Description

My basic trading philosophy can be summed up by one simple quote:

"Trade the ticker, not the company" - Nate Michaud


Monday, February 10, 2014

Question: "How do you determine who the best stock promoters are?"

So what makes a good promoter? Many people would respond that it's a promoter who can make a stock price increase dramatically when they announce it as their "pick." There is some truth to this. However, there is one angle that I frequently see new traders overlook. When it comes to trading pumps, or any stock for that matter, VOLUME is key. You could have a stock go up 100%+, but this would do you absolutely no good if the stock isn't trading volume. Let's use a promotion from Friday as an example, USNU:


On paper, USNU looks great. The previous day it closed at $0.104, and Friday it hit a high of $0.343. Many people will look at this and say, "Wow, a gain of over 200%!" In fact, the promoter will even claim this pick as a "win" based off of those facts alone. Here's what people fail to notice. When USNU was announced, it traded under $0.30 for only two minutes. During these two minutes, it only traded about 10,000 shares below $0.20 and only 24,000 shares below $0.30! The opportunity to make that 200%+ didn't really exist. It would have been nearly impossible to get an execution on this stock at the ground floor, because hardly any shares at all were traded! Some people would try the "get in at any cost approach" and be the unfortunate buyers that purchased this stock above $0.30 (not coincidentally where most of the volume occurred). Ask yourself, if you were one of these buyers, would you still be long the stock an hour later when it had dipped to $0.17? Liquidity and volume is KEY to trading; without that, a high-odds play doesn't exist. Don't let yourself be one of the suckers who sees the 200%+ claim and decides that the promoter is worth following. Make sure the volume is real and the result is actually realistic.

Let's compare USNU to a promotion that actually did trade volume, just as a reference point. Just this weekend, stocktips.com released WPWR as their new pick. Compare Day 1 of this promotion to USNU:


Unlike our previous example, WPWR traded real volume. About 800,000 shares traded below $0.22, and even more shares traded pre-market, well below $0.20. Would fills have still been difficult with this stock? Absolutely. It's tough to buy any OTC stock into strength, which is why it's important to have the right brokers. However, in this case the possibility for profits existed because there was plenty of volume.

Sure, it looks easy enough in hindsight, but how do you know in the moment which promotion is going to trade good volume and have high odds of spiking? This is where knowing promoter history comes in so handy. Let's look at recent "Stock Tips" promotions, starting with the oldest:




As you can see, "Stock Tips" has been consistently improving with each promotion they've run. The volume has steadily increased with each promotion (trading millions of shares throughout is plenty), and each promotion has run for multiple days. Given these facts, it was very likely that their new pick this morning would trade high volume and have a strong open. By saving emails from "Stock Tips," you could look back at previous picks and draw this conclusion for yourself or create a document to track the performance of their picks so you have that to refer to. Either way, it is important to have a way to check a promoter's history so that you can make better decisions.

One important thing to note is that past performance in no way guarantees future results. Use past performance to help guide your decisions, but don't make the mistake of thinking anything is guaranteed. You must still pay careful attention to the price action and be willing to sell if the promotion starts to fail. A "hold and hope" strategy will only work for so long. Once you run into your first "money-grab" promotion, you will get destroyed if you're unwilling to adapt. What is a "money-grab?" An old promoter known as "Awesome Penny Stocks" had a reputation for huge volume and multi-day runs. They were considered the best promoter out there. Let me show you a daily chart of one of their "money-grab" promotions:


Point made? At the end of the day, you're buying a scam. Never forget that and trade scared, because one day that attitude will save you.

With all that in mind, below I will share a portion of my promoters list so that you can see how I organize it. Who the "Hot" stock promoters are changes pretty frequently, and these days there aren't very many quality promoters left, due to larger awareness of scams and increased SEC halts. I do not endorse these promoters and am in no way affiliated with them, but I do believe they are still worth following. Remember, buying stock promotions is a VERY risky strategy and should not be attempted until you have a good degree of familiarity:

11/3/14 EDIT: LOL a few short months later, ALL of the promoters I had listed no longer exist! Currently stocktips.com is the only promoter left who has proven they can produce volatile picks that have good volume.



Hope this helps. Please send any questions my way!

38 comments:

  1. So wouldnt it be decent to short pumps with low shares that were traded? Theyll go down during the week....

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    1. You're exactly right! I definitely have shorted these lower quality promotions in the past. I was planning to get a bit more into that down the road, but good catch!

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  2. Hey Tim,
    Just wanted to thank you for adding to this blog everyday! I've learned so much useful information, since stumbling across your articles last week. I'm super excited to start trading in a few months, and hope to replicate your financial success!
    Best of luck in the future! - Liam

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  3. "Don't play the company play the chart..." So how much SEC research are you doing - or are you purely just playing the charts / the pumps? I've been calling all my trades but I feel like I'm scalping a bit because I'm not very familiar with how stocks bounce around all day so it's hard for me to hold. All of my calls but one have been technical break outs and I've been profitable (expect for one software issue)... but since I'm ready to get out at a seconds notice I'm not reaping the rewards of many of the b/o ... but in some circumstances I saved myself by taking profits. How do you really judge if a b/o is going to keep going? -- would it have to do with b/o that are going across days or weeks or months/years that you would feel comfortable holding (also taking level 2 into account)? - Great site T.G

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  4. I don't do any SEC research, that stuff doesn't matter to me at all. I'm purely playing charts.

    As far as judging breakouts goes, I really just go completely off of price action. You can use my post on technical indicators as an example, once we get that breakout I give it a chance to work but if a key support level snaps I'll get out and cut my loss. Or, if you take it a step further, say I decide to swing the stock. The following day I probably start by risking off of g/r and then again as the chart develops my mental stop loss will probably move as well depending on new support levels that set up

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  5. Hey Tim, what do you mean by "risking off of g/r and then again as the chart develops"? - I Googled it but couldn't find an answer. Is that a term mentioned in Nates DVD? Thanks.

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    1. g/r means green to red. Or in other words, the stock going from up on the day to down on the day

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  6. Ah ok thanks! Had me confused for a second there

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  7. How do you determine which pumper group stands behind all these websites?

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    1. They'll send out word-for-word the same emails. Or, if you track them for a while, you'll notice they only pick the same stocks as each other

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    2. I noticed that. The websites are also almost identical. I just wondered why did you named some pumper group "Brighton" for example. Because I couldn't find neither of these pumper groups' names on the internet.

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  8. Could you give us your full organized list of stock promoters please.

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    1. It's a bit outdated right now... perhaps once I have the time to go through it and get it up to date I'll share the whole thing

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    2. Brighton was one of their old websites they've since replaced, I just haven't bothered changing the name

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    3. Thanks. Also, how have you changed your strategy since the promoters have been less active than they have for past couple of years? Have you been looking at more non-promo stocks?

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    4. My strategy has shifted more towards trading any OTC with high volume and not caring about whether it's a blatant pump or not. The chart patterns usually work the same either way

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  9. Could you post an example of what an actual pump email looks like? How often do they occur these days?Thank you.

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    1. You can follow this link to see an example: http://www.investorsreports.com/update.php

      There are still multiple promotions per week, although many are low quality and fail to create price movement

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  10. Tim then how do you find which stock to invest in if you do not follow the promoters

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    1. If I'm not trading off of promotion emails, I'm using scanners to find my stocks. I have a few posts on this you could review

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  11. What is the link to the post for scanners. And what would be a reliable scanner to use?

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    1. Donald, please take the time to read my posts

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  12. Thanks for that great post.

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  13. Thanks for all the great info Tim, your blog really helps. You mentioned a few posts back that your trading has shifted to trading high volume OTC's and not only pumps. Besides high volume, is there anything that you look for? Any other special techniques?

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    1. That's really about it! I just follow the volume and liquidity and take advantage of it!

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  14. It seems like most of the Brighton promotion websites are no longer available. the only one that I could get to work was http://aaaresearchreport.com/ and i can't subscribe to them, only view there latest pick which was RIHT and already pumped 10 days ago for 500k. I don't think it will b/o again because the promo is over. The best promo list i've used is pennystocks.com and they only have picks every couple of months but when they do it's always a couple weeks to a couple month long promo which makes it easier to profit rather than only seeing a 100-? % increase from 9:30am-10am if it even last that long. I found sven,goff,xuii,swvi,ustu and many more with them over the last couple of years but i only played them with virtual money. i hope pennystocks.com sends out a new alert soon because all of there other alerts I've just been watching and playing in stock market games. i wanna actually use my real money now. if you have any suggestions on new promoters that are worth while following post a new blog or reply to this with some links. i know there's gotta be a few left still that are decent to buy

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  15. given this quote from your blog: "these days there aren't very many quality promoters left, due to larger awareness of scams and increased SEC halts" is this still a viable strategy and if so how much longer to you expect it to remain viable??

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  17. Hi Tim. Very good article indeed. I`ve been noticing the volume thing meself. Based on highest Volume they are able to generate... What would you say are the top 5 Promoters (besides Stock Tips) volumewise?

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  21. Hey Tim, I'm new to trading so this blog has provided me with a lot of great information. Thanks for taking the time to post everything that you have and for helping the newbies like myself! I've created another email and have signed up to many websites in order to hopefully start tracking promotors and their promotions (I'm not sure if I will ever try to trade any promotions, but none the less I like the idea of tracking promotions for future reference purposes). Anyways, my question is this: Do you have a spreadsheet or tool that you use to help track the details of all of these promotions? Or is there a method that you use other than referring back to saved emails? An example of how you do this would be amazing! Thanks for any help!

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  23. A debt of gratitude is in order for all the colossal information Tim, your web journal truly makes a difference. You said a couple posts back that you're exchanging has moved to exchanging high volume OTC's and not just pumps. Other than high volume, is there anything that you search for? Whatever other uncommon procedures?
    Valuation partners

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