One of the best known penny stock advocates is Timothy Sykes who actually attempts to short the stock that are being ramped in order to profit when they come plunging back to earth.

Forbidden

Problem is most discussion has been around a few traders who were caught short and succinctly blew their accounts up. Then strangely enough I receive an email from a reader wanting to know if I could test a similar strategy based on this blog post , which appears to be a loose version of the Sykes strategy of selling these ramped-up stocks.

We will not use any compounding of capital, i. You may be thinking that everything looks very positive with this so far.

Financial Trading with Tight, Fixed Spreads | Core Spreads

This plots each completed trade. The equity growth chart above is actually misleading.

Making your fortune on penny stocks - ijiyyyiqic.web.fc2.com

By removing this anomaly we actually get a much more accurate insight into the downside that this strategy offers. The following chart of Mirabela Nickel MBN shows how a trade can go bad.

Let me recite a remark from earlier in this article,. If there is one useful lesson that can be learned from this exercise is that stocks that go parabolic do have a high propensity to reverse course very quickly.

Penny stocks and the ASX : AusFinance

If you find yourself on the right side of the trade, i. Members Log In Close X Username.

Shares Stocks Technical Analysis Long Term Trading. Books e-Books Turnkey Trading Systems Amibroker Programming.

November 30, Parent Category: Not bad if you had it. For academic purposes I can certainly take a look.