Category Archives: Basics

What Are Stock Patterns?

What are Stock Patterns

What are Stock Patterns?

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Also, grab this Profitly sale HERE and message me HERE if you want a deal on Dux’s new guide!

I drill the need to focus on only the best stock market patterns to my trading challenge students every single day so that begs the question, what are stock patterns, exactly, and why do they matter? Continue reading

What Are Penny Stocks?

What are penny stocks

What Are Penny Stocks?

I LOVE reviewing the basics over and over and over again, see my free guide to penny stocks here, but what are penny stocks exactly, and how can you stand to earn from trading them?

Here, I’ll offer a brief primer of the basics, as well as invaluable information about how my millionaire trading challenge students and I have personally found success with penny stocks.

This is vital information for new traders, but it’s also a great reminder for more established traders. This overview is also a great preparatory read before you delve into my FREE e-guide: Penny Stock Trading 101. This guide will take you from the basic question of “What are penny stocks?” and well beyond so be sure to study it meticulously!

To be clear, despite the entire world hating on this niche, I have made my millions by trading penny stocks. The Tim Sykes Millionaire Challenge was designed as a means for me to teach others how I did it, in hopes that they can find their own success and in just a few years we already have several millionaires created and they actually help me mentor other students now too! I really do believe that this can be a method of earning income that can help people improve their lives and make their dreams a reality, but to do so, you’re going to have to study harder than you ever thought possible as no matter the niche, never forget that 90% of traders lose money and it’s due to lack of preparation!

What are penny stocks? You may be surprised to learn that penny stocks rarely actually cost pennies. “Penny stock” is a catch-all term for low priced stocks, typically under $5 per share. They are VERY lowly priced because the companies in question are small. They usually only have 1-2 products and are not making huge profits.

Actually, most of these companies will never begin to turn big profits. The majority will likely fail.  Wait: if most of these companies are going to fail, why on earth would you ever trade penny stocks? As I teach students of the Tim Sykes Million Challenge team, this risk factor is exactly what can deliver rewards.

Why are penny stocks so little-known? In general, penny stocks are lesser known than stocks traded on the big national exchanges. In part this is because the companies are smaller; however, it’s also because in large part, investors are disinterested in penny stocks.

Additionally, these stocks aren’t always listed on the national exchanges like the NYSE or NASDAQ, either. Rather, they are offered via other markets, such as Pink / Grey Sheets, OTCBB (Over-the-Counter Bulletin Board) and the NASDAQ Smallcap Market. These exchanges have varying degrees of regulation for company reporting, but in general are not as stringent as the major exchanges. Because of this, there is an inherently higher level of risk involved in trading, and it’s vital to do your own research on the companies.

The fact is, very few of these “long shots” will get lucky; as previously noted, many of the companies will fail. As such, many investors don’t like the odds and steer clear, choosing to focus more on safe bets.

Why trade penny stocks? Interestingly, it’s these negative points about penny stocks that can actually be some of their greatest selling points.

Since many investors are disinterested in penny stocks, this allows traders like me (and you) to get in there and trade with FAR less competition than anywhere else in finance. That is to say: the same volatility that is a turn-off to so many investors can be an opportunity for other investors.

The caveat here is that as a penny stock trader, you must know that there is an inherent danger to trading penny stocks. Respecting this risk, and doing all you can to mitigate it, is very important. This makes it extremely important to learn the “rules” and study carefully so that you can make educated and calculated trades. If you don’t take the time to learn, you will likely lose money and get discouraged quickly.

Benefits of trading penny stocks. The benefits of trading penny stocks can be many. For one, there’s an easy entry into the market. For new traders with small accounts, penny stocks are accessible both in price and the ability to buy and sell. You really just need a brokerage account and a laptop, really. My top student really did start with just $1,500 of his money as this article highlighted.

Trading penny stocks is a profession which rewards routine and regularity and punishes those who get too cocky or lazy. I am constantly urging my students to be diligent about studying and preparing, learning how the market works, and keeping track of what is working for them. As you improve in your trading technique, chances are you’ll reap rewards in your career.

Additionally, trading penny stocks allows for flexibility. You can trade from anywhere. As you can see by my social media feed, I work from a laptop and have taken trading to all sorts of far flung destinations.

How did I become a millionaire? With such low priced stocks, how did I become a millionaire by trading penny stocks? By adding up my gains over time. Honestly, my average profit per trade is just $2,000. However, these trades add up. If I am making $2000 per trade over time, and make 1,000 trades, after a while I’ve earned $2 million. I never feel the need to go for the home runs; I’m content taking the singles, since they win the game and help me make steady income over time. 

I’m not always right! I feel like it’s important to say that I’m not always right in my choices for stocks to trade. I’m wrong about 30% of the time, but the keys are that I keep my losses small, and I learn from my mistakes, never letting small mistakes turn into potential big disasters.

I like to emphasize this again and again because many traders become discouraged at early losses, but they shouldn’t as it’s something you’ll have to learn to deal with and minimize over time. Losses don’t have to mean that you’re failing. They are part of the process. As long as you minimize losses and learn from them so that you can approach succeeding trades differently, they can actually become your greatest teacher over time!

What are penny stocks? For some, they can provide an opportunity to make income. Trading penny stocks is not for everyone. It requires patience, prowess, and determination. You have to be willing to learn how the market works and be ok with some bumps in the road as you learn. But if you stick with it, trading penny stocks can be a potentially life changing career move.

Did this article help you understand penny stocks a bit better? Leave a comment and let me know if you would like more basic posts like this, I think they’re EXTREMELY useful, but you tell me what you think!

What’s The Difference Between An Investor And Trader?

what is a stock

The Difference Between an Investor and Trader

It’s good to review the basics over and over and over and over again, so I cannot encourage you enough to read and review my free stock market guide here and understand that despite beginning with just a few thousand dollars each, ALL of my millionaire trading challenge students have become millionaires within a few years**…not the decades that would be required such feats if they were investors.

As for the question at hand, there’s a world of difference between an investor and trader. When talking about how your money can make more money, the words “investor” and “trader” are often used interchangeably, but they most certainly shouldn’t be. Continue reading

11 Ways To Trade Penny Stocks

Ways to Trade Penny Stocks

What are some of the ways to trade penny stocks? This is a question I am asked a lot, and honestly, there’s not just one answer and that’s why my millionaire trading challenge students are taught not just by me, but also by several of my top millionaire students too as we all have slightly different patterns that we prefer to trade.

However, there are certain tips that can prove helpful to just about any trader. Here are some of my favorite ways to trade penny stocks, ranging from specific and tangible tips to mental games to help improve performance.

1. Don’t believe the hype. If you do a little research about the best ways to trade penny stocks, you’ll find plenty of stories about how so and so struck it rich in weeks. While reading about someone’s success and how they made a fortune in penny stocks is great if it inspires you on your own journey, you should never take these stories at face value.

In spite of what some so-called penny stock “teachers” will tell you, it’s highly unlikely that you’ll get rich quickly trading penny stocks. Many who subscribe to that mentality are really just going to be gambling with their trades, rather than actually having a targeted plan of attack…read this key article to understand the dangers of hoping and not strategizing. Continue reading

What Is Market Capitalization And Why Should You Care?

What is Market Capitalization ?

What is a stock’s market capitalization? Why does it matter? Market capitalization is the value of a company, largecaps being worth tens or even hundreds of billions of dollars, midcaps being worth a few billion or even “just” $1 billion whereas smallcaps, which my top millionaire trading challenge students and I mainly trade, are companies valued at under $500 million, usually under $250 million which sounds big, but is actually small potatoes on Wall Street. Continue reading

How You Can Bank $2,000-$100,000 In An Hour [ MUST WATCH VIDEO ]

must watch video

[ MUST WATCH VIDEO ]

TRUST ME, I KNOW HOW RIDICULOUS THE TITLE OF THIS BLOG POST SOUNDS, BUT IT’S REAL SO JUST HEAR ME OUT. It’s a MUST WATCH VIDEO

Sorry for the all caps, my caps lock was on, but I’m going to keep it that way because this same damn pattern will happen again and again and if you’re prepared like my top trading challenge students and I were, you can make four, five or even six-figures inside of an hour, depending on how big your account size is.

Because as all my Millionaire trading challenge students and I have learned, that’s the beauty of my strategy, it’s the same patterns every time, you just choose how big you want to trade it…and this past week we had SEVERAL opportunities to make six-figures inside of an hour on either the long or short of some of these volatile penny stocks like GERN.

Download a PDF version of this post as PDF.

I HIGHLY encourage you to save 50% off on the pre-sale price of my newest guide HERE as this one specific pattern is outlined in detail again and again and again!

Watch the video below and learn, and watch it several times if need be…we’ve also transcribed it for my valued deaf trading challenge students too: Continue reading

What is an IPO?

What is an IPO

What is an IPO?

A lot of people ask me, ” What is an IPO ?” IPO stands for initial public offering. So, as I’ve talked about, stocks are something just to basically, trade very quickly to try to grow your account. An IPO is very different, where, a company is becoming a stock for the first time. It’s becoming a public stock. Initial public offering. So this is where a private company has just been existing in the private world, where you don’t know the exact revenues, you don’t know the profits, it’s been a very, kinda, private creature. Now, it is coming into the public territory where they’re gonna have to publicly report their earnings their profits talk about all of their future plans. It’s all very public because now they have public shareholders.

Download a PDF version of this post as PDF.

So an IPO is something that the public as a whole can invest in. In the past, it was very private, maybe a small group of people, maybe a very small group of funds or the big investors. So this is kinda like the grand opening of some movie premier. The IPO is the movie premier of that company. And they usually build it up.

If you’ve ever seen movie premieres, or if you watch entertainment tonight, or if you see rotten tomatoes, when a movie comes out, there’s all kinds of critiques about movies, good or bad. An IPO is the same exact thing, with companies. When there’s an IPO, when they first step out onto the public stage, a lot of people have expectations. Sometimes the companies match up, sometimes they don’t. The stock price is gonna go up or down based on expectations. Sometimes companies come in with a lot of hype. They become public after they’ve been private for a very long time, like Facebook. Facebook was a very popular internet company. They came public, the stock was up a lot, and guess what, over the next three to six months, it crashed, 50%, because expectations were too high. It took them roughly another year or two to really boom once they started growing their mobile advertising revenue, which wasn’t part of the story right when they IPO’d. So an IPO is just one specific date when a company first becomes public. The company is a living, breathing organism so it’s gonna change over time. Sometimes, it’s gonna get better. Sometimes, it’s gonna get worse. But the IPO is one moment in time when the company decides, “Hey, we’re not gonna be private anymore. We’re gonna be public.”

Why would you want to be public? Why would you want all of these public shareholders? Why would you want all this responsibility? Because companies need cash. An IPO is all about raising money. So a company puts on a whole roadshow. They go all over Wall Street to many different banks and many different hedge funds and mutual funds and they present themselves. They say, “Hey, this is what we’ve got going on, this is our technology, this is our product, this is our management.” They’re basically putting on a whole show trying to raise tens or hundreds of millions or maybe even billions of dollars for their IPO. And depending on how successful these roadshows are, that’s how the IPO gets priced. So sometimes a company sets out to, let’s say, raise 60 million dollars. So they’re selling, let’s make it easy in this hypothetical example, 10 million shares at six dollars per share. So if their roadshow is successful, before the IPO, and everyone wants to invest, they sell all 10 million shares at six dollars a share. Boom. The company has raised 60 million. Then the company IPO’s, that’s their grand opening on the stock market, and the stock can go up or down based on the expectations of how they’re doing.

Again, if a company comes in really hot, let’s say, they have some new mobile technology that everyone’s gonna need on their phone. And they raise 60 million dollars now so they can actually execute their plan. The stock opens at six dollars a share, but immediately surges to 12 dollars a share, ’cause the public is so hungry to invest in this technology now that they’re an IPO, they finally can. Or, maybe the company–eh–not such a great roadshow, maybe they raised the 60 million maybe they actually have to lower it. Maybe they tried to raise 60 million in 10 million dollars at six dollars a share but the bankers aren’t buying their story. So they can only sell eight million shares at five dollars a share. And so they raise 40 million instead of 60 million. That would be a failed roadshow. They still get 40 million, but they wanted to raise 60 million. So if the IPO opens down, then you know that the roadshow wasn’t very well perceived. So it’s kind of important to see exactly what the stock is priced at for the IPO, and then also see how it’s trading in the aftermarket. Institutional investors, bankers, mutual funds, hedge funds they’re theoretically sophisticated investors. Even though statistics say otherwise, like they’re not that good. But, if a roadshow is successful, then you can kind of rely on that roadshow and say, okay, the bankers did their due diligence; it’s a quality company. If the roadshow is a disaster…guess what? Sometimes companies even pull their IPOs. Let’s say they’re trying to raise 60 million, they’re trying to raise 40 million, they can’t convince anybody to invest even 10 million. That would be a big embarrassment so they pull the IPO. And they don’t go public. That’s happened.

There’s all kinds of different IPO’s: hot, cold, everything in between. Sometimes a company like Alibaba IPO’s, a giant company, and everybody wants in on the IPO. They don’t even need to do a roadshow, people are begging to get in. And when the stock opens on the stock market publicly for the first time, the stock doubles the first day. That’s when the IPO is very hot. So, for me, I don’t like trading IPO’s right on the first hour or the first day, I know it’s really exciting, but for me, I like stocks when they’re breaking out of past ranges and past charts. If it’s the first day, there is no past. So it’s kind of like gambling. And a lot of people love trading that gambling stuff, they love IPO action; it’s very volatile, like, “What is the company worth?”

For me, I don’t like the volatility as much as I like security and predictability. So I usually stay away from IPOs. Definitely at the market open, maybe if a stock is trending decently and maybe breaks the day high in the afternoon, then I might buy it because then it might be a technical breakout. But for me the IPO is just the first start. Then I have to see how the company trades, I have to see how the chart pattern plays out, because then, I have my favorite chart patterns, that’s how I avoid gambling.

That’s frankly why I’ve become a multimillionaire. That’s why my top student have become multimillionaires. Sometimes you have to avoid the action. You have to lose the battle to win the war. Even though everybody likes the action, it’s not exactly predictable. So, anyways, I’ll teach you more rules. Go apply underneath this video. Join my Millionaire Challenge. I want to mentor you. An IPO is just one small thing. There’s so much to teach you. Get on it. Hey, Tim Sykes, millionaire mentor and trader. Thank you for watching my videos. I hope that they help you. I want to share everything that I’ve learned over the years. You can check out more videos right over there, and also click subscribe so that you can watch all of these videos, get that knowledge and become my next millionaire student.