Chapter One: How to Start Penny Stock Trading

Last updated on November 24, 2019

Ever wonder how to start penny stock trading? Well it’s something I know well. What if I told you that, in front of you—on your computer screen—are all the secrets that I used to transform my life so that I could live the millionaire lifestyle I always dreamed of.

I’ve been trading penny stocks for more than fifteen years, and in that time, I’ve made more than $5 million in profits** and helped turn several of my students into self-made millionaires.

It’s a pretty safe bet to say that I know what I’m talking about when it comes to penny stocks, but do you know what people want me to do with all that information? They want me to lock it down and only give it out to people who can afford to pay me thousands of dollars.

And you know what I think? I think that’s bullshit.

I’ve spent more than eight years of my trading life teaching my strategies to others because I believe that everybody deserves to have access to the secrets that could make them rich.

Timothy Sykes
© 2018 Millionaire Media, LLC

Other teachers hate me for this. They know that if everybody can learn how to trade penny stocks for free, there won’t be anybody left for them to rip off with their overpriced courses and expensive seminars.

Bottom line? They’re afraid.

But I don’t care—I’m blowing the lid off the whole damn industry. This is America, and everybody has the right to pull themselves up by their bootstraps with pennystocking and build the kind of generational wealth that used to only be available to the Top 1%.

What I’ve put together here is—by far—the most comprehensive free penny stocks trading resource ever released online. It’s over 30,000 words long, and by the end of it, you’ll be ready to dive in and start making real money with pennystocking.

Will it be easy? Of course not. I’m not going to lie to you and tell you that getting rich through penny stocks is as simple as buying and selling a few shares.

It’s hard work, but it’s work that anybody can do if they have the right training.

But if you’re willing to put in just a little bit of effort by reading this guide and putting its recommendations into practice, you’ll be more likely to profit than 90% of all amateur traders out there.

I’m glad you’re here, and I look forward to taking this journey with you. If you’re ready to take the first step on your road to personal riches, let’s get started with “Penny Stocking 101: How to Get Started with Penny Stocks:”

how to trade penny stocks

Who Am I?

Who Am I

Just in case you don’t know me, I want to take a few minutes to introduce myself and show you the road I’ve taken to turn a portfolio of $12,415 dollars into more than $5 million dollars in trading profits.

When I was in high school from 1999-2002, my parents gave me the $12,415 dollars I’d earned in bar mitzvah gift money to play around with. They thought I’d lose it all, but instead, I spent hours in the computer lab, learning how to trade.

I started with mutual funds and other more traditional types of investments, but when I realized that the best I’d ever earn was 8-20% a year in returns, I knew there had to be something better out there. That led me to the world of penny stocking. I made some good calls and some bad ones, but the most important thing was that I learned how to read charts and track companies to find the patterns I knew I could trade in order to turn a profit.

Instead of going the traditional college route, I found myself skipping classes to trade penny stocks and launch my hedge fund, which was the #1 ranked short bias fund by Barclay for 3 years (from 2003-2006) before I realized that my trading strategy wasn’t very scalable. I tried to take advantage of longer-term trading strategies and my fund lost 35% in the process.

Despite feeling pretty embarrassed about my situation, I had still turned my initial $12,415 dollars into $1.65 million dollars by my college graduation. I agreed to make an appearance on the documentary, “Wall Street Warriors,” where I wound up starring in 5 of the 6 episodes of the first season, although I was growing increasingly frustrated that the restricted hedge fund industry prevented me from answering any of the questions I was receiving about my trading strategies.

In 2006, I said “screw it” and wrote a book detailing my experiences, called “An American Hedge Fund” (which you should absolutely read if you haven’t already—it’s free at the link). I decided to take things even further by launching a publishing company and a blog that would detail my trading activities and give me a way to launch my brutally honest financial newsletters and instructional DVDs.

Since launching my blog, I’ve published thousands of posts (8,000+ at last count) demonstrating how I’ve taken my latest brokerage account to $213,026 and counting—a gain of more than 1,500%. I’ve been ranked the #1 trader out of 60,000+ investors on Covestor from 2008-2011, and I’ve been featured on CNN Money, Fox & Friends, and pretty much every out there.major business and financial news outlet

In my spare time, I love to travel. I’ve been to more than 100 countries so far and had the chance to hang out with some of the world’s most interesting and most successful people. You can follow my travels on Instagram and Youtube, where you’ll get even more of an insider look into the millionaire lifestyle that my trading success affords me.

But the other big love of my life is teaching. So far, I have over 5,000 students in more than 70 countries, and they’re doing amazing things. More than four dozen of my students are currently earning six figures a year, and two of them have gone on to become millionaires for scratch. These students learn from my newsletters, my DVDs, my millionaire trader challenge, and all the free information I provide on my blog.

I don’t just talk the talk when it comes to pennystocking. I walk the walk as well – and And I teach my students how I became rich by doing the same.

What is Pennystocking?

Pennystocking—that’s what you’re all here for, right? So what is pennystocking? Well, pennystocking is the game of trading penny stocks—or, stocks trading under $5 dollars a share—in pursuit of profits. Forget value investing where you buy positions in strong companies and hold them for the long-term. Pennystocking is all about riding the waves of penny stock price moments. The better you learn to surf these waves, the better your profits will be.

Read this paragraph over and over again. This is very important. This isn’t investing—this is a game, and you have to look at it like a game.

How do you learn the game? In my experience, the real reason why most traders lose money – and 90% of all traders will eventually lose money – is that they don’t consider all the variables. You can’t afford to make that mistake. You have to understand how Wall Street and all the characters involved work in order to adapt to change. The individual players and the stocks may change, but Wall Street never changes.

(Like that? It’s a great quote from Jesse Livermore, one of my favorite books, “Reminiscences of the Stock Operator.”)

So does this really work? For the past fifteen years, it has for me. I’m self-taught, so I really don’t care if others agree with my theories. I’m sure a lot of people won’t, but nonetheless these rules helped me turn just over $12,000 dollars into more than $5 million dollars in trading profits. And as you’ll soon discover, I’m not even that good of a trader. I really I want you to be better than me. I think you can.

So why am I telling everybody my strategies? Throughout my time as a trading teacher, I’ve received literally thousands of letters, comments and email messages that show me that people know so little about stock trading, so little about hedge funds, and – most specifically – so little about penny stocks. So I’m going to try and change that. I’m on a quest to create more millionaire students than any other teacher out there – and I want you to succeed!

There’s a reason why a lot of people think penny stocks are gambling, and the truth is that you probably won’t be able to make millions of dollars overnight on a few trades. But you can make thousands and maybe tens, and even hundreds of thousands at a time (like my student Tim Grittani, who cashed in more than $200,000 dollars on a single stock)**. And that can be enough to make a huge difference in your life and get you to that millionaire lifestyle you’ve always dreamed of living.

So you have to understand that you can profit handsomely with trading Penny Stocks, but there are limitations. I’ve learned this the hard way, but I’m hoping that – with this guide and the other educational tools I provide – I can hopefully save you from a lot of the pitfalls that I’ve endured.

Now, to answer the question, “Aren’t penny stocks dangerous?” Yes, of course they’re dangerous. Everything is dangerous – even life is dangerous. But if you take the time to learn about penny stocks and understand them, it really makes a lot more sense. There just isn’t that much accurate information out there about penny stocks, but I’m hoping to change that with this guide.

What’s so great about penny stocks? Well, let me tell you… I really believe they offer the greatest risk-reward ratio of any investment type around. With research and devotion, I have seen $5,000 that I have traded, for example, turn into $10,000 or even $20,000 within a few weeks or months**. Without using leverage, no other investment option offers such great upside in so little time.

It’s the truth. I don’t like leverage, as you’ll hear me say throughout this guide – but you don’t even need it for penny stocks, and you definitely shouldn’t use it. Penny stocks are the least complex of any investments, so virtually anybody can play this game. Not a lot of people play penny stocks and these companies are very tiny. There really just aren’t that many variables involved, making it the perfect place for beginning students and more advanced traders alike.

And while we’re going to get into the logistics of penny stock trading soon, there’s one important thing I want to cover that’s going to make or break you as a trader. It isn’t the size of your portfolio, and it isn’t your past experience. Can you guess what it is?

It’s your mindset.

Tim Millionaire challenge