Timothy Sykes is a well-known authority on penny stock trading. He runs a group of very successful companies and subscription services related to trading small cap and micro stocks. The world of penny stocks is very different from the well-known stocks most traders focus on. While there are thousands of low-priced stocks, at any one time only a small number are worth considering, and liquid enough to trade.
On the other hand, when penny stocks move, they move fast, and large gains can be made in a matter of days or even hours. Trading penny stocks requires specific skills and knowledge, something Tim Sykes has developed and shared over the last 20 years. This Timothy Sykes review will give you an overview of the ins and outs of penny stock trading as well as the service he offers.
- Who is Timothy Sykes?
- What are penny stocks?
- Understanding the penny stock market
- Beware of penny stock scams and pump and dump schemes
- What is Timothy Sykes’ trading strategy?
- How successful is Timothy Sykes?
- Is Timothy Sykes legit or scam?
- How can you learn penny stock trading from Timothy Sykes?
- What type of trader is Timothy Sykes’ service best for?
- Risks of penny stock trading
Who is Timothy Sykes?
We will start this Timothy Sykes review with a brief biography of the man. Sykes began trading while in high school and college. He turned his Bar Mitzvah money of $12,000 into $2 million while he was still a student at Tulane University. He also started a hedge fund during this period, though he struggled to attract assets due to his young age and unconventional trading style. Sykes then developed a reputation by being ranked #1 out of 60,000 traders on the Covestor platform (the Covestor platform has been acquired by Interactive Brokers in the meanwhile).
In 2006 he was featured on the first season of Wall Street Warriors. He used the publicity to build a business coaching people who wanted to become traders. Sykes is passionate about trading education and helping traders learn the skills that have helped him make millions of dollars.
Sykes has founded a number of companies related to trading and trader education. Profit.ly is a website that allows traders to record their trading ideas, share ideas and learn from trading gurus and from one another. He also started Investimonials.com, which collates user reviews of stock market related books, videos and other services. Tim Sykes other services include an alerts service, a chatroom and video tutorials. More recently he created the Millionaire Challenge program, challenging people to become millionaire traders with his help.
Besides being an accomplished trader, Sykes is obviously very good at marketing and generating publicity. He sells his services by selling the lifestyle that comes with being a successful trader. If you are considering trading penny stocks, it’s important that you understand the market and whether it is really right for you. In the next part of this Timothy Sykes review, we will look at penny stock trading in a little more detail.
What are penny stocks?
Penny stock companies have a stock price below $5. Historically, stocks under $1 were classified as penny stocks, but over time the definition has widened to include stocks trading up to $5. Penny stocks include cheap stocks listed on major exchanges as well as OTC or pink sheet stocks. These stocks used to be listed in a publication printed on pink paper, hence the name. Thanks to the internet, OTC stocks can now be traded on a number of platforms, like OTC Markets Group, which facilitate trading in unlisted shares.
Stocks listed on pink sheets are not subject to the same levels of scrutiny as those on major exchanges. They are often companies that fail to qualify to list on other exchanges, or that have been delisted. OTC stocks therefore carry far more risk than listed stocks, though this can also create trading and investment opportunities.
Understanding the penny stock market
Penny stocks are very different from blue chip stocks, and before trading them it’s vital that you understand the characteristics of the penny stock market. The majority of companies with low priced stocks are not profitable or have uncertain revenue streams. Sometimes their revenue comes from just a few large customers. Losing just one customer can be the difference between being profitable or losing money.
Because the profitability and revenue streams of penny stock companies often are uncertain, their stock prices are often very volatile. Penny stocks under 10 cents are even more volatile, as the minimum amount they can move is 10%. If a stock moves from 10 cents to 11 cents, that’s a 10% gain. If a stock moves from 2 cents to 1 cent, that’s a 50% decline. Not all penny stocks are illiquid, and at any time there will be a limited number of high-volume penny stocks. Most will see little trade from one day to the next.
An entire industry exists around these stocks. Specialist penny stock brokers focus on the sector, and hundreds of newsletter services tout the latest hot penny stock every day. Some of these services are perfectly legitimate, some are questionable, and some are outright scams. For this reason, traders need to do their homework before following the penny stock picks promoted by any of these services.
Beware of penny stock scams and pump and dump schemes
The market is full of penny stock scams, which come in various forms. Pump and dump schemes, which come in several forms, are big feature of the penny stock market. The lack of liquidity makes it relatively easy for groups of traders to work together to manipulate stock prices.
Some pump and dumps are operated by boiler rooms staffed by aggressive sales people. If you have seen The Wolf of Wall Street, you will know what they are all about. These boiler rooms will often buy up inventory of penny stocks, then sell them to clients at progressively higher prices. Once the buying, which they have promoted, dries up the stock price usually collapses.
Other schemes are run by groups of independent traders who buy stocks while simultaneously spreading rumours about the companies. Unsuspecting investors are lured into the market by the rumours and rising prices. They soon find they are buying stocks from the traders who started the rumours in the first place. For these reasons, penny stock trading is one of the more difficult types of stock trading. Newer traders need to understand how to trade penny stocks, before they make their first trade.
What is Timothy Sykes’ trading strategy?
Next up in this Timothy Sykes review, we will cover his trading strategy. When he started out, Sykes’ bread and butter strategy was identifying stocks that were heavily promoted. He then shorted them when the promotion and buying stopped. He knew the stocks were overvalued, and that once the promoters had sold their own stock there was no reason for the stock to stay at elevated levels.
More recently he has focussed on long trades, finding the best penny stocks to buy by reading about the companies and following the price charts. Tim Sykes will look for any information that can move a stock price. This can include earnings releases, potential corporate action, new product releases or large new investors. He uses this information to spot the stocks he wants to watch, and then he uses charts to guide his trading. He stresses the importance of learning a variety of setups to trade, and constantly adding new setups to your arsenal.
How successful is Timothy Sykes?
Timothy Sykes’ net worth was reported to be over $20 million by Forbes. In addition, his track record on Profit.ly has his total gains at $4.8 million as of mid-2018. Judging by the size of his business, it would appear he now makes more from his various businesses than from trading, but his track record from trading is impressive nonetheless. He also has several millionaire students who have made a lot of money following his alerts and trading strategies. In the next part of this Timothy Sykes review, we will look at the legitimacy of his business.
Is Timothy Sykes legit or scam?
Like any review, a Timothy Sykes review needs to address the question of whether he and his service are legit or a scam. Lots of people have signed up for Sykes’ trading courses, and while not all have become millionaires, his reputation is generally good. An online search reveals only a few disappointed subscribers.
In addition, his trades are recorded in real time on Profit.ly and were previously recorded on Covestor. There are of course no guarantees that students will make money following his alerts and trading courses. However, it seems safe to say that his product offering is not a scam.
How can you learn penny stock trading from Timothy Sykes?
Timothy Sykes reviews hundreds of penny stocks and selects those with the best chance of moving – higher or lower. Besides the Profit.ly site he runs a chat room and alert service. The basic service, Tim’s Alerts, costs $74.95 a month. This gives users access to the chatroom run by Tim and a team of moderators. In addition, users can view a watchlist with the 5 to 10 stocks Sykes is watching at any given time. Subscribers also receive real time alerts via SMS or email.
Pennystocking Silver is the more comprehensive plan which costs $149.95 a month. This includes access to Tim Sykes’ watchlist, the chatroom and alerts, as well as a library of over 4,400 videos. Tim’s Challenge is the millionaire program Tim offers. It costs $4,000 a year and an interview is required before enrolment. This program allows students to interact directly with Sykes and some of his most successful students. In addition, a number of DVD courses can be purchased on the Profit.ly website.
What type of trader is Timothy Sykes’ service best for?
This service to learn penny stock trading is best suited to someone with at least some experience in the market. It’s also suited to those with the flexibility to check the market on and off throughout the day and respond to email or SMS alerts. Unlike day traders, penny stock traders don’t need to be glued to their screens all day, but they do need to be able to react when a price begins to move, or when news is released.
Sykes’ approach is very much a trading approach, rather than an investing strategy. If you want to invest in penny stocks, then you need to know that it’s something very different. While penny stocks can move a lot in the short term based on all sorts of factors, the long-term performance will depend on whether the company actually makes profits. Tim Sykes does stress that unless you put in the work, you will not succeed. His products are therefore not appropriate unless you are prepared to commit and work hard.
Trading penny stocks will require you to look at hundreds of stocks in a given year. With larger stocks, traders often get to know a handful of stocks and follow the same stocks from month to month. If you are going to trade penny stocks you will need to be prepared to read up on new stocks all the time and know when to move on stop following stocks when they no longer offer opportunity.
Risks of penny stock trading
A Timothy Sykes review would not be complete without covering some of the risks associated with penny stocks trading. Successful penny stock trading is a little different from other types of trading which are more systematic and measurable. Trading penny stocks and OTC stocks requires understanding of the nuances of the market.
Trading cannot be automated using a penny stock trading platform or penny stock trading software like it can with more liquid stocks. Rather, experience, skills, knowledge and maybe even the right instincts are required. Day trading penny stocks can be very lucrative for those who know what they are doing, but very risky for those that don’t. The same applies to swing trading penny stocks. You should definitely do your home-work before trading penny stocks.
Timothy Sykes Review: Conclusion
That concludes this Timothy Sykes review, and hopefully you now know a little more about what his service offers, and a little more about penny stock trading. There is big money to be made trading penny stocks due to their volatility and the amount they can move in a short period of time. Tim Sykes’ subscription services are a good place to start if you are prepared to put in the work.
How did you like this Timothy Sykes review? Are you an active penny stock trader or have you even subscribed to Timothy Sykes’ services on Profit.ly? Do you have a particular strategy trading penny stocks? Please share your thoughts and feedback in the comments below. If you have any questions, please let us know as well.