Just starting

So I used to day trade back in college, when internet speeds were still measured in kb. Recently I decided to get back into it and to document for posterity how it goes right from the begining. I will be posting all my moments of brilliance, idiocy, and everywhere in between. What interested me to start with was pennystocks. I don't have a huge bankroll, starting with a couple of thousand dollars, so pennystocks makes sense. I used to focus on stocks that seemed to have regular volatility but fell within a high/low band (bollinger band I have since learned) and this made making small but consistent profits rather easy. I never got rich off of this but it did help me pay my way through engineering school. Then my first job, marriage, and several wonderful children came and I didnt seem to have time or the resources to play the market anymore.

Recently I decided to make it a priority and started up again. I opened an account with Schwab (I will write about my experience with them on some other post as it relates to pennystocks) and have had money in since the begining of the year. My account is up about 25% YTD, but that is nothing special as the market has rebounded quite well.

After being in the market with some "safe" stocks since the begining of the year I decided I wanted to try something similar to what I had done back in college. You may have heard of "pump and dumps" basically it is a company that is essentially crap that is traded OTC and pays an ad agency to create hype around the company and thus the stock, this drives the stock up tremendously in the short term and then invariably it comes crashing down, both of which create opportunities to cash in. I started looking into it and found two places that seemed to be interesting, www.timalerts.com and www.reapertrades.com, both seem to be straight up advice on penny stocks and in particular on pump and dumps. Timothy Sykes owns timalerts.com and he made a boatload of money playing this game and shorting the stocks, then he blew most of his money, however he is on the way back up again, you can watch him on covestor also.

After doing to some digging I decided to give timalerts a try at just under $50 a month. This gives me access to the site which has a chat room dedicated to these kinds of trades and also gets me all of the trade alerts. Reapertrades has some great input and is free (for now).

I started out my first trade breaking an old rule, don't let emotion get in the way so I sunk some money into SNPY (it really doesnt matter what the company does) on some hype and wound up dumping 25% of the value in about 3 hours. I was eager to get back into and didnt wait or do the proper research (even trades on crappy companies need to be researched). Bad Trade #1

So the next day I decided to do it right, I looked at all the information coming from timalerts and reapertrades and both highlighted a company GSAE which seemed primed to take off, they had issued news prior to opening and while it seemed like great news it really amounted to BS, however I kept an eye on it and decided to buy after doing a little more digging. I bought in at 0.93 and sold about 2 hours later at $1.35 for an easy 45% profit after my schwab commissions. Good Trade #1

Next day I was feeling pretty good and decided to try something new (bad idea seeing as how the whole thing was brand new) and sunk some money into a real penny stock and wound up dropping about 20% again. Bad Trade #2 Total Return since inception of pennystock account: -5%.

So I have not been able to give a real assessment yet of timalerts or reapertrades other than that the one pick that I made money on came from their watchlist, while the other two did not. Thus from here on out I am going to try and stick with them even if there is a "sure thing".

The one thing I will say is that both of the brokerages that they use (thinkorswim or IB) seem to be much more conducive to the type of trading that they make most of their money on, that is shorting OTC stocks. Schwab (or most of the other big brokers) dont really allow much flexibility with shorting OTC stocks. So I may try to shift some money into thinkorswim since IB requires a minimum start of $10k.

So this ends my first post. As time goes on hopefully I will learn something (and ideally make some money) and anyone who happens to read along might learn something or at least find it amusing.