‘The Wolf of Wall Street.’ Jordan Belfort.
In his heyday, he made around $1 million every week. Unfortunately for him and his investors … it was all a huge scam.
In 1999, he pleaded guilty and served 22 months in prison.
These days, he runs a podcast, so I sat down with him for an hour to talk about my market strategy.
Here’s the video …
This guy perfected the pump and dump. Pump and dumps I’ve been riding for over 20 years. I’ve managed to net over $7 million. It’s a few million shy of Belfort’s past fortune. But at least I’m not doing anything illegal. I’d like to keep my freedom.
Nevertheless, I was really excited to share my strategy with Jordan. And even though he made more money than me in the same industry … I got the impression he really didn’t understand the opportunity.
Here are the three things Jordan Belfort learned from yours truly…
Table of Contents
#1: Make Money Legally
You don’t have to pump stocks to make a lot of money.
Belfort ran the operation. That’s why he made so much money. But prison time isn’t something most people like to flirt with.
It doesn’t take a lot of people to pump a stock. And year after year without fail, a few faceless pumpers continue to inflate prices.
I’ve learned how to ride these pumps before they dump.
Jordan raised concerns about liquidity and feasibility. They’re good concerns. Some stocks are too illiquid to trade. My shares could get stuck and I might not be able to exit.
But that’s why I only focus on the most liquid plays. Stocks that trade more than 1 million shares per day (this measurement is called the volume).
And usually, the higher the trading volume … the higher the spike. So it’s a win-win.
#2: How It Works
He asked me, “how does it work?”
The king of pump and dumps spent so much time running the show, he never took time to analyze the price action.
If he did, I’m sure he’d notice a repeating pattern.
I call it the 7-step framework.
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That’s what’s so beautiful about this niche. I trade the same patterns over and over again. Once I find a stock that fits the pattern, it’s game on.
#3: Can Anyone Do This?
Jordan wondered if these patterns can work for any stock. And why isn’t Wall Street trading the same setups?
The patterns work on higher-priced stocks, but the movements are so much smaller. I trade stocks below $5 because they can spike hundreds of %.
The stocks Wall Street plays usually only move about 10% in a day. Sometimes even less.
But Wall Street won’t switch to my stocks for two reasons:
- Pump and dumpers, like Jordan Belfort, give low-priced stocks a bad rap.
- Hedge funds trade billions of dollars. There’s not enough room in this niche for position sizes that big.
It comes back to liquidity.
A trader with a small account can turn a couple thousand into a few million. But it’s much harder for someone with a few million to make a billion.
Join With a Small Account
Over the last few years, the number of small account traders I’ve seen become millionaires has increased exponentially.
It’s because there’s more opportunity in the market.
COVID and Biden’s stimulus checks introduced a whole new generation of traders. And that means there’s more money moving with more opportunity.
Plus, more traders have access to the resources required to profit effectively.
There’s been a huge barrier to entry for small account traders. But not anymore.
Until next time,
— Tim
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