Saturday, 25 October 2014

Avoid the pump and dump scheme



Have you been a victim of the pump and dump scheme? Do you even know what it is? No, huh? 

Well this article will give you the complete details about this entire program. Let us get an insight about it.

What is pump and dump scheme?

This term relates to the disregard of the laws and regulation by any company or investors. When a company artificially exaggerates their stock prices by boosting the misleading or false information about the company and find out easy ways of earning money with illegal and fraud practice it is known as pump and dump scheme.

What are the methods used by schemers of pump and dump program?

·    One of the easiest and most common methods is promoting through message boards. This creates awareness about the stock and waits for the individual who get trapped and buys the bait.

·     Signing up for free newsletters is yet another method or tactic that is used by the pump and dump schemers. Once you provide with e-mail address you will delivered with different reports regarding the stocks of the particular company or investor.

These are the two common and the most popular tactics that are in practice in the pump and dump scheme

Be aware of this illegal scheme

Pump and dump scheme is an illegal procedure that has come more into light because of the advent of the internet. This usually targets the small and micro cap stocks since it is easier and simpler to manipulate and misrepresent. 

It is your responsibility to be cautious and careful while you go for any investment and get trapped into any scam. You have to make sure that you always execute your own research work and studies so that you are always on the right track and avid such scams and frauds.

Sunday, 2 March 2014

Don't Be a Follower, Be a Leader


            First off, if you haven't taken the time to read through the post about books that I recommend, and you're new to the investing world, take your time and find knowledge first. If you want to survive out here, your mind has to be operating on levels that leave no doubt in your mind. In this business, every decision you make, you will have to live with it. The same is true with life, but when it comes to money, it hits you harder than anything else.
            Scrolling through Yahoo Finance articles and websites like Seeking Alpha are not going to give you an edge if you decide to follow blindly. Want an example? Seeking Alpha had an article by an author about how great the company PHOT is and the stock went up, however, days later, another author posts how PHOT is a sham and its contract with another company is practically nonexistent and unknown to an employee they spoke to and the stock tumbled, in which people probably lost thousands based on the outlook that this is a long-term hold in the booming marijuana market.
            Is this the article's fault if you followed? NO! Every decision you make is your responsibility and this isn't a joke. This website isn't here to tell you which promising penny stocks to watch, I already gave you a resource for that here. Before trading, you must do due diligence and study everything inside out. If you have weak ambitions, weak work ethic, you will get weak results. I have to remind myself to stay disciplined and cut my losses quickly too, but I know all of this pays off. Stay persistent and keep learning.

UPDATE: 

Superman telling it how it is at 25:30 in this video:


Sunday, 2 February 2014

Chat Room Reviews - More In-Depth


            Don't have time to research stocks and just want to know which small cap and penny stocks to watch from an experience investor? Trading by yourself is cool as is, but doing research takes incredible amounts of time that's why trading alongside other people and being able to discuss your thoughts and ask questions is a really beneficial thing for a day trader and should be an option for you to look into. I could make it without chat rooms but I would have missed out on so many opportunities and also would have a much more boring time during trading hours (I guess long-term investors don't have these problems). Starting off especially, I learned that some of my thoughts were on the right track but I was missing pieces of information that other gurus helped me fine tune and become a better trader.
            You have at your disposal, many free stock forums or subreddits (Reddit.com) like /r/investing, but the response times on these are much slower, and as a day trader, especially in the penny world, everything needs to be quick! This is why I prefer to talk real-time.
            Personally, I am subscribed to TimAlerts and a friend of mine is following Superman's picks so we get the best of both worlds while we're trading. The great thing about these two is that they provide you with watch lists, lessons, chats, and many more tools that can help you become a better trader. TimAlerts is cheaper, which is a huge plus for most beginning investors, but with Superman you get more picks and they do very well so that's the reason that they're more expensive. I will, however, say that Tim's lessons are a lot better than Superman's and that is why I recommend you either join TimAlerts, Pennystocking Silver, or SuperAlerts, and just stay away from Superman's more expensive package.
            In the chat rooms, Tim will announce that he has purchased a stock. This is not a moment to blindly follow or you will lose money. So what's the point of subscribing? Well, if you're subscribed to his Pennystocking Silver, you get video lessons that teach you how to wait for set ups. When Tim posts a pick in chat, you have to understand that he had to put that order in first with his broker, he then has to confirm the price he got in at with the market order, and then he has to post it to chat. With his position size, by then, the stock is already at a different price because penny stocks are so volatile. The trick is to understand his strategy, discuss with people in chat any possible set ups for bounce plays or break outs, any intriguing small cap stocks to watch, and then essentially be Tim and put your order in with your broker.
            I probably haven't mentioned this before, but when trading stocks, you will need to have Level 2 quotes. The price of these pink sheets changes so fast, so often, that you need real-time data or you'll sink. Check with your broker or check out a free trial of Prodigio. Any questions? Post in the comments.

Monday, 13 January 2014

Best Penny Stock Brokers



            Let’s say you know the fundamentals to trading and you want to start trading right this moment, so where do you go? You need a broker that will buy the stocks on your behalf, and sell them when you choose (also to short). So from the many to choose from, which one is the best one? And specifically, which one is the best penny stock broker? My guess is that like me, when I started off, you want a broker with low commissions, low minimum deposit amount and a trading platform good enough to get you the trades you want in the quickest way possible. And there is one broker just for the job…okay I lied: that’d be just too perfect. There are a couple of decent brokers to choose from, they each have their positives with their fair share of negatives. Before reading, Canadians, your brokers can be found in this post.

 
TD Ameritrade / Think or Swim

            A couple of years ago, many would agree that Think or Swim was the best broker with its great trading platform and the Think or Swim fees were a mere $3.95 per trade, but TD Ameritrade decided to buy Think or Swim for a whopping $606 million dollars. Now, both brokers (essentially the same one) now have a $9.95 commission fee. Although the trading platform is beautiful and all, for a beginning trader with little to invest with, these fees can eat up your profits quite heavily. On top of that, if you're willing to short penny stocks, you can't short the ones under $5 and they don't have all that many to short in the first place.

Interactive Brokers


            Now this one is tricky ladies and gentlemen. It’s the one I use but don’t get too excited because it does have its drawbacks. For one the commissions are only $1 for 100 shares and under. Terrible I know. Jokes aside, the $1 commissions are a fantastic feature for any prospective trader to have when starting anew but what about cheap penny stocks? Well, if you're purchasing these low priced stocks, you obviously need to buy shares in the thousands so each share after 100 will cost you $0.005 a share. Another bonus about IB is that they usually have shares to short, whereas TD usually won't even let you short a penny stock. What may turn off some people willing to deposit their money on IB is that their minimum required deposit is $10,000. You may be asking how I managed to get an account with them if I did not have $10,000 to start with. Well, if you are under the age of 26 when you make your initial deposit, all you need is $3,000 USD and they’ll be willing to accept you. As for the Interactive Brokers webtrader, it isn’t as nice as TD Ameritrade but when you compare the commissions, IB is my preferred broker. One thing that IB has problems with is customer service, in which TD supersedes it, but you win some, you lose some.

SureTrader

            It’s tough to start writing about this broker because it’s not the greatest broker out there. So why am I adding a SureTrader review? Well, their commissions aren’t bad, being at $4.95 per trade, but there are many negatives and one big positive to point out. Uploading your money to SureTrader is a relatively quick process (of course they want your money as quickly as possible), but what pisses me off is how long it takes to withdraw money. Also, they have ridiculous withdrawal fees and monthly charges. What makes this broker shady is that they are offshore, so they are not subject to the same laws. This also works in their benefit because they are not bound by the SEC’s pattern day trading rules which requires you to have a minimum of $25,000 in order to make more than 4 day trades within five business days and some other bogus rules. Still, there aren’t trades every day so this may prevent you from making stupid decisions and only playing the sure stocks that match the patterns. Many people use SureTrader because it has shares to short, but many people reserve them way ahead of you so this broker is not that beneficial.

Scottrade

            This broker may not be ideal choice for you if you want to short stocks, as they don't have most of them available, but if you're trying to catch these stocks as they shoot up and rise exponentially, this could be the trader for you. The cost of each trade is $7 and you can easily afford that when you make it on time for the pumps that the mailers and marketers put out. They do, however, charge 1/2% transaction fee for any stocks under $1 so if you trade these small ones the fees will add up over time. Their customer service won't be as good as the big guys but that's a trade-off.

So which of these is the best broker for penny stocks? It’s all a matter of what works for you and what your conditions are. If you’re shorting micro cap stocks then these three (sans Scottrade) are the most likely to have stocks to short so you have to see which one’s benefits outweigh its negatives. Ask away in the comments section.

Canadian Discount Brokers


            Oh Canada. You sure don’t have many brokerages to choose from. The big banks have teamed up in order not to compete with each other, which isn’t a good thing for the consumers (much like how Bell and Rogers operate). It’s a Canadian thing. What the big banks offer you are $9.99 commissions – oh wait – actually, it’s only $9.99 if you have over $50,000 in assets. If you have anything less than that, you are looking at $19.99 to buy a stock, and then $19.99 to sell it. That’s a whopping $40 to trade one stock which is ridiculous, especially when you’re starting out and/or young.
            There is some silver lining and Canadian discount brokers have been appearing more and improving in order to compete with the big guys. First on the list, we have Quest Trade. With Quest Trade you are able to buy stocks for a generally low rate of $6.95 which appears to be pretty good. The small downside of this is that they will charge you an inactivity fee of $19.95 each quarter if you have under $5,000 in total equity (unless you are under the age of 25) so you practically need to get to making money pretty quickly if you deposit small funds. You can sign up for a free trial to feel out their web trading and there are YouTube videos you can watch that’ll teach you how to buy, sell and short using their platform.
            Next is VirtualBrokers which charges $6.49 per trade which is also great and, like Quest Trade, they give you the ability to try out their platform through the use of a free trial. What I loved about Virtual Brokers was the very simple application that did not take up a lot of your time versus the other guys. Their support is stellar compared to Quest’s and they’ll be able to assist you fairly quickly. Like trading ETFs? Well trading ETFs is free with them so even more reason to join. What do I love most about VirtualBrokers though? Their penny commission structure makes buying penny stocks cheap in the beginning, but you also have the option of just choosing their per trade option and only pay $6.49. You get to decide how you want to play!

$ 0.01 per share if share price ≥ $1.00
$ 0.005 per share if $0.25 ≤ share price < $1.00
$ 0.0025 per share if share price< $0.25
Minimum commission is $0.01 and maximum capped to $9.99



Wednesday, 8 January 2014

How to Find Pump and Dump Stocks



            Alright, let’s say you don’t want to invest your money into the DVDs or video lessons that I’ve bought. It’s ok. I’m a big fan of giving away information that I know, on a limited scale of course. You can’t know everything I know. That being said, every day I go on Yahoo Finance’s website and find the biggest percentage movers. I’ll even give you a freebie right here: this is the link. Bookmark it, put it on your homepage, do whatever you want as long as its embedded somewhere in your trading.
            Once I visit that page, I can see all of the companies in the United States market who have made big moves in that day. What I’m looking at is stocks under 10 dollars, but more specifically though, I’m very interested in NYSE and Nasdaq penny stocks. It’s surprising when a company moves in extreme double digits, but in the penny stocking world, that is not necessarily so. These things work on hype and a newsletter is what gets them going so quickly because people dream of something worth less than a dollar jumping into double digits and making them rich.
            This dream is not much of a reality and these stocks will eventually crash and burn. So when you find these stocks on Yahoo Finance, go through the news, look up the businesses, do as much research as you can. There are stupid amounts of companies that are said to be the next big thing but hype is hype, but it doesn’t last, and that is where a short seller can make his bread and butter. Not every small company will fail so this isn’t a strategy I am creating for you and this is not something for you to follow just because I’m telling you some of the things that I do. Anything you do is at your own will.

Mid Cap Stocks



            Where most of my success has come from is from stocks under 10 dollars but occasionally I do dip my feet in mid cap stocks. The reason why it does not happen often is because you need to have a boat load of money to make as much money as you can when you invest in the ones I do. The problem is that the ones I deal with have way more risk than those that cost more, but even I’m sane enough to stay away from sub penny stocks.
            But for the sake of talking about these mid caps, if you have a bigger bankroll then these may be easier to buy for you and give you a bigger piece of mind. Most often, these stocks have less volatility and will be investments for the long term. There are disagreements on chat boards over which are the best midcap stocks for long term and there will continue to be, and you won’t find that here. I’m not here to give you financial advice.
            What any person in the market would tell you is to build a portfolio of stocks that are in a field that interest you because it’ll be a lot easier for you to know that market and make the best investment according to you. For instance, let’s say video games are what interest you most, when Take Two (the publisher of Rockstar games) announced that Grand Theft Auto V would be delayed a couple of months, the price of the stock dropped immensely. But wouldn’t it be obvious to you, as a video game fan, to know that the pre-orders of that game were set to break all records in terms of sales? Those who invested when the stock dropped because of fear and not logic made an incredible amount of money once the sales numbers were released. This is how you have to think when investing in bigger and more legitimate companies.