7 Signs You’re Being Scammed Out of Your Money

By Timothy Sykes

Last updated on February 2, 2021

You know what I hate? I hate seeing my students being ripped off…like they were here

I hate seeing their excitement for the possibility of building generational wealth through trading being squashed by so-called “gurus” who scam them out of their money and they lose everything, including faith in themselves that they can actually make it one day.

And I hate hearing that people with no real-world trading experience – let alone any real success – are out there conning gullible students into wasting their time and their money…which is why I LOVE showing ALL my trades HERE and posting my tax records/audits.

I’m far from being the best trader in the world, but I have made millions and show EXACTLY how I’ve done it in a transparent way, which is what I believe ANYONE you’re wanting to learn from should do

I’m on a mission to change this shadow industry where everyone claims to bank, but refuses to back it up by showing real trades, statements and tax returns.

It’s also important to understand I can give you all the information in the world like these free penny stock video lessons, but it’s up to you to learn to recognize and advice all the different ways you can be ripped off:

Scam #1 – You buy into a promoter’s hype

I’m guessing most of you reading along at home thought I was going to start this out with a tip on how promoters are scamming you out of your money and that you should avoid them at all costs.

That’s just not true. I hate that people sometimes fall for promoters’ hype, but the thing is, they can actually be useful if you know how to play their tips. I’ve done it, and my students do it every day to capitalize on the run ups (and inevitable crashes) penny stock promoters create.

Where I see people getting into trouble, though, is when they start believing a promoter’s hype. The genuinely believe that the “hot tip” they got in a mailer over the weekend is going to be the next Google – and that they’re able to get in on the ground floor.

Newsflash – if you’re getting a mailer about a stock, the ground floor has long since passed you by!

The real truth is that 99.9% of all penny stocks will go to zero. They’re worthless companies! If they had the qualifications to trade on the NYSE or the AMEX, they’d be there – not floundering on the OTCBB or pink/grey sheets.

Promoters laugh when people take their recommendations and buy into their hype. They’re literally sitting there, laughing at you.

Don’t give them the satisfaction.

Scam #2 – That press release you’re reading is a blatant lie

When a legit company wants to go public, there’s a big process they have to go through. They have to file reports with the SEC, and they have to go on “IPO roadshows” to find bankers and investors who are willing to set their valuation appropriately and approve the initial release. Basically, they have to prove that they’re legit.

You won’t see that with penny stocks.

Companies on the pink/grey sheets are there because they can’t meet these criteria. That doesn’t mean there isn’t value in trading them – you just have to be aware of what you’re getting into.

Because many companies on these bottom-rung exchanges don’t file with the SEC, there’s virtually nothing that keeps them from lying to your face.

That press release you saw boasting a penny stock’s big revenue gains? That news article talking about its upcoming merger?

They could be real stories – or they could be blatant lies.

When you’re trading penny stocks, stick to the patterns. Don’t buy into the hype and don’t let yourself be swayed by false information. Know what your rules are and what setups you’re comfortable trading on, and stick to those alone.

Scam #3 – Your penny stock is just a paper company

Here’s another fun one…The penny stock you’re looking into might not be a company at all – it might be a paper company set up in name alone!

Paper companies get set up all the time, for tons of different reasons. One you’ll want to be aware in particular of is the reverse merger.

Remember how I told you how much of a hassle it can be for a private company to go public? Some of them skip the process altogether by merging with a company that’s already listed on an exchange.

That’s why there are so many penny stock companies that exist on paper only – they’re just sitting there, waiting for another company to come along and merge with them.

Telling these types of stocks apart from actual companies can be tough, but if you follow the patterns and setups I’ve identified over years of trading, you’ll know what to look for.

Scam #4 – You’re using more leverage than you can afford to cover

Let me be totally clear on this one – I hate leverage!

I’ve been trading for more than fifteen years, and I’m still never so confident in a single trade that I want to tie up somebody else’s money in it.

Using leverage is big with institutional investors and FOREX traders – some of whom use 100 to 1 leverage from their brokers.

Can you even see how big of a risk that is??

Say your brokerage lets you bet $1,000 when you only have $10 in the bank. If your trade busts – and 5 out of 6 FOREX traders will blow up within 6 months – you’re going to be on the hook for those losses.

I’ll take the slow and steady wins I can get with penny stocks every time, compared to putting that much on the line!

Scam #5 – You get tricked into playing markets where you have no advantage

Another really terrible investing scam I see students falling into all the time is getting into market plays where they have absolutely no edge.

FOREX is one of these “opportunities” (do you really think you know more about financial currencies than people with the inside scoop on foreign relations??), but it’s not the only one.

American depository receipts (ADRs) and mergers and acquisitions (M&A) are two other types of investing plays where big-deal traders have an advantage you never will.

Just take M&A trading. A lot of wanna-be investors think that if they get a hot tip about two companies that are planning to merge, they can get their trades in early and come out ahead on the deal.

News flash – even if you were able to get in ahead of everybody else (which you won’t, since financial insiders can swoop in on these deals well before your trades will ever be executed), do you really think your investing choices will be smarter than the Ivy League grads and computer algorithms that sit around working these kinds of trades all day, every day?

You’re not – and anybody who tells you that these are good ways for normal people with small accounts to get rich is scamming you.

Scam #6 – Another trader is playing with the stock

I’d be lying if I said penny stock traders’ reputation as the “low lifes” of the investing world isn’t always undeserved.

One of the truly frustrating things about working in this type of market is that you run into instances where another trader is playing with the stock.

Maybe he sells a big chunk of shares to get other investors to think that something’s going on. Everybody else sees the movement, thinks the stock is crashing and rushes to get out – playing right into the series of shorts he’s setup.

Sometimes it’s even more complicated than that. Remember when I told you about Joseph Dondero? He took this type of manipulation to the next level by layering tons of phony buy and sell orders on top of each other get people to act.

penny stock checklist

Some of these scams are obvious, but a lot of them aren’t. So how can you protect yourself?

Trust your research and your rules. Do your homework, and base your expectations for the stock’s performance on what you’ve learned and the patterns you know.

If things don’t go the way you expect? It’s still better to get out quick and cut your losses than to stay in and get taken advantage of by a scammer.

Scam #7 – Following a teacher with no real-world trading experience

I’m going to let you in on one of the internet’s dirty little secrets…

Anybody with a blog and a few stock charts can call themselves an expert. They can grab a few images of “their” sports cars and mansions from Google, pair them with a few bogus stock picks and get gullible students to sign up for their “expert mentoring” programs.

I’ve seen it time and time again – and it really pisses me off.

If you’re going to seek out a stock trading mentor (and I definitely recommend that you do from this list), you’ve got to go with somebody who has a proven record of real-world trading experience.

There’s a few different things you can do to separate the real traders from the scam artists, but one of the easiest ways to do that is to simply look at their trades.

Think about it… If that “guru” you want to learn from doesn’t show you their trades, how can you tell they’re for real? Honestly, they’re probably not. There’s a good chance all you’re dealing with is a bunch of bullshit designed to rip you off.

Don’t get taken advantage of like this!

I put all my trades up at Profit.ly so my students can see what I’m doing and what kinds of results I’m getting. My challenge students even get to watch as I make live trades, so there’s no question of whether the advice I’m giving is legit.

I’m the real deal, but I’m going to put my money where my mouth is. If you want to see what I’m all about, check out my trades, watch the 30 penny stock trading videos I offer free of charge or hear about the success my students have achieved.

If you like what I have to say, I’m here to help turn you into a millionaire. The only thing I’m waiting on is you!


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Comments (1)
Author imageTimothy 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 Trading 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 30 Day Bootcamp, it will teach you everything you need to know about trading.

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