The Biggest Risk in Penny Stocks for 2020


– You can lose, not just all your money, like if your broker goes out of business, but you can lose many
times your amount of money. (upbeat music) Another big risk right
now is short selling. Raise your hand if you like short selling. Let’s see who’s here on the dark side. Michael, good, I knew that. Yeah, some people like it. No, mind you, I’ve made
millions of dollars short selling, but at the same time, it is very very crowded. What we’ve been seeing in the
last one, two, three years, specifically in the last six months are a lot of short squeezes. A lot of these stocks, you
know, that used to spike from like one to four in a
few days, now they’re going from like two to 20. BPTH, raise your hand if you remember BPTH earlier this year. $70, right, five to 70 in like a few days. Some short sellers did
not make it out of that nasty short squeeze. So that’s something to understand, when a strategy gets too hot, when everyone starts using it, it usually stops working. Look at crypto stocks, okay. Look at, or crypto currency itself. Everyone’s like oh,
crypto’s going to a million. So just be careful, okay. Shorting can work well, especially if you have a big account. Especially if you have experience. You’ll hear a lot of these speakers. Guess what, they made a
lot of money short selling. I made a lot of money short selling. But a lot of you guys
have a small account. You have no experience
or little experience and it’s just very dangerous. So recognize that danger before you risk your hard-earned money. The stock market is
not some constant thing where, you know, like with math, five plus seven always equals 12. The stock market changes. Strategies change, patterns change, and sometimes the worst
stuff can actually happen. And with short selling, you can lose not just all your money,
like if your broker goes out of business, but you can lose many times your amount of money. If you’re betting against BPTH and it goes from five to 15 and you’re like, this is, this is excessive. Let me just short a thousand shares at 15. It’ll probably come back down to 10, and your goal is to make $5,000 bucks, and you’re putting up $15,000. What happens when BPTH goes to 30? Now you’re losing $15 a share? You’ve lost $15,000. What happens when BPTH goes to 50? Now you’re down $35,000. What if, when it goes to $70? Now you’re down $50,000 plus
on your $15,000 investment. So it doesn’t happen everyday,
but again, it does happen. So it’s very dangerous
for shorts right now. But it makes no difference to me whether you go long or short. Some people are like, oh,
you’re just a hater on shorts. It makes no difference. I want you to be successful. It’s in my own best
interest to see you make as much money as possible. But it does me no good
when a student blows up, or multiple students blow up and you know I’m not
gonna call out any names, but I’ve gotten a lot
of messages from people who ignored my rule number one, who have used the wrong broker, who have gone aggressively shorting, and it just, it doesn’t end well. And I don’t like saying I told you so. I don’t know everything, but I do know where the biggest risks are, so I want to talk about them, and I want to warn you against them. As a teacher, it’s kind of crazy because I want you to understand, I trade with a small account and I donate all of my
trading profits to charity. My whole priority is on teaching, okay? So I want you guys to understand that if you become
successful, that’s good. If you lose all your
money, that’s bad for me. So everything I do is trying
to be focused on you guys and it’s kind of a weird perspective, ’cause a lot of traders
trade with a big account. There are these chat rooms where a trader might put in $500,000
in a low flowed stock. Say, buy this stock, the
whole chat room buys it, and then 16 seconds later,
sells it for $27,000 profit. Look, I made $27,000 in 16 seconds. Yeah, but you kind of used your chat room to do that and they didn’t make money and you made a lot and now
you’re bragging about it. So I need you to understand
the rules of the game. I don’t want you following my alerts or picks, I don’t want
you following the picks or alerts of anybody else. The reason why we share
this stuff in real time is to teach you the
mindset and the process, so that you can see, oh,
this is what Tim is thinking right now, this is what
Mark Crook is thinking right now, and you can learn in real time. And we found that works very well. In the past, if you dig
through my video lessons, I have done some trades
where I did an alert, and I was like, I’m just gonna record the whole trade and I’m not gonna alert it and people felt cheated. I tried my best to trade
with a small account and I try to teach the process. I know by the end of this conference, you’re probably gonna get sick
of hearing the word process, but it’s important. That is what we’re trying to teach here. That is what’s gonna change your life. Not any one pick. Some strategies work
better with big accounts. You have to understand that. So you have to realize
there’s a difference. A lot of these short
sellers can average up, if they have a million dollar account and they’re shorting
$30,000 worth of stock and then $50,000 and then $70,000, they can take multiple entries. If you look at the way that I trade with my small account is because I get one entry. And I’m either right or I’m wrong. It’s very simple. I don’t usually average
up or average down. Every now and then I do, but I specifically trade, wait a minute, I have a small account,
how do I try to make $500, $1,000, $2,000? ‘Cause I’m teaching the process. Do not be fooled by
big profit screenshots. I know you all want to
make $20,000 in a day, $50,000 in a day. That’s fantastic, trust me, I’ve done it. I’ve made $200,000 in a day. It’s a fantastic feeling. But when you’re first beginning, when you’re first starting,
when you’re learning, it does you no good. If you do make that much money and you’re using leverage and you’re using the wrong strategy,
you’ll probably lose it. It’s true. Everyone wants success,
but if you get success the wrong way, it’s actually
harmful in the long run. Excuse me. That’s why I say, think
about what can you do this week, this month, this year to be successful five years from now? It would be great if you grow your account and you grow your knowledge over the next few years, and
then five years from now, you do make $20,000 in a day. Because you have the experience to do so, and you can handle it, and you can do it in a low risk kind of way. Round of applause if that makes sense. (crowd applauding) (upbeat music) Hey, Tim 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.

21 Replies to “The Biggest Risk in Penny Stocks for 2020”

  1. Crawl before you walk! Tim because of you i am feeling great these days on how bright the future can and will be thx a million!

  2. I want to get into the stock market, specifically penny stocks, but where do I go to see the stock charts. I want to see the stock charts that you and your students see. I have been searching but to no avail. I want to study but I can't find the charts to study.

  3. Thanks Tim..am learning this term "Cut your losses" please help me ..what do you mean when you say this?? It confuses me..and am not sure what it means..thank you again.

  4. “Don’t let yourself get attached to anything you are not willing to walk out on in 30 seconds flat if you feel the heat around the corner.” – Heat, 1995

  5. As much info as I’ve gathered here and there on stocks since I got out the service in ‘17, last week I started the Stocks educational course on TD Ameritrade…wow I’m glad I did. I’ve watched several videos on Capm/Wacc/DCF though because that’s my weakest area of the fundamental analysis process. It’s something that’ll take awhile before it clicks in my head no matter how much I rewatch it. Maybe it’s because I absorbed so much information in short time. Any recommendations for better understanding of those criteria?

  6. Stay safe= cut lost quick, and pick right strategy for small acc, for me i have to able to draw trend line before i can get in, and the dip buy work perfect for my small account. This week, i got 8 dip buy, and all win. i dont know about next week, but right now, my win rate is 100% on dip buy. 🙂 and i dont forget to trade scare. :). Thank for the free education Tim. The break out and over night holding 1st strong green day are not work for me. i dont know why. But i will try max out dip buy now.

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