.
  • getshorty
    Did MXC just got halted? or is my broker wrong.

    Halted after a 42% one day gain. Don't get it.

    Great example of why not to short a supernova before it breaks down. Wow
  • i'd be looking to buy it if i could!
  • wes
    PEIX might wanna check this one out. I went on on it at 4.6. Its up 56% on the day.
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