Posts Tagged ‘Basics’
How You Can Profit Like The Masters Of Short Selling
Just kidding, 99.9999999% of you cannot. Because the guys Businessweek just featured HERE have banked thanks to the work of their teams of ANALysts who dug through all kinds of filings to find some business glitches (don’t even bother, too many others doing that and they’re a lot smarter than you), hugely leveraged positions (don’t even think about it…while it worked for Soros, it killed Livermore…you are neither) and those that don’t take hugely leveraged short-term bets are all making longer-term bets (even if you’re right, you don’t have the capital to last that long as yearly margin interest is a bitch!)
TIMalerts: 10 Of Your Questions Answered Here!
What is TIMalerts?
All the info can be found at TIMalerts.com, a subscribers-only website–basically for $1/day, monthly ($30) or annual ($297) subscription, you get a daily pre-market watchlist emailed to you/posted on the TIMalerts website, real-time trading alerts throughout the day and access to the discussion threads at TIMalerts.com
Will you be closing down TimothySykes.com in favor of TIMalerts.com?
Hello no! I still want to teach this game to everyone, so I’ll respond and post on both sites. I have a feeling all the hardcore traders will post on the TIMalerts site because the $30/month is near-meaningless to them, but it helps to weed out total newbies/poor people.
Is the morning watchlist the same on both sites?
YES! The difference is TIMalert subscribers get it emailed and see it posted on the TIMalerts.com website at 8am, instead of 9:30am, which is hugely important for shorting because TIMalert subscribers can reserve shares of hard-to-borrow stocks early in the morning and by the time non-paying people try to find shares, often times there won’t be any more shares available to short aka advantage TIMalert subscribers!
What is “reserving shares to short”, how do you do it?
See THIS blog post
How often will trading alerts be emailed/posted?
I have no idea, this isn’t a “one stock pick per day/week” BS scam–whenever I send out an alert, there is a worthy setup that has interested me enough to trade that stock, either long or short and those of you who have my PennyStocking instructional DVD package know it’s best to wait for those ideal setups. Sometimes, like yesterday, I’ll send out 4 alerts, sometimes none. The pre-market watchlist will be sent/posted each morning, but trades and worthy setups are unpredictable. One month in, I’ve sent out 12 trade alerts.
What’s the average trade duration & how many of the alerts will be shorts vs. longs?
Why An American Hedge Fund Book Is For Beginners Too
Got this great review for my book An American Hedge Fund (available on Amazon HERE, Audible HERE and iTunes HERE) the other day so c’mon, you knew I was gonna share it!
Innovative, inspiring, honest…
Tim’s business model is simple - brutal honesty. His book, An American Hedge Fund, is just that, brutally honest. The finance industry is filled with
Yes, You Can See ALL My Trades Here:
By now, somehow I thought you guys would all understand that ALL my trades are open and detailed on the right hand side of this page, the TIMtrades button on the upper right hand side NAV bar or by clicking HERE. Don’t let the buy/sell price fool you, they’re mostly short sales, I simply sell first, then buy back later (for full definition of short selling, click HERE)
ALL my trades are fully detailed and you can debate them, ask questions, whatever, you will understand how I make money–that’s what Transparent Investment Management, TIM, is all about–full transparency (see press release HERE)
And to prove I ain’t lying–as most message board posters and particularly people selling an instructional trading DVD aka PennyStocking and real-time trading alerts aka TIMalerts do–my trading is tracked by Covestor (follow me HERE), a service that taps directly into my brokerage account and verifies all trades–so this isn’t one of the many BS sites where you write down whatever numbers you want, inevitably making yourself out to be great (to you twisted sick fools who do that, you should be ashamed…you learn nothing…nothing!)
For those of you who are new to the site–and there’s quite a few of you–it’s a project that
The Stockster Thinks I Want To “Bring Down Penny Stocks”, Exemplifies Niche Ignorance
Many of us veteran microcrap traders remember TheStockster.com as a great little promo machine for pumping up shitty companies aka great for creating short selling opportunities. Unfortunately Osama bin SEC shut them down, whining about misleading investors. You can read the full complaint HERE, but it’s funny that they singled this guy out for misleading investors as that basically sums up all of Wall Street!
(Yeah I said it, everybody who’s been in the game for more than a few years knows that’s reality…whatcha gonna do Osama bin SEC, shut down all of Wall Street? Nah of course not, you guys are incompetent/understaffed/underpaid/terrorist pricks!) (Newbies/idiots: you really think manipulation is limited to penny stocks? C’mon grow up Peter Pan, Count Chocula–all you gotta do is look at what’s happened with the $330 billion auction rate security market–supposedly “safe”, or marketed that way, investments, which have now become worthless overnight…not to mention all the fraud involved.–to toughen you up)
Anyway, some guy who identifies himself as Mark Groanboom and linked to the new TheStockster.com (supposedly under new management even though it’s currently a blank site) commented on my blog post that talked about 99% of penny stocks being frauds/schemes/scams saying:
Yes, 99% Of OTCBB, Pink Sheet Stocks & Stocks Under $5 Are Scams, Schemes & Frauds
It’s quite funny to see/hear/read some people’s reactions when I say this, which is rather obvious to most. Most big-time Wall Streeters know this—that’s why they don’t voyage down here, most veteran traders know this—that’s why they avoid this sector like the plague, but amateurs, suckers and newbie traders have a hard time believing it.
Because they believe in the goodness of people. Especially polished-presentation-talking businesspeople. They believe people are honest. And fair. And just. Because they are drinking the Kool-Aid these companies so willingly spout day and night.
No.
Down here in the gutter of Wall Street—well, really everywhere too, but especially down here—people are dishonest. They craft lies, exaggerations and misinformation for their own purposes. They hide the skeletons in the closet, stuffing them down, until there’s so many they simply bust through the door. They are not your friends. They are not your family. They are not to be trusted. Even if they are your friends and family. Especially, if they’re your friends and family.
God Bless My Haters, They Help Me Without Even Realizing It
Got this hilarious email yesterday:
Tim,
I think you’re total slimebag. You make money off the worst stocks in the world and the dumbest people in the world. Those chart patterns you’re so proud of are the biggest no-brainers out there. The fact that you think you’ve invented something new shows how dumb you really are. Enjoy picking up pennies the rest of your life dirtbag, you can wash my car any day!
-Your #1 hater
Interview With Lionmaster, Founder Of TheLion.com, And Exclusive Pics Of His Lionness & Cubs!
You guys probly know this, but my favorite message board for microcrap stocks in play, TheLion.com, has been totally redone…before it was just a message board, but superhuman Lionmaster & his robot army (paid for with trading profits) have now launched features like a place to import your own blog and/or setup a portfolio to win…and now even a vastly improved all-in-one message board search feature!
I’m not getting paid to promote him or his site, I’m just a huge fan as Lionmaster’s trading profits blow me and everyone on my site out of the water…I was fortunate enough to interview him so you best listen when da Lion roars (and you gotta respect a fellow trader who writes in partial sentences, yeahhh no formalities here, this is the real sh#@!)…check out the exclusive pic of Lionmaster and family (I don’t think he’s ever shared it before!)
My First TradingMarkets.com Article: Limit vs. Market Orders
Lots and lots of people have asked me about limit vs. market orders so I finally got around to writing a detailed post on the subject. Since this topic extends far beyond that of pennystocking in importance, I decided to publish it on TradingMarkets.com…which is an overwhelmingly solid trading information resource…they liked it enough to put it as their top article with my pic all day Sunday (thanks guys, I’m honored!)…and you can view it HERE!
Hope this helps you newbies out there, market orders are evilllllllllll…more evilllllll than SEC bin Laden…well, actually it’s a toss up.
Why The Pattern Day Trader Rule Proves The SEC Rivals Osama Bin Laden In Terrorism
Yup I said it. While making a nice quick 5+% American profit, or $350ish, in an hour on my LGDI trade a few weeks ago, my blood boiled over due to the missed opportunities caused by the SEC’s pattern day trading rule. And while I’ve attacked it in the past, there was no formal summary post that explained all my key points. Considering how many stocks are in play today and the fact that I am forced to ignore 99% of them, it’s time I unleash this fury.
The formal definition of this inane rule is HERE, and once you read it, you’ll begin to understand why I call it the Reign Of Terror Rule. In fact, I’ve got an entire category devoted to it as I’ve documented each and every time it’s interfered with my trading since I began TIM in November 2007.
Basically, if your trading account is below $25,000—as are the accounts of so many poor people out there—you can only day trade (meaning in and out the same day) 4 times per week. If you trade more than that, you get flagged as a pattern day trader and your account gets restricted because you’re considered evil, as most day traders are believed to be. (Yes sometimes you can trade a few more times than that—since its all rather gray area and the brokerage firms themselves despise this rule—but my point is there should be no limits whatsoever!)
Even though I’ve still got over $500,000 in liquid cash to trade with, I went back to my $12,415 roots specifically to draw attention to this injustice because most people, including industry big wigs, don’t even know about it. After all, the last time I had this little money, it hadn’t been instituted and I’m forever thankful since trading freedom allowed me to get rich.
How To Reserve Shares To Short On Hard To Borrow Stocks
When you wanna short sell these crazy Supernovas like KYUS, PDO and FPP, you gotta grab your shares early in the morning—think 7-8am—cuz everyone wants a piece of the action. Finding shares is the biggest obstacle when it comes to PennyStocking from the short side—especially on spamming pure plays like BSHF and KYUS, but the good news is that the shares are in such demand cuz the odds the stock dropping are so high! After all, it doesn’t take a genius to understand a stock up too much too quickly on fluff news/pumping/stock promotion, offers up some solid shorting opportunities / reversal probabilities. So, if you can’t find shares one day, try, try again as the breakdowns usually occur over multiple days
When I was running my hedge fund, I had a beautiful little thing called “pre-borrows”, at my disposal where I could and did reserve and reuse shares to short from Goldman Sachs (NYSE:GS) and I’d have them for multiple days, or until I canceled this preborrow. For that right, I paid some pretty hefty fee, something like .02 cents/share per day…just kidding, it’s not hefty at all…I woulda paid 25 cents/share if they asked cuz I could and still can sometimes be 90%+ sure of a stock drop.
But now that I’ve given up all the special features that come with running several million dollars—to show you EXACTLY what it’s like to trade with just a few thousand dollars—basic online discount brokers like Thinkorswim—the one I personally use and recommend for shorting these penny stocks—don’t offer such luxuries so each morning you just gotta call them up or go to their site and click the “live chat” window and ask to borrow shares of whatever stock you might want to short that day. Now I’ve learned you don’t even have to place an order right away—you can reserve the shares for the day and ask Thinkorswim to make a note in your account…and then contact them again if and when you want to execute that short sell order.
Very convenient, no risk, no cost.
Before I discovered this little trick, I would place my limit price waaaay above a stock’s current price—as high as my pathetic buying power would allow—so I could go in there and manually change the limit later, but since these stocks are so volatile, sometime my order/s got executed, screwing me bigtime as I literally lost thousands of dollars accidentally shorting MXC and VRML…Ruined my week each time, especially VRML—click THIS link to see that wreckage—very stupid mistakes but good lessons for you guys.
So don’t even risk it, just reserve the shares and look to pounce really only if there’s an afternoon fade to negative on the day…that’s by far the most reliable pattern to short into on these pumped up penny stocks.
What Paid Promotional Stock Mailers Actually Look Like
A few weeks ago, I found a great little message board that focuses specifically on the reporting of paid promotional stock mailers. Shady “companies”, shareholders and stock promoters pay services/professionals to send out hundreds of thousands, or millions (depending on their budget), these wholly absurd/inaccurate promotional pieces, that you gotta learn to love–not detest–cuz they’re dead giveaways of pump and dumps, which are perfect for PennyStocking profits!
Typically great stocks to sell short for quick drops off of multi-day spam-induced spikes and for the long-term, you gotta be careful cuz lately scummy spammer stocks like 4imprint Group plc (FOUR), FORCE ENERGY CORP (OTCBB:FORC) (FORC), Hybrid Technologies Inc. (OTCBB:HYBR) (HYBR), KENTUCKY USA ENERGY INC (OTCBB:KYUS) (KYUS), MAXLIFE FUND CORP (OTCBB:MXFD) (MXFD) and JAYHAWK ENERGY INC (OTCBB:JYHW) (JYHW) haven’t stayed down for very long…even if there’s a 99% certainty they’re destined to fail/have their stocks trade under 10 cents/share.
Here’s the message board creator, Peter Michaelson’s, unsurprisingly similar take on the subject (hard to think of the any of other way) and below that are pics of some recent mailers:
The Beginnings Of The Best Damn Stock Market Glossary…Ever
No matter how much I try to simplify penny stock trading and relate it to the real world, many of you still don’t even understand the basic terminology. So, for you guys, I’ve created TIMterms, a glossary of commonly used concepts and terms. Be warned, unlike the rest of the stuffy narrow-minded finance world, it ain’t boring and you’re damn right it’s opinionated. After all, it’s far better to have the opinion of somebody with a proven track record than the financial journalist wannabes over at Investopedia who often get their facts wrong!
Here are the first 15 TIMterms, eventually there’ll be hundreds, maybe even thousands of them, all inter-connected with plenty of examples Wikipedia-style, and links to alternate definitions and examples (anybody with a blog or website, def. comment on this post as I’ll link to anything worthy) but gimme some time, I’m not rich enough to clone myself to get all my projects done right away…yet. If I’ve done this correctly, you just need to click on the orange folder above each term to be taken to its definition:
1. ANALysts
2. Buying To Cover
3. Compound Annual Growth Rate (CAGR)
4. EBITDA
5. EPS
6. Max Pain
Just Who The Hell Do I Think I Am And Why Should You Care?
It’s astounding how many lazy people refuse to click the ABOUT tab on this site when they want to know more about me. Instead I get anywhere from one to three dozen daily emails asking me—since I have an answer every email policy, I’m beyond tired of this. Guys, chicos, if you want to know how I got started, what kinds of stocks I trade, how I made so much $ so quickly, my life is an open book—literally–An American Hedge Fund. Hopefully this post can save me a few emails so here’s a quick rundown of my journey and how I’m gonna help you:
-My obsession to become the best tennis player led to a career-ending injury senior year of high school in 1999. Since I’d already gotten in to college early and the doctors orders were to rest, I had nothing to do so my parents gave me control of my $12,415 in Bar Mitzvah gift money to play around with and I opened a discount online brokerage account.
-My parents thought I’d lose everything, but after concluding all the most popular stocks were too expensive / random for me, I became a penny stock day trader and turned my little account into $2 million by the end of 2004 (no leverage used). The first $1 million was pretty much all buying breakouts (I focused on chart patterns, little did I know why the charts were so perfect), the second $1 million was pretty much all short selling (when I discovered their charts were perfect for a reason, manipulation!). (Trades, strategies used and lessons learned are all detailed in my instructional DVD PennyStocking)
How To Short Sell aka What Is Short Selling
With all the time I spend scouring the landscape for ideal trades, preaching against random market noise and for disciplined trading, I often forget to explain the bare bones basics. Starting now, this will change—every few days I’ll have a detailed lesson. Today, I write about my all-time favorite trading strategy: short selling, which involves betting on a drop in an investment’s prices.
So, how does this backwards-sounding strategy work? Ever hear the saying “don’t sell yourself short”? That means don’t believe you can’t succeed at something. Well, in short selling, that’s exactly what you’re doing—betting that xyz investment won’t succeed at increasing in value. Whether you’re betting against a stock, currency or commodity, you’re “selling that investment short.”
Short selling is exactly like buying and selling the way that you’re only too familiar with except the order is reversed—you sell before you buy. The old adage “buy low, sell high” still applies, here it’s just “sell high, buy low”. What’s worked for me is to short sell when a stock goes up waaaaay too high waaaay too quickly on waaaay meaningless news and buy it back when reason pushes prices lower, back to reality.
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| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| July 23 | MKTY | $4.73 | $5.40 | $187 |
| July 22 | MKTY | $4.10 | $4.28 | $240 |
| July 21 | ZYXI | $3.03 | $3.18 | $130 |
| July 15 | MNLU | $6.37 | $6.73 | $340 |
| July 11 | IDAE | $2.27 | $2.49 | $630 |
| July 8 | ERII | $11.29 | $11.00 | $162 |
| July 3 | TGC | $2.14 | $2.39 | $471 |
| July 2 | HYGS | $2.15 | $2.29 | $260 |
| July 2 | TGC | $3.44 | $3.49 | $80 |
Total: $22,457 (
81%)
