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Posted 9 months, 3 days ago.

http://www.timothysykes.com/admin/2007/10/21/q-a/

Q & A

Tags: Basics, Interviews

Tim,
I’ve managed to save about $4,000 over the years and after hearing about your story on Wall Street Warriors, I’m inspired to put it to work in the stock market. Do you have any tips for a beginner? Any favorite stocks?
-Mike M., Dayton, O

Mike,

Awesome, yes, you should definitely start putting your money to work–mutual funds are the safest bets around and I’d encourage you to look at them first. But if you want to take on some risk and start trading, my favorite broker is Thinkorswim, mainly because they have some really outstanding tools and incredible customer service. As you’ll read in my new book , I created my wealth not through long-term investing or stock picking, but by playing whatever stock is in play, holding it for a few hours or days, buying it (or going long) when I think the momentum can continue, and shorting it when I think the hype will wear off soon and I feel the stock price will drop.

My book isn’t very technical so if you want to learn exactly how I trade, check out my instructional trading DVD. Basically I don’t aim for big winners–I think it’s much more difficult to try to pick big winners that will double or triple; instead, I’m perfectly content with aiming to capture $1-$2/share in profits either from the long or short side.

Tim,
I feel like an idiot to be asking you, but I don’t understand short selling, can you explain it to me?
- Jared

Jared,

Don’t feel bad, you’re not alone, I get that question all the time. Short selling is when you sell shares you don’t own (taking a negative position) to profit from any fall in stock price. It’s riskier than buying since you have to borrow shares to take a short, you can lose more than you put in (since stocks can continue moving higher) and stocks tend to go up over time, but it’s what I excel in. You gotta remember that there’s a lot of idiots on Wall Street and many companies, especially smallcaps, microcaps and Penny Stocks will fail–you might as well profit from it!

Dear Fraud,
You haven’t made money since the bubble years in 1999-2000, stop pretending!
- Tim is a fraud!

Dear Misinformed Person,

Actually I’ve been solidly profitable 1999, 2000, 2001, 2002, 2003, 2004 and 2005. 2006 was my first down year and as you’ll read in my book, those losses were the result of my failed investment in one company when I stupidly got away from my core trading strategy. Before closing my fund down 3 weeks ago, I simply was never allowed to detail my performance 2003-2007 because of the hedge fund industry’s regulations (this situation has helped me realize how flawed these regulations are).

As you’ll discover in the coming months and years, my trading strategies are still effective and my goal is to share everything so there won’t be any more confusion.

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9 Responses

1Mike

February 3rd, 2008 at 8:10 am

Tim,

I am interested in starting a home-based trading business on my own. Since I would start as a beginner, I feel swing trading would be the best strategy to gain experience and knowledge. The aspect I love about finance is that your knowledge (and income pontential) have no ceiling. I was curious as to what you feel are comfortable start-up costs. Minimum capital investments, commissions, software, hardware, subscription costs, support costs, trading platforms, etc. Thanks in advance for any advice you could provide and best of luck to you.
2tim

February 3rd, 2008 at 1:57 pm

Minimum you need to trade with is a few thousand, commissions are negligible, especially if you start with a small account because you’ll have to ignore most trade setups and really only partake in the ones with maximum volatility/predictability (aka the ones I feature on this site 1-3/month). Software, it’s all about screening for the right charts, see this post:

http://www.timothysykes.com/20.....ill-trade/

Hardware, I use a $3k laptop, but I overspent back when I was making the big bucks. All you need is an internet connection. Subscriptions, none, TimothySykes.com, TheLion.com and Investorshub.com are all free. Trading platform, I love Thinkorswim, they have great executions, customer support, they’re cheap (not the cheapest, but when you get what you pay for, Scottrade users know what I mean, LOL) and also have great screening tools. Good luck!

Tim
3ANNE

February 6th, 2008 at 1:44 pm

ARE THE STOCKS THAT YOU ARE WATCHING ONES THAT YOU ARE LOOKING TO SHORT?
4timsykes

February 6th, 2008 at 3:29 pm

I’m predominantly a short seller–because all these penny stock companies are total crap–but sometimes I buy into breakouts, it all depends on their chart pattern
5Jimmy

February 26th, 2008 at 9:05 pm

Hi Tim,

I heard you interview through “Disciplined investor” Podcast. I guess you are the best stock picker. Awesome job. I just had a simple question. If you pick stock what’s the best way to save in transaction fees? say if you do 10 transaction a day its like loosing $100 day just in fees and What about capital gains and tax implications? Your insight is much appreciated. Best of luck with your new portfolio.

Thanks
Jimmy
6Taylor

February 28th, 2008 at 7:58 pm

Hey Tim,

What software and trading platform were you using on Wall Street Warriors?

Thanks
Taylor
7David

February 28th, 2008 at 8:59 pm

Hi Tim,

I recall somewhere on the site that you criticized Scottrade while promoting the benefits of thinkorswim. What is it that you don’t like about them and does the criticism extend to other discount brokers such as Zecco?

Thanks.
David.

By the way, that drunken golf segment on WSW was awesome. I just graduated, so currently looking to work in the financial services industry and hopefully get some of that too.
8timsykes

February 28th, 2008 at 10:12 pm

I havent tried Zecco, I have tried Scottrade and I can tell you their borrows on potential shorts aren’t as good as Thinkorswim. I’m a short seller, I need shares to do my job!
9timsykes

February 28th, 2008 at 10:14 pm

I was using CarlinTrader, but they’ve seen been absorbed by RBC. Now I use and recommend Thinkorswim