Recently I’ve written posts about up-and-comers like Kyle, Jackaroo, and Dominic. In this edition of the spotlight, I’m featuring my long-time student Tim Lento. Get inspired by Tim’s story and his contribution to the Trading Challenge community.
Table of Contents
- 1 From Student to Mentor
- 2 Tim Lento Spotlight Interview
- 2.1 How long have you been trading?
- 2.2 How did you get started?
- 2.3 How did you come across me and my teaching?
- 2.4 How has my teaching influenced your trading?
- 2.5 When did you join the Trading Challenge?
- 2.6 Your trades are mostly swing shorts of good old-fashioned pump and dumps. Do you trade any other strategies?
- 2.7 How long have you been a full-time trader?
- 2.8 What’s your biggest tip for newbie traders?
- 2.9 Do you still test new strategies?
- 2.10 If you could give any advice to yourself as a beginning trader, what would it be?
- 2.11 Your main strategy is to bet against penny stock pumps. Are there any plays you avoid at all costs?
- 2.12 How much time do you spend doing research and reading promo emails looking for pumps?
- 2.13 You scale in to your short positions. How do you determine your entries?
- 3 Trading Takeaways from Tim Lento
- 4 Trading Challenge
From Student to Mentor
Tim Lento’s been a Trading Challenge student right from the beginning. Now he’s a chat-room moderator, mentor, and teacher. Recently, I had the opportunity to ask Tim a few questions about his life and experiences as a trader.
Before I get to our Q&A, I want to highlight some of Tim’s contributions to Profit.ly and the Trading Challenge community.
Lento in the Chat Room — He Gives as Good As He Gets
He does a great job as a chat moderator. He answers questions and hunts down news about stocks alerted in the chat. Most noteworthy, Tim’s knowledgeable about all the resources on the Profit.ly website. He provides links to video lessons and webinars with answers to specific questions. I’m grateful for that.
During the midday lull, Lento reminds everyone not to overtrade. Sometimes he links to video lesson categories. That way, students can dig into lessons about what they’re seeing in the market on any given day.
(Hint for students: use the low-volume midday hours to study. You’ll be amazed at what you can learn if you make it a daily habit.)
Finally, Tim has a slightly wry sense of humor in chat. That’s good because chat rooms can get a little tense at times. He gives as good as he gets.
Tim Lento’s First 20 Trading Challenge Webinars
Tim presents one of the weekly webinars for Trading Challenge students. When the team and I approached Tim to start hosting webinars, he agreed … And little did we know how much value he’d provide. He spent the first 20 weeks distilling everything he’s learned over 10 years into a step-by-step guide.
Those webinars are available to all Trading Challenge students under the ticker LENTO. If you’re a student, watch them — they cover a massive amount of information. To give you an idea, here are the titles of Lento’s first 20 webinars:
- Trading Terms 1
- Trading Terms 2
- Chart Analysis
- Introduction to Candlesticks 1
- Introduction to Candlesticks 2
- Technical Analysis
- Introduction to Chart Patterns
- Reversal Chart Patterns
- Continuation Chart Patterns
- TOS (Think or Swim) Webinar
- E*TRADE Webinar
- IB (Interactive Brokers) Webinar
- Level 2
- Time of Day
- Trading Strategies 1
- Trading Strategies 2
- Entries and Exits
- Reverse Splits & Low Floats
- SEC Filings
- Other Tools
Tim Lento Trade Review Webinars
Once he completed that massive and comprehensive guide, Tim transitioned to reviewing trades. Since then, he’s been presenting Tim Lento Trade Review webinars each week. These webinars are sooooo valuable for newbies. Even some experienced traders might benefit from a little brushing up on the basics.
How do they work?
Lento keeps track of trades taken by me, the other mentors, and top students who participate in chat. Then, during the webinar, he talks students through every trade for the entire week.
“This is where Jackaroo was buying. The stock consolidated above the morning breakout and he got in here when the volume picked up. He sold into strength here just as the stock hit resistance. That’s the kind of play he likes and it was a good trade…”
He explains news catalysts, price action, chart patterns, and risk levels. Consequently, anyone watching gets an idea of the entire thought process behind the trade. It’s a great way to understand how successful students approach trades.**
And Tim doesn’t just review winning trades. When a top student loses and posts the loss in chat, Tim adds the trade to his weekly list. It’s a healthy dose of reality…
More Awesome Benefits of Tim Lento Trade Review Webinars
Lento also goes beyond reviewing trades. Sometimes he plays back a video lesson if the lesson pertains to a trade he’s reviewing. And he holds a Q&A session at the end of every webinar.
Now you know a little about why I appreciate Tim Lento so much…
… so let’s get on with our recent Q&A…
Tim Lento Spotlight Interview
Let’s do this … the questions are mine and the answers are from the man himself, Mr. Tim Lento…
How long have you been trading?
I started trading the summer of 2009 after graduating from Florida State University with an MBA.
How did you get started?
I started getting interested in trading when I changed my undergraduate major to Banking and Finance. I’d invest $1,000 each in different companies that I used or liked. Needless to say, that didn’t result in much profit over time.
How did you come across me and my teaching?
In the summer of 2006, I moved in with a couple of law students before pursuing my MBA. One of the guys had an HD TV. (This was when HD TVs were fairly new on the scene.) One day, I stumbled across “Wall Street Warriors” on MOJO HD. I was intrigued by your trading. After watching the entire season, I started following your blog.
**WAIT — STOP THE INTERVIEW**
OK, Sykes here … I’ll get right back to the interview shortly because this is about Lento, not me. But I want to clarify a couple of things about “Wall Street Warriors” first…
#1: My entire publishing business started because of that show. I received countless emails after the show aired and then when it re-aired on MOJO. So I’m grateful for the experience.
#2: “Wall Street Warriors” was a reality show. Therefore, a lot of it was staged. For example, in the episode where I kicked over my fan, it took about seven times to get the right take.
I don’t necessarily recommend you watch it. It wasn’t very good. But if you need a good laugh, you can see every episode on YouTube. It’s kinda fun. Pay no attention to my young self except to understand how much I’ve evolved. And remember, reality TV isn’t very real.
**NOW BACK TO THE TIM LENTO INTERVIEW**
Pardon the interruption…
How has my teaching influenced your trading?
Pretty early on, you mentioned a stock on your blog — Hydrogen Hybrid Technologies, Inc. OTC: HYHY. You said the stock was a pump and dump and to keep an eye on it because it would run up before crashing back down to earth.
Around the same time as your post, I received a glossy pamphlet in the mail stating that HYHY was the next big thing. I remember the headline:
“National Gas Crisis!!!”
I kept an eye on it as you said. The stock went from under $1 to $2.75 before crashing, which is exactly what you said would happen. From that moment, I was hooked.
Here’s the chart for HYHY during that pump and dump:
(Note: Hydrogen Hybrid is still an OTC stock, but the shares are basically worthless. The most recent trade price was two one-hundredths of a cent per share — $0.0002.)
When did you join the Trading Challenge?
I’ve been a part of the Trading Challenge since its inception. As you know, I’m currently a moderator in both the TimAlerts and TimChallenge chat rooms on Profit.ly.
Your trades are mostly swing shorts of good old-fashioned pump and dumps. Do you trade any other strategies?
I’ve been doing some long-side trading the past year in my IRAs with mixed results. I’m testing and tinkering. I’ve mainly got it down to playing the morning big percent gainers with a catalyst and a nice chart set-up. Mostly within the first hour.
How long have you been a full-time trader?
Since the summer of 2009. I had to go back to work for a year and a half, from December 2010 to June 2012, after I lost most of my first account. But I’ve been full-time ever since.
The Trading Challenge students and I know the Tim Lento we see in the chat room every day. We know the Tim Lento who hosts weekly webinars. Tell us something we don’t know about you.
I’m a pit crew member on a NASCAR Whelen Modified Tour team. We run close to 20 events a year all across the Eastern seaboard. I’ve been involved in sports my entire life, so it’s fun to be on a team and still be in competition. I share my experiences under TimLentoRacing on social media.
What’s your biggest tip for newbie traders?
Take the time to learn first — don’t rush into trading right away. I thought I could just fund an account with $25,000 after grad school and set the world on fire. I had so many bad habits back then, like trading too many different types of plays and bag holding. Take the time to learn and ease into it. Otherwise, the market will make you pay another way.
Do you still test new strategies?
Yes, I focused mostly on OTC plays in the past. I’m working on trading Nasdaq stocks. They’re a little different — there’s something more behind the company to get listed. “Real” companies trade differently. That’s not to say they stay in that category. But while they’re on the Nasdaq, you have to treat them differently than OTC plays.
If you could give any advice to yourself as a beginning trader, what would it be?
Study and don’t be stubborn. Focus on strategy.
Your main strategy is to bet against penny stock pumps. Are there any plays you avoid at all costs?
Yes, I don’t trade higher-priced stocks.
How much time do you spend doing research and reading promo emails looking for pumps?
Not very much. I mostly read through the chat — other traders alert stocks there. By the time something is ripe to short, I’ve usually found it.
You scale in to your short positions. How do you determine your entries?
I determine how high I think the stock will go based on the promoter, share count, and promoter compensation. I scale in according to that price target. If it dumps sooner, I make much less money. No big deal.
Trading Takeaways from Tim Lento
Actually, I want to start with a non-trading takeaway…
- Find a passion outside of trading. For me, it’s charity. For Tim Lento, it’s car racing. (Who would’ve guessed?) The point is that you need to have something other than trading in your life.
- Study history to prepare for your trading future. Lento’s primary trading strategy is still short-selling pump and dumps. The HYHY chart he shared doesn’t look so different from many charts these days. I’ve been teaching about pump and dumps for years. Check out this video, and you can see what I mean:
- Take time to learn first. So many people want to get rich quick. Trading is not a get-rich-quick scheme. Study and practice first. Practice with paper trading. When you start trading with a real account, take small positions using a small account. You WILL lose. Use every trade as part of your education. My goal is for you to lose as little as possible as you learn.
- Be willing to test new strategies. Lento’s been trading pump and dumps for years. It’s his bread-and-butter play. But due to the fact that the market isn’t static, he’s testing and perfecting new strategies. That’s smart.
I want to give a big congratulations to Tim Lento for all his success.** I also want to say thanks because he puts up with a LOT in the chat. And he’s an excellent teacher and mentor.
My final take away from Tim’s answers today: learning to trade is a process. Tim’s been with me as a Trading Challenge student since the beginning. He understands the value — not just in the video lessons and webinars, but also in being part of the community.
Come on traders, give Tim Lento some love. Leave a comment below and let Tim know what you’ve learned from his interview that you can use today!