Just Who The Hell Do I Think I Am And Why Should You Care?

It’s astounding how many lazy people refuse to click the ABOUT tab on this site when they want to know more about me. Instead I get anywhere from one to three dozen daily emails asking me—since I have an answer every email policy, I’m beyond tired of this. Guys, chicos, if you want to know how I got started, what kinds of stocks I trade, how I made so much $ so quickly, my life is an open book—literally–An American Hedge Fund. Hopefully this post can save me a few emails so here’s a quick rundown of my journey and how I’m gonna help you:

-My obsession to become the best tennis player led to a career-ending injury senior year of high school in 1999. Since I’d already gotten in to college early and the doctors orders were to rest, I had nothing to do so my parents gave me control of my $12,415 in Bar Mitzvah gift money to play around with and I opened a discount online brokerage account.

-My parents thought I’d lose everything, but after concluding all the most popular stocks were too expensive / random for me, I became a penny stock day trader and turned my little account into $2 million by the end of 2004 (no leverage used). The first $1 million was pretty much all buying breakouts (I focused on chart patterns, little did I know why the charts were so perfect), the second $1 million was pretty much all short selling (when I discovered their charts were perfect for a reason, manipulation!). (Trades, strategies used and lessons learned are all detailed in my instructional DVD PennyStocking)  

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How To Short Sell aka What Is Short Selling

With all the time I spend scouring the landscape for ideal trades, preaching against random market noise and for disciplined trading, I often forget to explain the bare bones basics. Starting now, this will change—every few days I’ll have a detailed lesson. Today, I write about my all-time favorite trading strategy: short selling , which involves betting on a drop in an investment’s prices.

So, how does this backwards-sounding strategy work? Ever hear the saying “don’t sell yourself short”? That means don’t believe you can’t succeed at something. Well, in short selling , that’s exactly what you’re doing—betting that xyz investment won’t succeed at increasing in value. Whether you’re betting against a stock, currency or commodity, you’re “selling that investment short.”

Short selling is exactly like buying and selling the way that you’re only too familiar with except the order is reversed—you sell before you buy. The old adage “buy low, sell high” still applies, here it’s just “sell high, buy low”. What’s worked for me is to short sell when a stock goes up waaaaay too high waaaay too quickly on waaaay meaningless news and buy it back when reason pushes prices lower, back to reality.  

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5 Penny Stock Trading Misconceptions

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.  

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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.
 

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Stock Market Opportunities Come And Go Quickly aka Always Be On The Prowl

No trades today, just a review of all the microcrap happenings…no matter how hungover or how many meetings/chores/classes  you have,  always always always review and prowl the landscape for potential opportunities

Isn’t that pretty? Awww almost as pretty as VVTV, MALL and HALO spiking at the open, now up just a little, breakdowns still possible, but justifying my decision to cut my shorts so quickly yesterday…little losses on the screen/website aren’t pretty, but they’re prettier than big losses kinda, more short sellers should learn to trade so scared…maybe then the category as a whole wouldn’t put up such god awful numbers all the time!  

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37 Key Points Of My Successful Trading Philosophy

Since the vast majority of emails I’ve gotten recently have come from people who are unwilling to read through all my blog posts, too poor/cheap to afford my DVD or too lazy to pick up my book to better understand my strategies, this is the post that’s gonna make everything real simple-like. Learning and profiting over the past decade, here’s what I’ve come to believe (in no specific order)

1. I love, use and recommend Thinkorswim as my broker. Yes, I get compensated for referring people, but I’d never endorse a product I didn’t use myself—best customer service, great tools, negligible commissions and great borrows on hard-to-borrow stocks I love shorting—all the way down to the $1-2 range, yes you CAN short under $5 (there’s no SEC rule against it, some brokers just suck)

2. The vast majority of investments and trends are unpredictable, be choosy

3. So, I stay fully liquid the vast majority of the time, constantly stalking potential prey

4. Every day it’s just random market noise, the best plays come about rarely, anywhere from 1-5 per month, focus on these and your odds of success go waaaaaaaay up

5. I don’t care whether the stock market goes up or down, as long as there’s volatility

6. Since Wall Street is so full of idiots and many companies will fail, short selling , or betting a stock will drop in price, is a very useful strategy and my specialty

7. Diversified long-term investing might work, but it can NEVER lead to my kind of gains—even with all my mistakes, 60 times my original investment, after 40%-taxes and hella fun spending a few hundred grand, in 9 years  

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