Why SmallCap Stocks Rock: Logarithmic vs. Linear Charts

Posted by timothysykes on Mon 7th of Apr, 2008 09:28:32 AM

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Commenting on this post, I asked The Chairman why pros seem to prefer logarithmic—or log—charts over linear charts since they distort my precious chart patterns. His answer: it’s the linear charts that distort.

While he’s absolutely right that log charts like this:

logcoin

are more accurate than the linear version:

lincoin

since they better reflect % increases/decreases rather than absolute ($) gains, I’m right that linear works better for smallcraps and microcraps. Two simple reasons:

1. The vast majority of microcrap and smallcrap investors are total morons. They can’t understand it’s infinitely more difficult for a stock to run from $2 to $8 than it is to run from $6 to $12 (400% vs. 100% runup even though both lead to $6/share gains)…they think only in terms of $ gains (to see what they can afford at Costco)

2. When trading these POS stocks, log charts mask how steep multi-day runups like COIN are (since they’re better at showing the long-ter picture)

My trading is based on judging how others—the morons who influence/cause PennyStocking—in my niche think and act, so I’ll keep using these more primitive linear charts…another reason microcrap and smallcrap trading rocks as compared to trading the more scalable/liquid/competitive/tougher aka less predictable niches the big $ prefers.

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Who Is Timothy Sykes And Why Should I Care?

See Tim's full bio HERE. Tim turned a few thousand dollars into a few million by taking small gains time after time on hundreds of volatile penny stocks, discovering that his trading strategy, while consistently successful, works best for those with smaller accounts.

Determined to teach others this PennyStocking trading strategy (learn more HERE), he went back to his original $12,415 roots (already $27,000 even though the stock market is down 20%!) to show everyone how to turn thousands into millions, even while having a life (somewhat) and making plenty of mistakes.

How Can I Consistently Make Money In The Stock Market?

Hard work, Determination and Know How.

Hard work to learn how the greatly misunderstood niche of penny stocks provides opportunities every now and then on which you should pounce.

Determination to seek those probable profits out and know how in order to actually profit from them.

Long story short, wait for stocks that are extremely volatile - for whatever reason - and then aim to take small profits (between 10 and 50% within a few hours, days or weeks) here and there, either from betting on higher or lower prices (yes, you can make $ betting on lower prices, it's called Shortstocking (learn more HERE).

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As Tim explains in several ALL-NEW instructional DVDs (see them HERE) and in over 900+ blog posts, penny stocks are the most hyped and corrupt niche in the entire investment world. These two qualities make them the easiest to profit from (legally) because the vast majority of people who play penny stocks are suckers and all-around ignorant people. If you have any intelligence whatsoever, you have a clear advantage and it's like playing basketball against mental midgets.

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