Today's topic at hand will be my favorite predictable play. Paid Promotions. In my opinion, paid promotions are the real Gem due too their predictability. Knowing the outcome is half the battle, you never want to underestimate stock promoters. Unfortunately, promotions are not as strong as they use to be in the past, but that does not mean you can't prepare yourself. Paid promotions still exist, and below I will explain my opinions about how to maximize your odds of success. For additional study material, I will post links to recommended videos from Timothy Sykes along with an educational DVD about the 7 key indicators of the lifespan of Paid Promotions I hope you enjoy!
Before I Begin: I am sure by now you have seen the film " The Wolf of Wall Street " or perhaps " Boiler Room." These two films always come into the conversation when I try to explain other's about my niche. The one that stands out the most it that "Penny-Stocks are a scam, and you have no odds." There is one keyword that I always respond with "Odds." I further explain this a moment, but films such as above depict Paid Promotions NOT the overall niche. Don't get me wrong I love the two films, but they give Penny-Stocks a bad reputation. On the flip side, the films do a great job in showing the harsh drug addictions Promoters have, I'll give em that.
What is a paid promotion: Now paid promotions solely exit to enrich insiders along with whoever is apart of the manipulation. Pretty simple, but commonsense is often NOT common practice. Promoters along with insiders buy thousand upon thousands of shares at a discount price before the manipulation begins. As the promoters are pumping, they are selling into the artificially stock price. Then comes the Dump where it is game over. Is a tsunami of sellers, because the promoters are done with their job, along with Insiders selling. So you have three drawdowns, one the promoters, two the insiders, and lastly short sellers. There are a key few signs that can warn you when the end of a paid promotion is soon too end which I explain in a moment. Firstly the big question comes to sthe urface, Is this Legal ? Yes and No. This is a common question that comes forth. Both are correct,b ut how can that be ? Well ,you see the paid promotion along with the artificially stock manipulation is illegal ,but there is one key element to their scheme. DISCLAIMERS ! Yes, Promoters live by disclaimers. Reading disclaimers gives me quite the laugh. Unfortunately ,the majority of people don't due their diligence which is a major mistake. In the disclaimer, you will find the essential information about compensation, duration, ticker, and other info about the pump.
How does a Paid Promotion End: Now remember how I was mentioned earlier Odds. As I have explained in the previous post, in this game you play by the Odds and Probabilities. In my opinion, paid promotions are the highest odd set-up in the entire Stock market. Yes, I said it. There is not other strategy in this game that you can predict. None...Nowhere. For example, you don't know where $FB or $AAPL will be in 1 or 5 years, but with stock like $FPTA, you know the ENDGAME. You know that these end in the gutter, it is NOT a question of IF but a question of WHEN, and if you will be able to profit from it. As I said knowing the end is half the battle, you must prepare yourself for any possible outcome. Below I will list the key signs that can indicate when a promotion might be on it's last leg.
1) First Red Day: Timothy Sykes has strongly emphasized that the first red day is a huge momentum shift. Its a trend change. Although it is NOT an exact science meaning that the first red day does not workout, but most of the time the ODDS favor you. Below I will show an example, but for I strongly recommend reading the blog post above.
2) Fading Volume / Increased Volume : When it comes to Pumps volume is key. At the first stages of a pump ideally, the volume is heavy simply due to shares begin bought by insiders / promoters. Ideally, once you see the Volume pick up along with the price action going parabolic, the end is likely near. Increased volume along with a parabolic move typically means the promoters are pushing the price up once more. It's like it's the last ride up the hill, until somebody pushes you down. Once again it is NOT an exact science every stock will act different. Lastly, fading volume is another key sign that can indicate you.
3) Mailers have ceased: Promoters send out mailers to their email list too intrigue naive investors. Ideally, the promoters send out mailers everyday, if not twice a day. Once you see that the mailers have ceased that's a clear trend change. They are no longer holding the stock up. Understand that each mailer cost a dollar amount, meaning that once they end it's NOT in their interest to promote the stock.
$FPTA was the most recent paid promotion this past October 2018. I signed up to multiple mailer list, and this one in particular the strongest. Overall the paid promotion lasted for nearly a month until the mailers stopped being sent. It was a great learning tool. After the Dump, I did not receive a mailer from PSRG until 4 days ago. They have a new pick, which I am long. Small size. But I got in once the mailer was sent out. This mailer seems to be under the radar. No one is mentioning the new pick in chat-rooms or on message boards. I have zero expectations of how it will play out. But I will update you next week to see how it plays out.$PTCO.
Update: School has been going well. First week was a blast, I look forward to a great week ahead. One more week closer to the mountain. Trading wise every single day is a learning experience, I understand that I don't have to trade. I will only focus on my personality Trades.