Why Low Priced Stocks Crush High Priced Ones aka I Love Frauds & Failures!

Posted by timothysykes on Thu 10th of Apr, 2008 01:17:26 PM

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gt dane chih 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

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timsykes

FRPT helps proves my point even more today, daaaamn any of u guys in that?

lmsmith

Picked up 2k shares when it was $1.52..... I am laughing all the way to the bank!

Davey

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.

lmsmith

Out of it now........... TIM are you thinking about shorting this one?

Webster

Waiting to see if it stalls a bit again to jump in

Dhan

I'm in at 2.45 with over 5k. I mentioned in my post on last saturday and you forgot to answer my post.

timsykes

nah just reshorted PSTI at $4.25, this thing is a goner

Webster

Dhan - short or long at 2.45

Dhan

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?

GabeC

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?

cacaosteve

Are you still looking to cover PSTI around 3.50, Tim?

timsykes

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

timsykes

to best play these supernovas, u really just need to short then slip into a coma for a few days so u cant cover

GabeC

Ya looking at it every minute doesnt help much. Can't help it, my eyes are glued to the screen.

A

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.

lmsmith

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?

timsykes

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

timsykes

GTE cnbc pump!

timsykes

def. out of trades for today, mark it fake short at $4.28

Daniel

Bought 1500 VLNC today at 3.34 sold at 3.55. Profit $315.00
Paid for your CD's
Thank you Tim!

timsykes

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!

Andrew

Covered NCEN at 3 today. I wish i had read what you said about falling into a coma earlier!!!

Oliver

tim what do you think about SOLF? is there a possibility that itll go back down to $9-sh?

GabeC

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?

Tony Ellis

GTE lol

Tony Ellis

Cramer pump

timsykes

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

GabeC

ahh right, my bad, forgot my reading glasses.

lmsmith

Solars, are choppy... I think it is luck- when you get it the right time, and luck when you short it the right time.....

Tony Ellis

TITN CNBC pump

Raman

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

Raman

also FEED, cant crack past 13.4 for the life of it, get in a short if u want. PEACE

cacaosteve

You thought you only covered half of PSTI, Tim. It wasn't clear you covered everything...

cacaosteve

*I thought

lmsmith

Akns, I believe was a great short- from high 8s... look at the pos now

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TIM Trades

View All

Date	Stock	Buy	Sell	Net
Nov 6	QXM	$4.31	$4.80	$1936
Nov 4	COT	$8.66	$8.88	$642
Nov 4	QXM	$4.61	$4.89	$822
Oct 30	DDRX	$25.70	$26.53	$812
Oct 29	CTDC	$4.00	$4.42	$781
Oct 26	AWSL	$3.24	$4.10	$2516
Oct 23	RODM	$5.27	$5.23	$301
Oct 22	AMLM	$2.69	$2.97	$820
Oct 22	USEG	$6.12	$6.09	$85
Oct 20	CBOU	$8.93	$9.06	$243
Oct 16	VRMLQ	$16.79	$18.65	$2773
Oct 13	YONG	$11.05	$11.66	$1202
Oct 13	NPHC	$0.59	$0.71	$583
Oct 12	IMGG	$0.60	$0.70	$682
Oct 9	ZAGG	$5.50	$6.10	$2380
Oct 7	GVBP	$0.03	$0.27	$702
Oct 1	NPHC	$0.70	$0.85	$1482

Total: $92,304 (644%)