How To Short Sell Penny Stocks FAQs [VIP POST] - Timothy Sykes

How To Short Sell Penny Stocks FAQs [VIP POST]

For the past five years that I’ve been teaching the strategy that had made me a multi-millionaire, people have been confused.

Their brokers says short selling penny stocks is illegal (no it’s not, most brokers just don’t have the tools so they lie instead of admitting their mistake)

Why bet against companies trading at $1/share anyway, how low can they go? (if a company is totally worthless, even 1 penny/share would mean it’s overvalued, $1/share offer 99 cents/share of downside!)

So I’ve tried uploading videos of live trades showing EXACTLY how I make my money…even when I on’t time a trade perfectly.

This was during a live webinar for trading challenge students:

Here’s a confused viewer and my replies:

So confused

‪Hi Tim,‬‬

‪I’m watching your video, “Tim Sykes Makes 30% On A Trade In 30 Minutes“. *Please* help me understand something. I’m sitting here at my computer practically screaming at the screen, “But how?!? This makes no sense!”‬‬

‪During the course of your live trade, the stock for DOMK fell from over $4.00 to $2.29. As the video went on, you said you were making over $3,000. This makes no sense to me, so *please* help me understand what’s going on.‬‬

‪You said at 17:55 that you were in at $4.16, but the price of the stuck just fell until $2.29, but you made over $6,000 total on the trade. ‬‬

‪I have a tendency to over-think things sometimes, but it seems counter-intuitive to make money on a stock that’s falling. How were you making money during this crash?‬‬

‪Btw, I signed up for your millioniare’s challenge a couple days ago. Sorry for the long-winded question.‬‬

‪Matt R.‬

I get this question a lot as most people don’t understand short selling.

I told Matt to go signup at http://timothysykes.com/plans and start digging through my 1,000 video lessons, most of which deal with short selling.

He should also go watch my DVD called ShortStocking, which we just recently put online streaming HERE.

In short, pun intended, short selling is the practice of making money on falling stock prices.

Have you heard the saying, “don’t sell yourself short” which means don’t underestimate yourself.

Well, I enjoy underestimating companies because most of the companies like DOMK are doomed to failure and thus their stock price will inevitably crash.

The best time to short sell an inevitably failing company is when their stock price is high, usually in the $3-5/share, after having been pumped up by men with spam as I spoof in this video “You Can’t Handle The Pump”

Here’s another video in which I play a promoter confessing his sins to a priest about promoting worthless companies…I mention 77 tickers in this video, all of whose stocks have crashed 90%-100% since they are worthless pumps that were pushed higher by promoters who pitched bullshit stories to the most naïve people in the world who don’t know any better.

People like Matt.

Now I’m not knocking Matt, I too was once ignorant about stocks, but that’s what I teach, how to make money from these pumps, sometimes buying them early in the pump, but I’m far better at short selling, or betting against them, when they exhibit indicators that the pump is over and the dump will soon commence.

How is short selling possible you ask?

Easy – instead of buying let’s say 1,000 shares of a company whose stock you think will rise, you short sell, or take a position of -1,000 shares, in the company whose stock price you think will fall.

Short selling involves selling shares you don’t own so in essence, you’re taking out a loan from your broker who is willing to give you those -1,000 shares when they have shares available to short.

This is why you need the right broker so please please please read this list of my favorite brokers for short selling http://tim.ly/shortbrokers as if your broker is not on that list, most likely they won’t have shares to short of any pump and you won’t be able to short sell.

So how do you make money with short selling?

Remember basic math: a negative times a negative is a positive… -4 x -3 = 12

So, if you’re right about a stock price dropping let’s say $2/share as was the case with DOMK from the $4s to the $2s in less than an hour when the pump was over and the dump was on, if you had a position of -1,000 shares you’d have made roughly $2,000…

-1,000 x -$2/share = $2,000 profit

See how fun math can be!

And I actually suck at math, but I know the basics…I made money on DOMK because I correctly shorted when the pump was high and then covered my negative position when the stock price was lower.

I didn’t time it perfectly, but I did make 30% on my money within 30 minutes, and I had had a massive short position the previous day so I coulda woulda shoulda banked tens of thousands of dollars.

The good news is this pattern happens time and again so sometimes I’ll mess up, sometimes my brokers won’t have any shares to short, sometimes I’ll only be able to borrow a few thousand shares to short, but if I stick to the rules I teach in these 7 free video lessons http://tim.ly/sykes7 I make money nearly every time…my winning percentage on trades is over 80% in the past year and I am by no means focused on trading as much as I used to be given my now 2,000+ students who take up the majority of my time.

Watch these videos of some other live trades on my Youtube channel of my short selling some penny stock pumps and begin to understand that my $3+ million in career trading profits are a result of over a decade of my profiting from this very simple and predictable stock market pattern…usually just making $2-3,000 per trade so it’s IDEAL for people with small trading accounts of anything under $100,000.

(you may ask why I teach this strategy and not just keep such a consistently profitable strategy to myself, read this post listing all the reasons why I’m a teacher and why other trading “teachers” in forex, options, etc. absolutely suck…hence why I’m not afraid to show EVERY trade and why my students have now made $7+ million in the past few years, every trade detailed on Profitly)

Posted in Short Selling Penny Stocks

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2 comments

Timothy Sykes

Hey Everyone,

As many of you already know I grew up in a middle class family and didn't have many luxuries. But through trading I was able to change my circumstances --not just for me -- but for my parents as well. I now want to help you and thousands of other people from all around the world achieve similar results!

Which is why I've launched my millionaire challenge. I’m extremely determined to create a millionaire trader out of one my students and hopefully it will be you.

So when you get a chance make sure you check it out.

PS: Don't forget to check out my free Penny Stock Guide, it will teach you everything you need to know about trading. :)

  1. Chris

    So easy even Tim can do the math! Thanks for getting up at 1am to do the webinar today 🙂

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