How To Know When A Stock Is A Pump and Dump

– So one of my favorite patterns is to short the first red
day on a pump and dump. How do you spot this? What is a pump and dump? I’m gonna answer it in this video. (posh electronic music) What’s up, Tim Sykes,
millionaire mentor and trader here answering your questions, telling you everything that I’ve learned over the past 20 years. I never had a teacher, so my goal is to be the teacher to
you that I never had. First, I want you to click the
link just below this video. I’m gonna include a book called The Complete Penny Stock Course, written not by me, but my student Jamil who has organized all of
my lessons into one book. I wrote the foreword, thank you Jamil. This is why I love teaching. Students are taking my lessons and trying to share it in different ways, and hopefully apply it and profit from it. That’s the whole goal here. I want to make you more profitable. Actually, leave a
comment below this video. Are you profitable or not? Say yes or no, and it’s not
the end of the world if not. Remember, 90% of traders lose. Most of the traders on Twitter who post a screenshot
at the end of the month or end of the year, or some BS screenshot, they’re not really profitable,
they’re just lying to you. Or they’re doing it for ego. They can’t really fess up to the fact that they’re unprofitable. This is why it’s so important
to be fully transparent, showing every single trade. Not just one screenshot,
not just one trade, every single trade. Good, bad, everything in between. Knowing exactly how
much you’re risking too, because I see some of these traders, they’re like “Oh, made $50,000,” and everyone’s like “Wow,
I want to make $50,000.” Then you don’t realize they actually used $700,000 or $800,000 to do it. Some traders are like “Oh,
I’m only gonna talk about “my stocks trades, not
about my option trades,” ’cause they got wrecked on options. There’s so much BS. Just be fully transparent. And if you’re gonna learn from somebody, require them to be fully transparent too. They should show you all of
their trades from A to Z. Nothing left out,
because you need to know, frankly, who’s qualified. It’s not about bragging, it’s about who’s real and who’s not. Remember, most traders lose. So this brings up my point, what is a pump and dump? Most penny stocks are scams or
they’re going to go bankrupt. I’m not a lawyer, I don’t care
what’s legal and what’s not. I just know that whether you’re a scam or you’re probably some
kind of sketchy company, you’re probably gonna
go nowhere in the end. That means that when
your stock is spiking, it’s usually a good time to
short sell or bet against it. Pump and dumps is when the company, or somebody from the
company, or the insiders or some investor, or some third party, pumps up the stock price
to get the stock up so that they can sell their shares, or they can do a financing. If it’s the company involved in the pump, which happens sometimes, they get the stock up
from, let’s say 10 cents to five dollars a share. And then when the stock is
at five dollars a share, they do a big financing with some random hedge fund based in Belize or Cyprus, and they sell millions of shares at, let’s say two dollars a share. So they sell it at a big
discount to the current price, but they still raise a few million dollars which, frankly, is a lot of money. Then the management can pay themselves nice salaries and nice fees for several years until they
can announce some new product and pump up their stock again. And then it crashes after
they do the toxic financings. That’s the game for when
insiders pump it up. And again, pump and dumps are whenever somebody pumps up the stock price. Whether it’s through a press release or a social media campaign, a lot of these companies like
to tweet “Big news coming!” Or they’re on TV or they
take out ads on Fox, they’re investing money into
the promotion of their stock. Why are they doing that? Because they want their
stock price to go up. Maybe the company isn’t
even gonna do a financing. They can’t even find somebody to raise millions of dollars at, let’s say two dollars a share. So they’re just gonna sell their shares. A lot of insiders just will
sell when the stock is high, and they’ll cash out. And the CEO will sell half their position, or some third party, who’s
paying for the dissemination of some email blast, will sell a million shares at pumped up prices while paying $300,000
to send out email blasts to pump up the stock price. You pump up the stock
price, you dump the shares. That’s what a pump and dump is. So anytime a company is advertising on TV, advertising on social media, there’s email blasts going out or WhatsApp blasts going out, I mean, apparently
they’re promoting it on, Telegram is another app. I’ve seen so many different
kinds of promotions. Whatever the case, the company is putting money, or somebody involved in the company or invested in the
company, is putting money into pumping up the stock price, those stocks always fail. Why? Because they’re not putting
money into the actual company, into the actual production
of a product or service. They’re not investing in the company, they’re investing in the stock price. And the only reason that you
invest in the stock price is to get the stock up high
enough so that you can sell it. Pump and dump. Why is this useful? Because whether it’s illegal or sketchy, I don’t care about that. I’m just trading the price action. I’m trading the technicals. You can short the first red day, okay? So if a stock that has been
hyped up on social media, or on TV, or in an email blast,
or multiple email blasts, if it’s gone up one, two, three, five, 10 days, 20 days in a row, the higher the better. Because it’s like a jet without any fuel, right? So they’re putting in all
this fuel into the jet to get the jet as high as possible, which is the stock price, and then once the promotion is over, which means that whoever
paid for the pumping has sold off all of their shares or maybe half of their shares, maybe they don’t want to sell all, so then it would look
suspicious if the CEO just sells all their shares. So maybe they sell half their shares. You have that first red day in the chart. So after five, six, seven,
10, sometimes 20 days in a row where every single day the stock is up, it looks like it can do no wrong, maybe there’s a press
release everyday too. So it’s usually a
coordinated campaign between Tweets, press releases, maybe
there’s an ad campaign on TV, the whole goal is to get
people believing in the company and buying the stock. In that first red day, usually when the volume
drops a little bit too because there’s not as much buying because maybe the promotion stops. Maybe they’re not sending
out as many emails, there’s not as many tweets,
there’s not as many ads on TV, that is the first sign
that the pump is over, as least for the time being. Sometimes they lure in shorts
and then they pump it up. They take one or two days off. I’ve seen that happen sometimes too. So this isn’t 100% exact science. But the beautiful thing about pumping is that it is predictable. Because they’re specifically
pumping it for a reason. Once they sell their shares, there’s no reason to pump it anymore. They just want to try to
create a soft landing. This is what a lot of
penny stock promoters do and a lot of sketchy market makers and sketchy people involved
with these companies. They don’t want the stock
to crash 90% in one day, ’cause that opens up a lot of questions. Why did the stock go up
for so much, so long? Everyone who bought in, a lot of financially naive
people who believed these pumps, they start wondering, why did the stock just
drop 90% on no news? Well, you don’t realize that maybe you were just invested
in a boiler room operation. Also, there’s telemarketing phone calls that still go on in crazy countries, like Belize, Cyprus, Panama, Philippines, I’m trying to think where some boiler rooms that
I’ve seen have been based. Spain, France, Great Britain, China. A lot of overseas, Singapore. A lot of overseas boiler rooms, that frankly, if you’ve
The Wolf Of Wallstreet, or the movie Boiler Room, they’re just pumping up BS stocks. “Oh, we found this amazing gold. “Oh, this is an amazing technology. “Oh, we just found the cure for cancer.” It’s all BS. And again, they don’t
want it to drop that much all in one day, because that opens up potential SCC investigations, potential jail sentences for
the insiders or the promoters. So usually, they like to drop it, but they still have to
support it a little bit because without any market
maker support or any promotion, these stocks are worthless. They’ll go to zero. But they can’t let the public know that all in one or two days, or even a week, ’cause then they’ll get
too many complaints. So when they stop promotion, they still have to buy a little
bit to support the price. The good news is that
you can predict that. So not only can you short the
stock on the first red day, usually you get a 20%, 30%,
sometimes 50 to 70% drop in one, two, three, or four days. But you know that usually the promoters are gonna support it. So after you get the big drop, you can also get a nice little bounce. This is a number five pattern from my penny stocking framework guide. Will link that underneath this video too. So we’re looking at, if you
know my seven step framework from my penny stocking framework guide, we’re looking at a number
three and a number four. When the stock is rising,
the number four is the crash. Number five is a dip buy opportunity. Then you usually get a bounce, ’cause the promoters create a bounce to make it look like
it’s naturally trading. And then you can short
that bounce as a number six from my penny stocking framework guide. And then you have a number seven, which is like the long kiss goodnight. And usually, these stock
are never heard from again. Until they do another promotion, which is another few weeks or another few months down the line. This happens all the time. And whether the stock goes
from 50 cents to seven dollars during the promotion and
then crashes to two dollars, or whether it goes from
two cents to 20 cents and then crashes, there’s a lot of pumping going on, and a lot of dumping. And again, I don’t want the
promoters to get shut down. I want them to do less cocaine. I want them to be more
effective, you know? If there are more
promoters and more pumps, then that’s just more
predictable plays for me. I love every single pump. I’m very grateful. If you know any promoter,
give them a handshake. Say “Thank you for being so unethical. “Thank you for being so outrageously “uncaring for other people. “Even though we know that your soul “is going straight to Hell “and you’re gonna burn
in eternal damnation, “thank you for pumping this stock “and creating such predictable patterns “over the past two decades.” I would shake their hand, and then I would smack
them for being such apples. A lot of financially naive people get sucked into these schemes. If you ever see me on Twitter, follow me, Timothy Sykes, @timothysykes on Twitter,
that’s my username. I only have one profile. Don’t believe any of the
non-verified profiles. You can see me sometimes
taking on these people who believe in these pumps, okay? They go down with the ship. They’re like “Sykes, you’re lying.” And I’m like “What do you
think I’m lying about exactly?” ‘Cause I’ve done a lot of
exposes on these pumps. I just highlight their own SCC filings. Nobody reads the SCC filings, where they say they have very little cash, where they say they’re probably
gonna be out of business in three to six months. So it’s in their own best
interest to do a pump, or some third party does a pump,
which they’re not aware of. This is a classic thing
where these companies, they love saying they’re unaware of it. It just so happens that there’s a coordinated email campaign. “Oh, we have no idea.” I mean, it’s laughable
how many times it happens, and it’s kind of sad how
many people fall for it. So if you see me on Twitter,
I’m usually fighting with somebody who’s invested in a pump. They don’t believe me,
and I’m like “All right. “It’s okay you don’t believe me. “Just lose half of all your money, “then you’ll learn the hard way. “Then you’ll come back
to me, then you say ‘Tim, “‘I’m sorry, you were right.'” And then I’ll say “I’m sorry
you don’t have anymore money.” ‘Cause now, you’re usually dead broke. You can’t even be my
student if you wanted to be. This is how this game usually plays out. It’s played out so many times, I’m not even amused by it anymore. It’s just really sad that they lure in people to believe this crap over and over and over again. Spongetech was the most
famous pump and dump. They actually put out
a press release saying “We’re suing short seller
Timothy Sykes for his lies,” and all this stuff. And I was like “Oh damn. “All I did was highlight your SCC filings. “All I did was highlight
what you put out.” And sure enough, I was pretty scared actually,
’cause I’d never been sued. I still have yet to be sued, right? But during this episode, the next day, or maybe
it was two days later, the CEO of Spongetech
got arrested for fraud. Turned out, it was all
fake, it was all a lie. So I never actually got served. They put out a press release, some people were like “Tim
Sykes, you have been sued. “I saw Spongetech sued you.” No, they put out a press release saying they were gonna sue me. They never got a chance to because they were arrested for fraud. So if they had sued me, it probably would’ve been, like
a little feather in my cap. I don’t want to expose this kind of stuff, because frankly, again, I’m
grateful for every pump, but I can’t help it
because I want you to learn how this game is played. You can ride it up. There’s nothing wrong
with buying the stock mid pump or early pump. But late in the pump, even if it goes up for a
few hours or a few days, you’re risking a lot. It’s either gonna crash a lot in one day, sometimes it just gets halted by the SCC. So the higher these things go up, the better they are for shorting. And again, I’m look
for that first red day. I will give you one note: if you’re waiting for the
first red day to short, often times there’s no shares to short. Because everyone knows about
shorting the first red day now, thank you to my lessons for kind of popularizing this strategy. ‘Cause people are like “Oh, shit. “This does work pretty much all the time. “This is crazy.” So now you kind of have to
anticipate the first red day, which isn’t as easy. Which frankly, is why I don’t really short that much anymore. It’s gotten harder, unless you have a big bank
roll, unless you’re experienced. So for me, as a teacher
who teach people with not big bank rolls and people
with very little experience, I don’t want you necessarily risking so much shorting
these pump and dumps. ‘Cause they can go on
longer than you think. And then trying to find shares to short is a whole ‘nother battle. So for me, I really like dip
buying the morning panics. Again, if you click the
link just below, two links. The Complete Penny Stock Course is a book by my student Jamil. We talk about these patterns. And then also, my penny
stocking framework guide, we talk about these patterns. But recognize that any company
being hyped up on emails, or on tweets, or on TV, is a pump. Whether you want to call
it a classic pump and dump or a quasi pump and
dump, it’s being pumped. And what comes after the pump? The dump. So be prepared, be ready, be cynical. Don’t trust these companies,
don’t trust management. Expect the worst out of everybody, and you’ll never be disappointed. Hey, Time Sykes, millionaire
mentor and trader. Thank you for watching my videos. I hope that they help you. I want to share everything that
I’ve learned over the years. You can check out more
videos right over there. And also click subscribe so that you can watch all of these videos, get that knowledge, and become
my next millionaire student.

100 Replies to “How To Know When A Stock Is A Pump and Dump”

  1. Not profitable. Started trading on March 1, 2019 with $500 in Robinhood/Webull. Current balance: $297.39. Losses are bigger than wins.

  2. I’m consistent. “Consistently losing money! Lmao! 3 years ago, this year I’m actually profitable , nothing much to brag about but enough to keep me in the game!

  3. The first months I was making a good profits..but I have like 2 months that I feel lost..but I keep it up.i am not given up..

  4. Not profitable yet. Keep losing a little. But I heard you loud and clear when you said to "cut your losses quick"

  5. Not profitable I’m a Tim challenge student and I’ve turned into a degenerate Gambler after my first huge loss It’s been a tough road … can you do more videos on the psychology and discipline side of the game???? …Its been hard to cut losses quick under the pdt …would be easier if I could get out knowing I can get back in and out as much as I need to …on perfect patterns of course

  6. Hey, i hope you see this question. A few traders tell me that pump and dumps are becoming very rare these days. How often in a year you see a pump and dump?

  7. I'm not profitable right now mister Tim but later on I will be profitable by learning new material from you thank you very much for your time I appreciate you

  8. As usual Tim, ANOTHER awesome educational video. I'm now 3 months into studying this amazing new venture. I was forced to take a new direction after undergoing spinal surgery. I'm truly grateful I found you. I never imagined studying could be so much fun. you are truly inspirational. I have no plans yet to make my first trade, so not profitable yet but studying all day, every day. No days off. thank you so much for all these awesome lessons!

  9. Thank you Tim!! Already read Jamil's book. It was great for me starting out. Your teachings are always appreciated and valuable. Thanks for letting us know what is behind pump and dumps instead of just teaching the pattern to look for. It creates better understanding for those of us not trading yet. I saw you in Chicago, it was the greatest and helped me with gaining confidence in trading. Already registered and ready for Florida T&I Summit!!! Not profitable YET because I haven't started to trade, although it will be soon, I want to go to the Summit, register for the silver program, paper trade and then dip in! Still studying!!! No rest! Thanks for being so dedicated to us!!!

  10. To me it's profitable if it basically ricochets from it's lows to it's highs constantly. Check out ticker xlwh. I just recently turned my 100 dollar invested into 5k when I invested in Lumif, it went from 0.01 to 0.58 over and over again. Just get good with how to buy and sell, I get the best results with I do a buy limit because these stocks change so much a limit order is basically a needle in a haystack for your broker

  11. Not profitable, still STUDYING. Not comfortable investing real money yet. By the way, Tim Sykes, how's your back?

  12. no im not profitable I have the hardest time taking profits or stoploss because im scared to lose my day trades and ultimately I keep losing cuz I don't want to use a day trade for 20$

  13. A broke guy from India currently studying and preparing to probably be your first successful student from India. You are awesome.

  14. But how to trade us stocks or penny stocks in general if you are from Europe? manny of these platforms require SSN and US citizenship

  15. if you want to win in all stocks you have to play the numbers, all stocks have these numbers and they never change.
    you buy and sell on the same numbers and you will be very pleased with the results.

  16. Hi Timothy! Great video! Very insightful information. Had no idea what a Pump & Dump was. I do now!

    What do you think about the meteoric rise of the BYND stock price (**NOT a penny stock***)? Their IPO launched on May 2, 2019 at about $30 USD approx, now it's at $222 USD approximately!?!? 😞😟

    There's been SO MUCH press on it since it's IPO launch. Any thoughts?



  17. Tim, I need to understand, when stock price is bring pumped out usually comes with an email if you sign up to them. At the very bottom of the email is the legal stuff which also states who is pumping, hire much they are being paid and for how long the pump will last. A good idea would be to buy early and wait a couple is days before the pump is due to end and then sell??? Did this sound about right.
    Would appreciate your thoughts

  18. Still not focus on profit yet, but I am learning how to trade. I am putting ton of times to study the trading knowledge and skills and will get there in the future.

  19. I've been profitable sense I have started. started a suretrader account may 1st 2019 with an initial deposit of 1400$ I currently have transferred my account to lightspeed and have just over 37000. I have pulled out roughly 15000 in profits for myself to.
    I am not a student of Tim Sykes but follow ross Cameron with warrior trading. (main reason why I was able to grow my small account so quick) I do follow Tim and Steve also and take selective info from Tim Sykes. he does no what he is talking about but I fear he is a better teacher then profiter from the market

  20. 55% profitable, verified on I haven’t been trading a lot in the last couple years but I’m back lately, 4 wins in a row, small but my positions are small as I am feeling things out. Rule #1 is the most important for sure…I had to learn the hard way after about a year of trading and it was rough…when I should have cut losses I double down and bought more, listening to an insider of the company that was going to have a breakthrough product…it never happened. Had I stuck to my pattern trading I would have saved a lot of money…but it had to happen!

  21. Tim always makes me laugh so hard! Love watching these videos, great value. Thank you and keep them coming 🙌

  22. This is the kind of information all the world need to know , thanks Tim for helping us with your amazing experience…👏🏼👏🏼👏🏼👏🏼👏🏼🙏🏽

  23. i used to buy the pump, but then it got dumped. dumbo. well. now i don't know to buy sell, wait. well dumbo did grow, so will i. i did like that you don't recommend the shorting. for newbees.

  24. I feel like this whole video was a pump and dump. I never learned how to actually profit from a pump and dump even though you said that you knew how to spot them. Hmmm.

  25. I'm not profitable at all. Inherited 165000 dollars and picked some very bad stocks for long time. Deutsche Bank, Mallinckrodt, Microvision, Mattel… Now I have only 40k. But I've found you, Tim Grittanni and Steven Dux. I work on my trading every day and I know I'm gonna be profitable soon. Thank you for the wisdom you share with us and the motivation. Best wishes!

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