5 Penny Stock Trading Misconceptions

Tags: 101basics, Analogies, Basics, Criminals, DVD, Financial Media Circus, Haters, Manipulation, Pattern Day Trader Rule, Q&A, Rants, Short Selling, idiots

Thanks to my talent for self-promotion, I’ve been exposed to a crazy number of investors, traders and market theories. Here are a few misconceptions that keep popping up and are in desperate need of correcting:

1.You can’t short sell stocks under $5, you’re a liar and a fraud!

Ridiculous, of course you can! There’s no SEC rule against it, many crappy brokers just don’t allow it—hence their “crappy” title. If you want to learn PennyStocking, shorting low priced stocks is essential—that’s why I use Thinkorswim, I’m proud to do all my trading there—they rock!

2. Smallcap and microcap trading is a joke, if you want to prove yourself as a trader, trade large stocks, currencies or futures. Also, what kind of a trader is afraid to use leverage?

Thanks in no small part to the misguided, and ultimately harmful, teachings of yet another entertainment outlet masquerading as journalists, Traitor Monthly, many people think trading is about making the most, being the best and getting to the top the quickest. Screw that! Focus on long-term earning and learning—this isn’t a sport as your career doesn’t end when you’re 35-40 (it’s usually just beginning)—and look for high percentage profits wherever they might be. Yes, my niche will always be looked down upon cuz it’s unscalable and that’s just the way I like it.

All the smartest people ignore it so it’s an easier playing field—advantage me. I guess I’ll just have to console myself with annual profit potential of a few hundred thousand to a few million/year. Boo hoo.

And no, I’ll never use leverage—as these street peddlers are learning, yes, it can inflate profits, but it risks disaster. I’ll never advocate any strategy that risks disaster—short selling is risky enough as it is. Learn from the mistakes of the past—nothing is ever guaranteed…besides, if a strategy is worthwhile, the profits will be there and they’ll be hard earned and natural.

3. Based on xyz blog, xyz guru and xyz research, xyz company is definitely gonna hit xyz this week, you should be in it!

99% of gurus, ANALysts , tip givers, financial bloggers and investors are full of crap…if they were anybody worth listening to, they’d be willing to post and detail all their trades, investments and track records using their real names—oh yeah and answer any and all questions. And since to my knowledge, I’m the only one doing that, you have better odds of winning if you trade against these liars/frauds/marketers! There are so many angles over so many periods of time, the vast majority of them have around 50% odds of winning, usually much less. Focus instead on lesser talked about, higher percentage plays.

To get the odds comfortably on my side, I use historical price action (ex. PSTI has always dropped 20-30% within days after spiking…always) and market inefficiencies (ex. Stock promoters sending out spam emails…can’t last more than a few days). If I don’t have those two key ingredients, I’m not interested—and I got over missing out on potential gains long ago. This is why, over time, my strategy—when I remain disciplined—works cuz even if I have a loss every now and then—because the odds are on my side.

4. You shouldn’t be posting videos of teenage girls assaulting each other or Ashley Dupre Girls Gone Wild pics, have you no decency whatsoever!

LOL, I love getting these messages. They exemplify the kind of narrow-minded morality instilled in people when they were young impressionable children that helps create stock market suckers. Read my posts you damn cult members religious folk—I don’t condone such behavior, I’m just not gonna pretend it doesn’t exist (unlike you do with your cult religious leaders). Welcome to the hypocrisy our society has become!

If you want to learn how to profit from the trashiest companies in the world, you need to understand the kind of trash that’s out there. These bastards have no boundaries so to profit from their actions—legally of course—you must learn to think like them—as if you were an FBI agent tracing a serial killer. (Yeah, suck on that Timothy Plan, you schmucks!)

Hookers, criminals, psychopaths—they’re no different from penny stocks promoters and management—you just don’t realize it cuz they’re marketing professionals. Sure, there might be a few good people/companies out there, but I play the odds so it’s easier to assume the worst of everyone/every company (that way I’m never disappointed!). So whether it’s a person, place or thing, I’m gonna keep featuring these evildoers—all while detailing how quickly their popularity spikes—and fades—no different than the Supernova pattern I love shorting!

5. Last time you turned $12k into $1.65 million in 4 years, you’re a proven failure/fraud/loser if you can’t do it in 4 years again!

No deadlines. Given the combo effect of this not being the greatest bull market ever, my newfound conservatism, how much time my writing, speaking (University of Buffalo in 2 days!) and publishing efforts take away from my trading/researching—oh yeah and that damn SEC reign-of-terror-rule that wasn’t there last time (when America was free)—I originally guesstimated 10 years this time around. But I don’t set daily, weekly, etc deadlines—not like scum-sucking brokers do to motivate themselves to make more calls to get their commissions up—because experience teaches me that’s the most harmful thing for traders. What works best is thinking each trade is my last—that way I bide my time until I can’t stand being on the sidelines any longer.

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