Short-Selling Lessons From a 7-Figure Trader


– He’s made I think six
figures the last two years, and literally all he does
is short stock promotions. – Okay.
(intense drumming music) So I’m still interested in this niche. Where do I start? How do I begin pursuing this niche? – Follow me on Twitter,
goodetrades, G-O-O-D-E trades, all one word, go to my
blog, goodetrades.com. – Yep, great resource, yep. – And I have lots of posts
about stock promotions and read about them ’cause certain kinds of stock promotions are better to short than others. One of my favorite is
boiler room promotions that I haven’t yet talked about. Yeah, like “Wolf of Wall
Street,” it still happens. There’ll be a bunch of guys,
I’m sure they’re all guys, sitting in a call center somewhere and they are calling up random people just trying to get them
to buy some random stock. And unlike, well, not a random stock, it’s stock they’re paid to
get these people to buy, and they will often get
paid a 35% commission. And that means between the
owner with the boiler room and the sales guy, they’re
paid a third of the value that the person is
paying to buy the stock. And lots of times now these
aren’t brokerages anymore. It’s not like you’re setting up an account with whatever the brokerage
was in “Wolf of Wall Street.” They’re saying, “Okay, well here, tell me how much you’re buying
in your ETRADE account,” and then they’ll look at
the time and sales and say, “Oh yeah, I see you bought
5,000 shares there,” and they’re selling
those shares right then. – Interesting, I did not, to be honest, I did not realize that’s
how it worked these days. So, okay.
– Yeah, because the SEC Infinera
really did good job smacking down the
brokerages that did that. – Okay, okay.
– So yeah, and there’s still a number of these, and they’ve continued to work a good thing for the owners of the boiler rooms or the people that pay them, is it goes under the radar. So people that follow stock promotions may not even notice anything because the volume’s going to be low, there’s not going to be any wash trading, there’s not gonna be any obvious promotion out there unless we hear
about people getting called. – Sure.
– And we don’t know what’s going on.
– Unless you happen to get called or someone you know or somebody posts down in a
chat room or something, yeah. – Exactly but they often end
up being the best promotions to short because there is no, they’re not traders, they’re
investors that are buying this, and it also makes them
one of the saddest ones because these are, often times, retirees getting completely fleeced. But when they stop the promotion they literally pull the plugs
on their phones and walk away. And nowadays of course
they’re all done using like Voice Over IP systems with numbers that aren’t
connected to a physical location. – Just like that guy that keeps callin’ me to extend my car warranty. – Yes, yeah.
(laughing) Yeah, I get calls like that too. (laughs)
And they just move onto the next stock, and then
nobody wants to buy the stock so you’ll see a stock drop
from a few dollars a share down to 10 cents a share. I have more than a couple times this year I think I’ve made 70, 80, 90% almost. I just short and then once it falls apart it does not hardly ever bounces. – So how do you find these though? – They’re hard to find. You can do scan for
stocks that have volume, and then I also do follow people, there’s on message boards–
– Okay. – And Twitter, if I find a stock that has an interesting looking chart that might be indicative of promotion I’ll try searching Twitter–
– Yep. – Searching message boards to see if there’s any evidence that… And usually some people will
say if something looks like, “Oh, I got a call from these people.” Me, I used to be on one of those lists, but I got tired BS’ing them. Some people, some traders will
literally play along and say, “Oh yeah, here, I buy 5,000 shares,” and then they’ll turn around
and sell those 5,000 shares right back the next minute. And they of course get an
advantage from doing that because they know how the
boiler room is doing its thing. And they know the minute that the boiler room stops making calls. – Sure.
– So that’s a nice thing of the stock promotions, boiler rooms, are some of the easiest to
short once you find them. – Now and again back to
trying to just kind of some of the road blocks of this niche you mentioned a couple
times a year so how often, these aren’t like just so the
viewer of the video knows, these aren’t coming up every day. – No, no, not at all. It’s a couple times a month. – Yep, yep.
– And then so this year, I think I might have short sold
six boiler room promotions. – And we’re recording
this in almost October. – Right.
– So yep, yep. – Now those aren’t the promotions
I made the most money on because I was confident
and took big positions and then held them a long time once they started to fall apart. But yeah, very few opportunities. – Which is great, again, I
mean if that’s your niche and that’s all you do. I just kinda wanted to let
them know that this isn’t, you know, they might
sound awesome and be like, “Whoa, this is great!” You gonna hafta, you’re
gonna be waitin’ a lot for the next one. – Yeah, it’s something good to add on to other trading strategies because it doesn’t take a lot of time and most of the time you’re not in trades so it doesn’t take a whole lot of capital and you can get some really nice returns. It’s not scalable, you can’t
make hundreds of thousands of dollars or millions
of dollars doing this. But one guy who’s been in
the Tim Alerts chat room moderating that with me for years now, Tim Lento, oddly enough named
Tim just like everybody else who does penny stocks– – Your soon to be born son
will be named Tim, right? (chuckles) – Uh, no.
– Noted. – But he’s made, I think,
six figures last two years, and literally all he does
is short stock promotions. And again, when it works
well it works well. – Thanks for watching our video. Be sure to comment below with
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4 Replies to “Short-Selling Lessons From a 7-Figure Trader”

  1. Hey Tim What are the time frames you use for your charts. For ex. 1 week 5min, 30 day 5min. I don't have stt so I would like to know the best times so I can customize my platform. Thanks

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