Am I Willing to Work Hard? Am I Willing To Fail?
Stocks vs. Commodities vs. Derivatives vs. Real Estate
Important Stock Terms That You Need to Know before you start trading
What Are the Key Indicators of Good Penny Stocks?
Positive Indicators to look for before trading Penny Stocks
Negative Indicators to look out for with Stocks
How to Develop Your Own Trading Strategy for Penny Stocks
What Do You Need to Succeed in the Penny Stocks Market?
Tims Best Tips from Winning Big with Penny Stocks
Want to learn more about the wonderful world of Penny Stocks? Start studying the most in-depth and current Penny Stocks Guide in the world!
What would you do with an extra five or six figures per year? Or $1 million or more?Most people think Ive made millions intrading penny stocksbecause I covet the cash. That couldnt be further from the truth.
Money is just numbers in a bank account or green slips of paper. What money represents, though, is freedom.
Trading Penny Stocks has allowed me to travel to more than 100 countries, meet thousands of interesting people, talk about my skills on television, help build schools in underprivileged countries, and buy what I want, when I want it.
Trading Penny Stocks also gives me the freedom to work when I feel like it.If Id rather jet off to the Bahamas, Ill do that instead.
Two decades after I first started trading Penny Stocks , Im more passionate about teaching than trading. Dont get me wrong I still trade nearly every day. But I do it just as much todemonstrate my tradesfor others as to pad my own bank account.
Thats why Im publishing this guide on Trading Penny Stocks for free online.
I want you to knowthe basicsof pennystocking so you start pursuing your own dreams.
Close your eyes for a second and visualize your dream that one thing that will make you happy.
My name isTimothy Sykes. To date, Ive made more than$4.7 million in profitsfrom trading penny stocks and day trading, and Ive dedicated my life to teaching other people how to take advantage of pennystocking.
Lots of people would charge big bucks for a huge guide like this, but I have another goal in mind. Instead of shaking down people for cash, Im going to lay out my detailed approach to trading Penny Stocks so you can take advantage of it, as well.
Make no mistake:This guide is long because pennystocking is a complex form of security. While shares might be less expensive than the blue-chip stocks other people invest in, you can still lose money if you dont educate yourself.
Youve taken the first step by reading this guide, so Im already impressed. Most people dont bother with research because they think the low barrier to entry means instant profits.
WIthout further ado, lets dive into the world of pennystocking so youre ready to tackle it head-on.
Penny stocks, also known as one-cent stocks, are common shares of small companies that trade at lower prices per share. Despite the name, a stock is considered a penny stock if its valued at $5 or less per share.
The companies behind Penny Stocks are often unstable,new to their industries, or have low net worths. Many only sell a few products or services, and most dont publish their financial records.
Those are just a few ways in which they differ from other types of stocks.
Because of their volatility, they also represent an amazing opportunity for people like you and me. The fast-moving stocks allow you to take day trading to a whole new level. Instead of buying a stock when
See why I like pennystocking? Its the most exciting form of day trading as far as Im concerned, and once you get started, I think youll agree.
But isnt volatility dangerous?you ask. Of course. Its extremely dangerous if you dont know what youre doing. Thats why lots of newbies fail miserably and its why Im sharing my secrets for free.
Im a low-risk kind of guy.I didnt generate nearly$5 million via the stock market just to lose it all.I value my laptop lifestyle too much.
So Im conservative with my trades and careful with my research. Ill teach you how to do the same.
Ive been trading Penny Stocks for more than 15 years, and in that time, I turned $12,415 of my bar mitzvah money into more than $4.2 million in trading profits. I like to challenge myself, but Ive already reached my goal of becoming a millionaire. Now, Ive turned my focus to teaching.
There are several waystoinvest in penny stocks. The most common strategy is to buy them based on your supposition that the stock price will rise, then sell those shares once they reach a desirable price.
Thats a huge oversimplification, but Ill get into more detail later in this guide.
You can alsoshort-sellPenny Stocks, which means that you believe a penny stocks price will decline. You essentially borrow shares that you dont already own, then sell them when the price drops.
Regardless of how you invest in Penny Stocks, though, the goal is always to generate a profit. The profits might be small, but they add up over time.
Anyonewho wants to make money in the Penny Stocks market can benefit from this guide.
Heres the deal: Many people even those who read this entire guide wont follow my advice. Thats okay. They might even make money in pennystocking with a totally different approach. Thats okay, too.
But those who do follow my advicewill have more knowledge and strategiesfor their first forays into the stock market. If youre not willing to learn and study, you probably wont enjoy much success. Thats the bottom line.
In this article, Ill cover the 10 essential competencies that you must possess in order to succeed with pennystocking.
Unlike stocks that trade on the major exchanges, Penny Stocks are traded over the counter (OTC).If youre reminded of medications like aspirin and ibuprofen, youve got the right idea. However, instead of visiting your local CVS, you create a broker account and trade through theOTC electronic exchanges.
A brokerage account allows you to execute trades with the money in your account. If youre trading penny stocks, you can open an account with as little as $500, even $100 if youre broke, but I dont recommend it. I started with just over $12,000, but you dont have to follow exactly in my footsteps.
Once you have an account, you can buy and sell penny stocks. Ill get into more detail later, but suffice it to say, youll trade no differently than you would any other stock. The transactions simply happen faster and for different reasons.
Pennystocking is, quite simply, the activity involved in trading penny stocks.You decide what stocks to buy, sell, or short based on patterns in the market. I call them price moments.
Youll know when youve found the perfect moment to invest. But that knowledge only comes with education and practice.
If youre willing to understand charts, patterns, and other aspects of pennystocking, youll generate profits. Youre not investing in long-term holdings, like you would with blue-chip stocks, but instead taking advantage of the ebb and flow of a volatile market.
Ive focused on pennystocking for my entire career, which spans more than 20 years. If I didnt know I could profit from daily pennystocking trades, I would have given it up long before now.
I said before that they are complex, and thats true. However, theyre far simpler than any other type of security.
These companies are small and likely new to their spaces. They might even be in danger of going out of business. Theyre not required to submit financial documents bythe Securities Exchange Commission(SEC), which removes a ton of variables right there.
Because of their simplicity, you canlearn to trademuch faster than you could learn to invest in the New York Stock Exchange or some other larger securities exchange.
Pennystocking is also beneficial because you learn as you go. Youre only investing a small amount of cash in each play, and your returns are equally small. Sometimes you hit a major play that results in six-figure profits, but thats rare. Instead, youre growing your wealth over time.
That might not sound like much of a benefit, but my students often tell me how much they appreciate the security and peace of mind pennystocking brings. Big risks might mean big rewards, but they can also mean huge losses.
Ready to learn how to trade Penny Stocks? Click here to begin
I mentioned before that I dont like risk. You shouldnt, either. If you take huge risks in thestock market, you stand to lose huge amounts of money sometimes well and above what you invested in the first place.
If you want to successfully trade, focus on watching stock performance and hedging your bets. Never invest more than 10 percent of your trading account on a single play, and if you have a small trading account, limit that to 1 percent.
You also need to set your own boundaries based on your risk tolerance. What are you willing to bet on a single play, and what will happen if youre wrong? Write down your own rules and stick to them.
The word failure scares most people. Were conditioned from the moment we can talk that we should strive against failure. To fail is to disappoint your parents, siblings, teachers, friends, and everyone else you care about.
But in the stock market and in business, failure isnt just acceptable its unavoidable. You cant invest Penny Stocks without failing at some point. Ive failed over and over again.
The important thing isnt to avoid failure, but to learn from it. If youre willing to work hard, accept failure, and learn from your mistakes, pennystocking will be right up your alley. Youll learn thatfailures eventually turn into successbecause youre willing to learn.
Investments are all over the place. You probably see signs staked into the grassy medians at intersections advertising some get-rich-quick opportunity or another. Some investments are legitimate, while others turn out to be scams.
If you want toinvest your moneywisely, you need a legitimate outlet. Think of it as the difference between getting a job/starting a business or hitting the casino. One option will generate profits, while the other will likely leave you destitute.
Penny stocks are one form of stock. A stock is just a contract a piece of paper that gives you partial ownership of a company until you sell it. Companies raise money through the stock market to expand, hire more employees, create new prototypes, and fund other expenses.
As an investor, you buy shares of that company, which can drive up the price. If you make the right play, you sell when the price goes up (or down, if youre short-selling) and take your profits.
Real estate, bonds, annuities, ETFs, mutual funds, and other types of investments exist, too. You can also invest directly in a company, such as an angel investor, but thats far beyond the scope of this article.
Types of investments can be boiled down into four basic categories: stocks, commodities, derivatives, and real estate.
Stocks, as I mentioned above, are pieces of a company.You buy shares (pieces of the stock) at a set price, then sell them for a profit or loss. Commodities, on the other hand, are physical substances that come from the earth, such as gold or wheat. Theyre traded on an open exchange, with the most common commodity being oil.
Derivatives are types of investments that depend on something else for their prices. For instance, options trading is a form of derivative. Instead of buying or selling a stock, you form a contract with theoptionto buy or sell a certain number of shares at a specific date.
Real estate is its own animal. You can invest in real estate by flipping houses sold at auction, renting properties to tenants, and numerous other strategies. Its not my cup of tea, but lots of people generate signifcant profit from it.
Everything in the financial industry revolves around supply and demand. An increased supply reduces demand, but a decreased supply increases demand and vice versa.
In the stock market, greater demand means more opportunities to sell shares of a stock at a higher price point. Similarly, greater supply allows you to buy in at a reduced rate.
Keep these terms in mind when you begin learning. Theyll fuel many of your strategies no matter your trading techniques.
Are you ready to dig into the nitty-gritty?The first thing you need to master is stock analysis.
On its face, stock analysis refers to the process of evaluating a stock based on fundamental and technical analysis. Fundamentals are things like profits, revenues, price/earnings ratio, and earnings per share. Youll learn more about those later in this guide.
On the technical side, you must learn how to read charts. Instead of judging the company itself, youre evaluating how the stock has performed historically and making an informed decision about its future in the market.
I read chart patterns constantly because I want to see how a stock has performed over weeks, months, or even years. What patterns can I detect in those charts? What might influence forecasted performance?
Later in this guide, Ill define some critical penny stock terms in more detail. For now, I want to give you a brief overview so youre more educated about the details I mention.
: Average price per share of a given stock over a specific period of time
: A stock that breaks through resistance to rise in price
: Stocks that break through resistance to decrease in price
: A price point for a stock that doesnt seem likely to move outside of a breakout
: The same thing as resistance except that its supporting a lower price point below which the stock is unlikely to fall
Whether youre trading penny stocks or more expensive stocks, you need to be familiar with the most commonstock market terms. Ill break them down into even further detail later, but here are some of the most common terms to memorize:
: Buying shares of a stock with the purpose of profiting off an increase in stock price
: Selling shares of a stock to make a profit or prevent further losses
: Borrowing stock you dont own for the purposes of profiting off a stock that dips in price
: Buying back the shares of stock you sold short to profit
: The greatest price someone else is willing to pay for a stock
: The difference between the bid and ask prices
: A situation where a subsequent trade is at a higher price than the previous one
Editors Note:Read Tims Blog Post:37 Stock Market Terms Every Trader Should Know
Ill also get into orders and other importantstock market termsfor you to understand.
Wall Street is an actual road in lower Manhattan, but its more colloquially referred to as the financial center of stock market trading. The most successful firms operate there.
You dont need to be on the trading room floor to take advantage of the stock market, though especially if youre interested in trading penny stocks. These stocks arent traded on the NYSE or NASDAQ. Instead, theyre traded through the pink/grey sheets, the OTC Bulletin, and the NASDAQ small-cap market.
To buy Penny Stocks on market exchanges, youll need abrokerage account. You deposit funds into your account and execute trades baspoed on the money available.Main Wall Street Players
Major investment firms are themajor players on Wall Street, but dont worry about them. Theyre not concerned with penny stocks.
The most common players youll meet while trading Penny Stocks are amateurs. They often fail to conduct research and are therefore more likely to fall flat on their faces.
Stock pickers tell you the sto In many cases, you cant trust them, especially if theyre promoters, since theyre probably getting paid to pump up a stock, which means you cant base your decisions on their advice.
Analysts and economists are worth listening to if youre investing in huge companies, but theyre not likely to give advice on penny stocks.
When evaluating potential Penny Stocks, you want to look at key indicators to determine whether a stock will perform well in the future. Penny Stocks dont have much in the way of fundamental information because, as I said before, they dont have to publish financial documents.
However, there are a few things to look for when trading Penny Stocks. Positive and negative indicators tell you what kind of risk youre taking on by investing in a particular stock, even at a nominal amount.
The positive indicators you want to look for include the following:
You also want to look for negative indicators that suggest you should steer clear of a stock or short-sell it:
Since they are thin on fundamentals, technicals take on a far more important role. Learning how to read chart patterns can make you abetter trader. More importantly, youll begin tounderstand how stocks behave in specific marketconditions.
This is something that happens over time. You canlearn to read chart patternsbut still not really understand them. Think of each stock as a personality. It has its own way of moving depending on the company behind it and external factors.
Regardless of the type of chart you prefer, I recommend looking at a six-month snapshot. Thats usually a healthy time period by which to judge a stocks momentum.
The four most common types of charts are the following:
Personally,I favor the candlestick. Its easy to read movement in a candlestick chart based on whether the wicks are black, white, or red. Others like bar and line charts because of their simplicity, while I dont know anyone who prefers area charts. Theyre messy and difficult to understand at a glance.
An abstract closeup of two gold cast statuettes depicting a stylized bull and a bear in dramatic contrasting light representing a financial market trends on an isolated dark background created by Inked Pixels
Chart patterns describe how a stock price moves over time specifically in up and down movements. Although history doesnt always predict the future, you can identify patterns that allow you to make educated guesses about a stocks future performance.
This is my favorite type of chart. The stocks price moves in one direction up or down with regular but brief changes in direction that quickly reverse.
I cant stress enough that you need to pay attention to clean charts. Theyre highly predictive and can allow you to take advantage of quick profits on a long position or a short-sell.
However, you dont want a chart that lookstoo clean. This type of chart has an upward or downward trend with almost no variation. An extremely clean chart especially one that remains clean for six to 12 months often precipitates a steep increase followed by a steep decrease in price. If youre not fast enough, you could lose significant cash.
You might have heard the terms bull and bear market. A bull market trends upward, while a bear market trends down. The same applies to chart patterns.
A clean bullish chart shows a steady upward trend. The stock price might fall on occasion, but it jumps right back up often farther than it was before its brief decline. This is a good time to make your play because youre likely to see the trend continue.
A clean bearish chart is the exact opposite of the clean bullish chart. Theres a definitive decline in stock price over time. It might spike every once in a while, but the downhill pattern is evident from first glance.
It often happens after a steep increase in price. A company might announce new funding, for instance, that excites investors. The stock price shoots up, but it cant sustain the hype, so it begins to fall precipitously.
Clean breakouts and clean breakdowns show that a stock has either broken through resistance or fallen below support respectively. The chart is clean because the pattern either repeats itself or shows significant pattern repeats prior to the breakout or breakdown.
You can identify a cup and handle chart by its shape. Youll see a smooth downward trend followed by an equally smooth upward trend. After that, the price drops precipitously. Its difficult to play this type of chart, but Ive done it.
I encourage you to look at messy stocks. Their charts are all over the place with no discernible pattern. The stock price might jump for no reason at all, fall a little bit, rise a little bit, fall again, and so on. But those peaks and valleys dont repeat reliably.
While I think you can learn from these charts, dont trade on them. Theres no way to predict what the stock will do next because you dont have a pattern from which to learn.
A messy break down starts with an upward trend. At first, the chart will look pretty clean (and appealing). Then, seemingly out of the blue, itll drop. The pattern becomes extremely messy from there, with dips and increases that have no obvious reason behind them.
Later in this guide, Ill cover even more chart patterns that you might want to consider watching. Ill also go into more depth about the patterns listed above so you can begin to visualize what ideal stock charts look like.
Now, were getting to the good stuff. Nobody else (except myTrading Challengestudents) uses these charts because theyre mine. I created them after watching stock charts for years and better understanding the patterns that play out.
Well start with my favorite. The Supernova looks like a stock chart exploded. It might have experienced modest peaks and valleys over several months, then it skyrockets for a short period of time. If you catch a Supernova, you can easily triple your investment or more. Ive seen Pe nny Stocks shoot up to 10 or more times their original price.i
As the name suggests, this stock pattern looks just like a staircase when viewed from the side. It goes up, then flatlines, then goes up again. There might be a few dips along the way, but the stair-stepper pattern repeats.
Ignore this stock pattern at all costs. Its incredibly boring because it lacks liquidity and volatility.
I named this pattern the crow because its like watching a bird pick off your investment one chunk at a time until theres nothing left. If you start to see a crow pattern, get out immediately to avoid potential losses.
Ive developed my own penny stock chart patterns. Want to see? Of course you do!
There are four things youll need to get started with pennystocking.
First, you need at least one brokerage account. This is the account from which youll invest in the stock market. I have plenty of recommended brokers, but youll need to choose one that works for you. This is particularly true if youre starting with a limited investment, such as $500 or $1,000.
Second, arm yourself with research. The more, the better. Look at as manystock chartsas possible and identify the patterns you see based on what you read in this guide. Return to this guide over and over again until you can practically recite it verbatim.
Third,create your watchlist. This is the list of Stocks Penny Stocks in which youre interested. If you identify a pattern you think you can play successfully, execute the trade. Watch it carefully, then get out before you could begin to lose money. In addition to your own list, subscribe toTIMalerts.
Fourth and finally, get atrading diary. This is one of the most important assets for any investor. In it, youll record every trade you make as well as your observations and the results. It will help you avoid making the same mistake twice. Plus, it can become a teaching tool if you ever want to help a friend or relative invest in them.
Do you have a penny stock strategy? If not, you need to read on!
The most important thing you can do before investing in the penny stock market is create a set of rules for yourself. Youll never break these rules because they define your trading strategy.
I have my own list of rules, which Ill get into below, but keep in mind that my rules might not work for you. We might have different risk tolerances or goals.
When you create a rule for yourself, make sure you understand the reasoning behind it. For instance, lets say that you never want to risk more than 2 percent of your brokerage account on a single play. Thats reasonable. But why? Maybe its because youre highly conservative, or perhaps its because you want to free up more of your capital for other plays.
If youre interested in my rules on Penny Stocks, all of which have helped me succeed over the years, here they are.
As I said, you might have different rules. These strategies, though, have helped mebecome a multi-millionaireand have allowed me to teach people how to play this wonderful game.
Have you ever lost $500,000 on a single play?I have.
My mistakes are numerous, but Im still successful. Thats something I want you to keep in mind as you embrace penny stocks. Yes, youll lose money, but its part of the process. My goal is to help you profit more than you lose.
I created theTrading Challengefor just that purpose. I and other successful traders help newbies learn the ropes and avoid the same mistakes we made.
Are you interested in living the laptop lifestyle? Are you saving for a particular expense? Do you want to free yourself from financial constraints?
If you answered yes to any of those questions, consider applying for my Penny StocksTrading Challenge. Its a fantastic opportunity to learn from some of the best minds in penny stocks and other investment vehicles. We work with people daily to help them achieve their specific dreams.
Im not afraid to give away a ton of information for free. Some people charge thousands of dollars for access to their knowledge, but Im not that guy.
I hope this guide helped boost your knowledge about penny stocks and the stock market. Are you ready to join myTrading Challenge?
Let Me Walk You Step-by-Step Through How I Earn Profits.
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Im a 29 year old single mother of two. Ido not have a regular 9 to 5. Iam currently day trading as aliving. Prior to discovering Timothy Sykes Iplayed around with a couple other mentors and penny pick sites. Sadly not being taught the basic fundamentals Ilost $5500-Terrible! Ifound Tims website in May and now Im up 50k learning from Tim Sykes. Iam extremely grateful for Tim, he is the truth hands down!
As many of you already know I grew up in a middle class family and didnt 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 Ive launched myTrading Challenge. Im extremely determined to create a millionaire trader out of one my students and hopefully it will be you.
So when you get a chancemake sure you check it out.
PS: Dont forget to check out my freePenny Stock Guide, it will teach you everything you need to know about trading. 🙂
God! my mind is blowing up right now. am just loving this.
Great read. This really gives me some directiin.
Merry Christmas and Happy New Years!! Waiting for you to learn
Ive been self studying and trading for 2 years. This article provides excellent direction that ive been needing.
I want to join your trading challenge but the link gives an error message each time I click on it and I dont know why. I have tried different browsers such as Google Chrome and UC Browser but the error message persists.
Great information!! Already applied for the Trading Challenge!!
Just came across your site, I am comfortable with the terms and have done some trading. But, find it distracting when I have to jump all over for info. in the beginning. would like a straight forward step step of the whole process. Starting with selecting to implementing a trade online. Ok now lets tweak it. I am interested in the weekend trades, but need more info. not hype, facts.
I am an old man whos got no retirement except social security, i do not want to stay on it. I made my living with my body, all my life working toiling back breaking labor type of work until at age 48 i damaged my back so bad i could not walk, and the pain was to the point of not wanting to live anymore. I have been reading up on tims ways, i put 1500.00 into a TD account may 2018, i didnt understand all the ways of what i read, and i lost 6 grand over the time, but my account is at 20 grand now and i am trying to learn tims pick of the meat ways, my mind set is invest long term, NOTinvest short term trades 15 minsmake a few dollars move on, i have not mastered this yet but i will, i bought another computer screen so i can run a scanner and iam going to learn how