Why Low Priced Stocks Crush High Priced Ones aka I Love Frauds & Failures!
Let the records show (CRY) and (NOG) as Exhibits A and B, whose charts I’ve posted HERE and HERE, respectively. Both have gone in the direction I predicted—CRY higher on the breakout and NOG lower after going vertical—but I haven’t touched either one. I’ll tell you why.
Sure, the SEC has a noose around my neck—and every other trader under $25k—but for all CRY’s and NOG’s perfect price action, the big $ rewards just weren’t there. Given my tiny account size, each postion woulda been around $4k, basically 400 shares each…if I’d timed them perfectly, which is rare, I’d be up 50 cents/share on NOG ($9.60 to $9.10) and 60 cents/share on CRY ($10.10 to $10.60), basically $200 each…over 2 long days!
Instead I chose to trade PSTI—a blatant failure of a company (reverse splits are a dead giveaway)—half the price of CRY/NOG, allowing me to trade 1,000 shares; sure a bit bigger $-wise, but since it’s not a real company—the stocks of frauds/failing companies are more predictable because the players are bitter shareholders, pumpers/promoters and short sellers aka all have clear motives—I felt more comfortable.
And instead of having to hold and wait for 10%-ish volatility 
over 2 days (real companies have sooo many more variables/players aka take longer to make big moves), I made my first $330 in 20 minutes and now the other $100+ basically holding overnight, even though my trades were far from perfect and the stock has definitely not acted the way I thought it would.
I know this is a difficult concept to accept, that’s why I take such pride in teaching it!
TIM Lesson: Low priced stocks rock because they’re fraudulent/failing hence simpler/more predictable
Enjoyed this post? Sign up below and never miss a post again!
LoadingTIM make you some $$$$? Help him pay his expensive web designer!
Related Reading
36 Responses
Trackbacks
Add a Comment!
If you want to receive TIMbucks, you'll first have to Login before posting a comment. Click here to learn more on the new TIMbucks rewards program.
Top TIMbucks
Join the ranks! TIMbucks is a cool new rewards program designed to get you guys to share your thoughts, ideas and experiences openly. Our top TimBucks earners to date are:
- Davey (132)
- Yngvai (124)
- ViciousChicken (104)
- ivegotstylekid (82)
- timothysykes_forums (75)
- jj (72)
- Dan_O (50)
- Ben_Bien (47)
- Blithe (43)
- investorslive (39)
Navigate
$
Updated Daily!
136 Books
Up 52%
20 Videos
3 Podcasts
8 Talking Pics
65 Links
Stocks Review
UPDATES
May 15, 2008Yup, by next Monday, everything's gonna be real working-like!
May 15, 2008PDO, up $4+ today, will teach you not to randomly short strong penny stocks, get in, get out then run...cuz sometimes they squeeze stubborn shorts to death!
May 15, 2008No ideal short plays today, check out these 2 interviews while we wait for price action perfection
I wish I'd listened to my own rulebook, instead got squeezed for $400 shorting blatant-fraud KYUS too early...someone needs a refresher course this weekend!
I nailed NCOC's 20% rise today in my pre-market post, but I was too biased against buying little breakouts, learn from my mistakes!
May 15, 2008Lots and lots of new sketchy stocks to watch
Stock Watchlist
| XRM | $4.54 | |
| SSBX | $3.25 | |
| APWR | $22.15 | |
| VRML | $2.54 | |
| NTHH.OB | $0.21 | |
| DPDW.OB | $1.04 | |
| CROX | $10.97 | |
| SUNV.OB | $1.45 | |
| AYSI.OB | $2.10 | |
| FORC.OB | $2.29 | |
| CNEX.PK | $4.10 |
TIMtrades
Learn from my successes, learn from my failures, learn from 
50% TIMreads
TIMtags
Loading ...
1timsykes
April 10th, 2008 at 1:33 pm
FRPT helps proves my point even more today, daaaamn any of u guys in that?
2lmsmith
April 10th, 2008 at 1:37 pm
Picked up 2k shares when it was $1.52….. I am laughing all the way to the bank!
3Davey(TIMBUCKS: $132)
April 10th, 2008 at 1:38 pm
I’m just like you Tim, my account is too small to hold stocks with potential…I was in at 1.50ish a couple weeks ago, but it was doing nothing so I got out. This game is great for the under 50K account but having the luxury of holding some of these will make it even better.
4lmsmith
April 10th, 2008 at 1:41 pm
Out of it now……….. TIM are you thinking about shorting this one?
5Webster(TIMBUCKS: $2)
April 10th, 2008 at 1:42 pm
Waiting to see if it stalls a bit again to jump in
6Dhan
April 10th, 2008 at 1:45 pm
I’m in at 2.45 with over 5k. I mentioned in my post on last saturday and you forgot to answer my post.
7timsykes
April 10th, 2008 at 1:47 pm
nah just reshorted PSTI at $4.25, this thing is a goner
8Webster(TIMBUCKS: $2)
April 10th, 2008 at 1:47 pm
Dhan - short or long at 2.45
9Dhan
April 10th, 2008 at 1:51 pm
Long. I’m not comfortable shorting FRPT and i guess it could go over 5 very quickly based on huge short position and expected revenue over 1 billion for 2008.
Tim, what do you think?
10GabeC
April 10th, 2008 at 1:53 pm
Nice drop PSTI. This thing holds up a little too well for braking technical barriers. How far down do u think this might go down Tim?
11cacaosteve(TIMBUCKS: $14)
April 10th, 2008 at 1:54 pm
Are you still looking to cover PSTI around 3.50, Tim?
12timsykes
April 10th, 2008 at 1:54 pm
FRPT is and has always been a contract guessing game, thats not my kind of play
PSTI on the other hand just took out support, damn buyers prevented a nice takedown under $, covered 1/2 at $4.15, i’m being over-protective, but i just dont like big block buyers
13timsykes
April 10th, 2008 at 1:57 pm
to best play these supernovas, u really just need to short then slip into a coma for a few days so u cant cover
14GabeC
April 10th, 2008 at 2:01 pm
Ya looking at it every minute doesnt help much. Can’t help it, my eyes are glued to the screen.
15A
April 10th, 2008 at 2:08 pm
Wow, you sure are in to the one night stands Timmay! In and out.
Covering your PSTI short in 7 minutes. Why don’t you let it play out? Perhaps the buy blocks could be bluffs.
16lmsmith
April 10th, 2008 at 2:08 pm
MLNM ~>>>>>> what do you think about that as a short? I know it’s not your pattern…. but this being up so much- it’s bound to take a drop of 1, 2, 3 … back to reality……….. Thoughts TIM?
17timsykes
April 10th, 2008 at 2:16 pm
i dont care if they are bluffs, i wanted the $4.25 to create stop losses to take out the $4s then cover…like dominos…when the dominos stop, i dont wanna risk it considering the spread and illiquidity, 1 10k buy at the as could take it to $4.50…not worth it, i’ll take my $500, even if i played it perfectly it’d only be $800 so not the end of the world
mlnm is a real company and the news is solid, stick to frauds man, its sooo much easier
18timsykes
April 10th, 2008 at 2:21 pm
GTE cnbc pump!
19timsykes
April 10th, 2008 at 2:25 pm
def. out of trades for today, mark it fake short at $4.28
20Daniel
April 10th, 2008 at 2:29 pm
Bought 1500 VLNC today at 3.34 sold at 3.55. Profit $315.00
Paid for your CD’s
Thank you Tim!
21timsykes
April 10th, 2008 at 2:30 pm
PSTi 20 cent jump, thats why i’ll always prefer covering early than risk being late…u’ve heard of fakeout breakouts, w ell this was a fakeout breakdown, plenty of signs warning u all along, big block buys!
22Andrew
April 10th, 2008 at 2:33 pm
Covered NCEN at 3 today. I wish i had read what you said about falling into a coma earlier!!!
23Oliver(TIMBUCKS: $12)
April 10th, 2008 at 2:34 pm
tim what do you think about SOLF? is there a possibility that itll go back down to $9-sh?
24GabeC
April 10th, 2008 at 2:36 pm
Damn PSTI… still holding. Tim since this is the third down day. Is it still a good overnight short? I mean its still downtrending right? Maybe if I do the coma thing it will work out better?
25Tony Ellis(TIMBUCKS: $24)
April 10th, 2008 at 2:43 pm
GTE lol
26Tony Ellis(TIMBUCKS: $24)
April 10th, 2008 at 2:43 pm
Cramer pump
27timsykes
April 10th, 2008 at 2:45 pm
gabe if i i thought i was a good short i’d still be in it, read comment #21
solf who knows, not a predictable pattern
28GabeC
April 10th, 2008 at 2:47 pm
ahh right, my bad, forgot my reading glasses.
29lmsmith
April 10th, 2008 at 3:00 pm
Solars, are choppy… I think it is luck- when you get it the right time, and luck when you short it the right time…..
30Tony Ellis(TIMBUCKS: $24)
April 10th, 2008 at 3:12 pm
TITN CNBC pump
31Raman
April 10th, 2008 at 3:26 pm
WTSLA and HOTT. Both up today. HOTT posted better than expected same store sales (they were still negative from last year tho) and WTSLA was off by 10% from last years. Both up today because of overall market. I know this doesnt go with ur trading strategy, just giving a heads up to anyone interested in shorting. Good luck ya’ll
32Raman
April 10th, 2008 at 3:28 pm
also FEED, cant crack past 13.4 for the life of it, get in a short if u want. PEACE
33cacaosteve(TIMBUCKS: $14)
April 10th, 2008 at 3:31 pm
You thought you only covered half of PSTI, Tim. It wasn’t clear you covered everything…
34cacaosteve(TIMBUCKS: $14)
April 10th, 2008 at 3:45 pm
*I thought
35lmsmith
April 10th, 2008 at 3:52 pm
Akns, I believe was a great short- from high 8s… look at the pos now