Lot’s of trade recaps and breakdowns this chapter. Sykes starts out with a continuation of the discussion of $CUBA from the previous chapter. Useful explanation of the downside of forcing a trade. The chart was up big but Tim was early to enter and short on time. Worst thing you can do is force a short on the frontside of a move. But it can be a true test of discipline, especially when you have to leave for a while. So many times, and its frustrating, you skip a trade then come back at the end of the day and see you would have been up big had you taken it. But the flaw in this logic is you will ALWAYS remember the big profits you missed. But I can say this from TONS of experience, you NEVER remember the ones that would not have worked out. I have stewed for days, weeks, months on missed profits. But never gave a second thought to missed losses. Kind of difficult to explain but you truly need to have the “defensive back” mentality. Know there will always be another play/trade, and focusing on the ones you missed is pointless and purely detrimental.
After $CUBA, Tim breaks down, $MDBX, $GRNH, $LAKE etc. Very useful for a beginner to see someone with experience think out loud and detail the breakdown of entries and plans. Also useful to learn about hot sectors in pennystocks and why they are always the best trades, whether long or short, focus on the hot trend of the day.
The second half of this chapter is a live webinar by Tim Grittani @kroyrunner89. I assume that anyone reading this or checking out How to Make Millions is familiar with Tim Grittani. If you are not, take a moment to Google him and do some cursory research. Grittani is truly the “perfect” example of what is possible with penny stocks. Grittani is probably the best “rags to riches” penny stock trader I have ever met. That being said keep in mind to do what he did is damn hard and approaching impossible in the time frame that he accomplished it. BUT that does not mean you should not aspire to what Grittani has accomplished. He is a great, humble and just all around cool dude. He deserves all of his success and should act as an inspiration to each and every beginning penny stock trader.
I won’t go too in depth on the webinar since it really should be watched to get the best of it. Just know that Tim goes over big losses, recaps trades, details his process and does a great job of hosting this webinar. Probably the only complaint I would offer is there is a lot of discussion of trading promotions which as I’ve mentioned are basically dead as of today (January 2016). But of course there was no way for Gritanni to know this at the time of the webinar. But I would still watch it and pay attention, I’m confident paid promo’s etc will come back some day.
This chapter wraps up with Sykes discussing more short selling mechanics. As well as explaining why shorting on Friday’s and holding over the weekend is dangerous. As well as a good explanation of the fact that 99% of penny stocks will fail, but as a short seller you need to realize it may not happen on your timeline. You can be right a significant amount of time as a short seller but still go broke. For the newbie I understand this is confusing, but Tim does a decent job explaining it.
One of the shorter chapters, but that was refreshing, it moved along quickly and Gritanni did a great job with his webinar which took up probably 65% of this segment.
Rating: 4 out of 5 (Mainly due to the refreshing break from Sykes and Gritanni’s different perspective)
Continuation of CUBA from Chapter 7
-Post mortem after the fact a year or so.
Post Mortem on CUBA right after the fact going over big loss – too early on short
-Good discussion of “forcing” a trade with time constraints
-quick trade before leaving etc
-doubling down/adding to loser – BAD
-intersting use of a timeline via live chat with broker
-Elaboration on getting to big in size and “panicking” because of being to big
-Poor management of a trade. Instead of cutting loss, adding to a loser WORST THING YOU CAN DO
Review of trades from Profit.ly on CUBA
Dividends – shorts have to pay, normally not an issue since crappy penny stocks don’t pay dividends.
-Marijuana stock from $10-$90 in less than a week
-Crack in one day from $90’s-$70’s
-Small size only 500 shares but $3K profit
-Good parabolic/supernova example
-another marijuana stock
-Good example of taking a small portion of a move but netting solid profits
-Another example of “getting to big” you will cover for small profits if you have too much size
-First red day example – for multi day trade
-Good examples from other traders both good and bad
Quick cut to Grittani (Kroyrunner89) Webinar –
-Bouncing back discussion
-Recap of LAKE
-discussion of entering then being patient with adds instead of getting aggressive on adds
-Low Float (Float Rotation) on volume
-discussion of “going on tilt” then taking time off
-“Making money back/grudge trading”
-SIMH – low float – float rotation
-Another sizing in too big mistake
-TRading is stressful and challenging, great value in taking time off.
-Starter size /entry discussion
-Order entries – auto entry
-Pain question about losses, early vs now
-YOD – good breakdown
-Discussion of the “good old days” of promotions
-OTC’s dried up – lack of promo’s
-Start with daily chart
-wait for trade to come to you
-Green to Red shorts are tough on Nasdaq’s
-Risk to reward planning discussions
-NOthign wrong with adding higher as long as thats the plan, don’t let the plan slip
Back to Sykes presentation
-Nothing wrong with trading non pumps, but need to be careful
-Always be careful on Friday’s and avoid holding over the weekend almost always.
-Recap of LAKE other traders Grittani, Goode etc
-Remember these stocks will almost always pull/fail, but just NOT on your timeline.