This is a long blog post, but trust me it’s worth it as it took me 15 years of trial error to be able to write this…and it will change your life as it has mine.
In the first 3.5 months of 2014, I’m up nearly $500,000 in trading profits, EVERY trade detailed HERE, it’s been the best start to a year since I made $700,000+ in the first few months of 2000 when I was just a college Freshman as detailed fully in my bestselling book “An American Hedge Fund” which you can download for free HERE.
If you can’t commit to reading my entire book (although most people say they finish it within a few days), at least read Chapter 6 for FREE HERE where I made $100,000+ in one day from my dorm room — yup it’s been a crazy adventure for this middle class kid from Connecticut ever since I got started trading penny stocks 15 years ago.
Download a PDF version of this post.
As I write this today 2 days before my 33rd birthday (get excited for this Tuesday I have some gifts for you as it’s far better to give than receive as you can see from what I’ve given to my readers on birthdays past HERE and HERE), I’m getting a ton of emails from absolute newbies, especially #wolfpack members who I wrote about HERE yesterday), who have prospered greatly in this bull market or have missed out and are now dying to learn how to trade.
A few weeks ago I laid out this 5-step plan and 60+ key trading rules in this great blog post…below I’m narrowing it down to 15 KEY rules to learn how to make consistent money year in year out trading the way I have the past 15 years:
1. Find A Mentor: that’s what myis all about. I am 100% self-taught and never had anyone show me the ropes and because of that I missed out on great opportunities and made tons of newbie mistakes for too long. This is why I take so much pride my and we’ve recently bulked it up adding in monthly webinar with my 2nd millionaire student Tim G. who has now turned $1,500 into $1.7 million in 3 years since becoming my student and has been profiled here:
My team is now up to 20+ employees — including both my mom and dad who I had to take to sit courtside with me as we watched our hometown team UConn win the NCAA Championship:
(I’ll do full blog post on that when I have time, sorry to my students who wanted to go, my dad left the best Facebook message as we don’t get to spend nearly enough family time together now that our business has taken off)
— and our sole purpose is to create more millionaire students since it’s not only the most fulfilling thing in my life, but also drives business big time as people begin to realize I’m the hardest working and most successful trading coach out there.
2. Create Goals, Refine & Achieve Them: I’ve now been teaching for 6 years and at first I thought my goal was going to be to turn $12,415 into $1.65 million in a few years for a 2nd time while detailing the journey & lessons on this blog…from late 2007-2009 I turned that $12k into $90k as outlined HERE and got my account up to $213,000 in 4 years, but as my small account grew, I got tons of followers and I refined my goal to create a millionaire student from scratch…and began each year thereafter with $500,000-$600,000 in my accounts so I could take full advantage of the trades and earn mid-six-figures/year from trading as I’ve done every year since.
My goal shifted from being aall about me to being focused on my students as you can see in these videos I made when everyone thought I was full of BS thinking it’d be impossible to create a millionaire from scratch very quickly:
Lo and behold in late 2013 I created my first millionaire student, Michael Goode, who is now up to $1.3 million in profits in just a few years, and now he is a co-mentor in myas we work our asses off to create a 3rd millionaire student:
So get into penny stocks with a specific goal, monetary and knowledge-based goals, don’t set any specific timelines, but work consistently to achieving those goals and if you’re meticulous, you’ll be amazed at how quickly you can achieve them.
3. CUT LOSSES QUICKLY WHEN WRONG: This is not optional. In trading and in life far too many people get sentimental and hold on to trades, investments and relationships when things are not going right hoping and praying that things will turn around. Sometimes they do turnaround and people rejoice and feel better about themselves and the world in which we live having so much faith and “sticking to their guns”.
Unfortunately, the #wolfpack has recently lost 40-70% in the past week or so on their marijuana penny stock holdings with this kind of thinking and while this could just be a temporary dip, if you want to consistently make six figures/year, you can NEVER let yourself get into the position of being down so much as it crushes your confidence, account and worse prevents you from taking advantage of any other, perhaps better, trading opportunities while you wallow in defeat…not to mention what if it’s not just a dip as thousands of historical pumps like THESE prove…77 penny stocks with VERY similar patterns to all these hot weed plays are mentioned in this following video and all 77 of them have tanked 95-99%:
4. LOCK IN PROFITS: As I said in this FOX interview and in the video lesson below it, my students and I make 10-20-30-50% gains within a few days and then lock them in to keep our accounts growing consistently…no multi-baggers, no big losses, 60-75% winning ratio, it’s amazing how well it works not just for me, but everyone else too:
5. Focus on the most actively traded penny stocks & use them to grow your account, don’t believe a word they say: There are thousands of penny stocks with interesting stories, almost all of them are full of shit. You must accept the BS, not try to change it and profit from it as far too many newbies refuse to be so cynical and they lose time and again as a result.
There’s nothing wrong with buying an actively traded penny stock being pumped up by hype or manipulation, just understand the cause of the runup and don’t you dare drink the Kool-aid and start believing in these companies, no matter the temptation. Every penny stock veteran will tell you ALL of these companies and their management teams will let you down…newbies don’t want to accept reality.
Sure, sure, there is the .000001% chance your penny stock makes it and becomes a giant company, but the low odds of success mean you can’t predict which ones will, no matter how much research you do, and while you wait, you’re missing out on higher odds setups, hence why I want to tach you to make consistent profits, month in month out, year in year out (not necessarily every day as some days there just aren’t any high odds plays)
Also, many penny stocks have exciting stories, but no trading volume or stock price movement — keep those on your watchlist, but don’t trade them until they become active as remember you want to make consistent money, not hope-based one time profits.
6. Stay liquid the majority of the time: Penny stocks move so quickly up and down so don’t get lazy and just resort to holding a stock “just in case” because you don’t want to miss any big move if life gets in the way of your trading, as it often does.
Every few days — especially lately — there’s a new hot penny stock in play and you want to have cash available to play it, either long or short…too many newbies get stuck in low-odds positions and can’t play the good plays.
If you trade like a sniper, aim small, miss small, you’re always ready to take good shots.
7. Ignore choppy stocks, focus on “gimmie” patterns: Many penny stocks have great debates on message boards and chatrooms over what they will do, bullish and bearish arguments alike and the stock chart is all over the place…IGNORE THESE…focus on the clear breakouts and breakdown I detail HERE in some free video lessons and in this great FREE webinar I did (and the stocks I mentioned as longs there all spiked 50-100% in the following months)
8. Accept Sector Rotation: Newbies don’t realize every few weeks and months a new sector becomes hot…lately it’s been the marijuana stocks, before that it was alternative energy, 3d printing, ethanol, China, oil, gold, homeland defense, nanotechnology, the list goes on and on…that’s Wall Street — hype up a logical world news-related story to get the mob of newbies and financially naive to invest in a “hot trend” and then move on to the next hot sector after the story is played out in the media…the sector is hot for a few weeks or months based on media attention, then the stocks get crushed as there aren’t any suckers left to buy and the insiders cash in in a variety of ways…learn to recognize this game and buy on the way up, short sell on the way down…don’t be so ignorant as to believe any of these sectors will actually have a lasting multi-year or multi-decade rally (as far too many marijuana penny stock “investors” do and are shocked when the SEC halts absolute junk like PHOT, wake up!)
9. Be Open To Short Selling: Ohhhhhhh yeah, because history and statistics, not lying penny stock promoters and pumpers, show that nearly every penny stock company fails and their stock will go to ZERO it’s only common sense to realize you can make a boatload of $ BETTING AGAINST THESE PUMP AND DUMPS BEFORE THEY CRASH.
It’s not illegal, it’s not unethical, the stocks will crash whether or not you short sell and sometimes there won’t even be any shares to short so you’ll be singing this song:
10. Predicting penny stock crashes is not just possible, it’s EASY: Yes, yes I made my first million buying penny stocks, but shorting pump and dumps as they crash is 100% predictable and it’s made me several million dollars more, see some video examples like these 4 live short selling trades caught on video
11. Have the right broker: Many brokers, especially penny stock brokers SUCK and will do everything possible to rape you with fees, poor service and crappy borrows on shorts…see my preferred brokers HERE and HERE if you want an intro to some new brokers we’re beginning to work with (not announcing them just yet as I made that mistake before and the broker couldn’t handle all my students well)
12. To make the big $, you need to grow your small account FIRST: When I made $100,000+ in one day from my college freshman dorm room and when my 2nd millionaire student made $200,000+ in one day HERE before turning 25, a lot of people starting with just $1,000-$5,000 think that kind of money is possible when you’re starting out…you might get lucky, but if you learn my strategy and take 10-20-30% gains instead of going for longshots, you will need money to make money.
The good news is I made that $100k roughly a year after I had started (and had already grown my $12k into $250k) and Tim G. made his $200k less than 2 years after starting with just $1,500 of his own money.
13. Accept that good penny stock news can be misleading: When SPLI came out with their long-awaited financials last Monday, tons of #wolfpack members rejoiced and proclaimed “today is the day!”, mistakenly believing the good news would help the stock climb back to the .40s from the .20 range…instead the stock tanked 50% within a few days and they lashed out to blame short sellers like me.
Shorts had little to do with the 50% collapse, what newbies don’t get is that when a penny stock pump like SPLI rises exponentially from fractions of a penny/share to the .40s that’s best-case scenario…ALL the good news is already priced in…watch this video to better understand it.
I hate getting emails from people confused when a stock with good news gets crushed — they naively say penny stocks move randomly…nope, you’re just not paying attention to the right indicators and catalysts.
14. NEVER stop studying past patterns: I still review this study guide every few weeks as contrary to what the financial media and bigtime brokers tell you, having access to all the most breaking news and market data is not going to make you rich or consistently profitable. 90-95% of traders lose because they focus on the wrong stuff.
Veteran traders know EVERYTHING you should be focusing on has already happened in the past…namely studying patterns like these and seeing what actually moves stocks up and down in various markets…then just waiting for those setups to appear again.
The players change, the stocks change, but the patterns don’t change because human nature doesn’t change…great quote from this great trader
Of course trading software like StocksToTrade.com IS useful to find stocks that fit patterns in realtime, but the key to your success is being prepared AHEAD of time…when my student Blake spotted EKSO using Stockstotrade while aboard our $12 million yacht a few weeks ago, he bought some, but I went big because I had experience with this exact kind of pattern…and the next trading day I was $70,000 richer, even while I underestimated its spike potential as I coulda woulda shoulda made $200,000.
15. You need to get started TODAY Sure, sure I’m raising prices on my this pattern before it happened to their holdings and they didn’t act in time to cut losses quickly…that’s 100% their fault and I hate when good people lose unnecessarily.here later this week (to weed out degenerates who only want hot stock picks and not to actually study and learn my strategy over the long haul) so I’d signup ASAP if you haven’t already to lock in current prices FOR LIFE, but more important than my is the fact that because we’re in a hot market and there’s opportunities every single day lately, the best way to be prepared to take full advantage is to study the past…far too few #wolfpack member ever saw
I don’t mind battling newbies, offending people with my passion, the cool thing about being 100% real about my success and students’ success in an industry full of frauds is that it’s not a question of “if” someone will want to become my student, it’s “when” and “how many opportunities will you miss until you realize you should study my stuff?”