How To Short Sell Penny Stocks
A lot of people ask me how do you short sell a stock? Subscribe here to get INSTANT alerts when I post a new video outlining my penny stock trading techniques: https://goo.gl/poGZTm
Short selling is basically how I made my second million not my first million. I made my first million going long. Meaning I was betting on higher prices I was buying penny stocks that broke out.
Short selling means you’re betting on lower stock prices. You’re taking a negative position. So if you’re betting against a stock let’s say six dollars a share and it goes down, and you’re short, and it goes down to two dollars a share.
You profit those four dollars as share six minus two equals four. Even though the price is dropping. Let’s say you have a negative 1000 shares, so you’ve shorted 1000 shares negative 1000 shares times negative four dollars a share. Negative times a negative is positive.
Brokers want more commissions. Company insiders want their stocks as high as possible. So they’re going to put out, you know, excited press releases. Analysts are going to give inflated price targets. Everyone’s going to say everything’s going well. And it might just not.
Shorting is a very dangerous game. You have to be very careful because a stock can just keep going higher. Even if it’s an outright scam. The company an just putting out press release after press release pushing their stock higher. That’s called a short squeeze, and so many people are betting on a stock going lower.
Guess what if it goes higher, you lose money. As a short seller because you’re betting on one direction, it’s going the other direction. No different than if you’re buying a stock and you want it to go higher, and it goes lower. You lose money. The difference with short selling is that you can lose infinite amounts of money.
So be very, very careful. Even if I’m shorting a scam, I follow rule number one, cut losses quickly. I don’t let myself lose all my money. I don’t let myself lose 90 times my money. I don’t let myself even lose 10% of my money.
Remember that 90% of traders lose money. And no matter how sure you are that a company is a scam and even if eventually, it goes to zero it can go up indefinitely. Enron is a good example.
The terrible company eventually went bankrupt. But, it was the best stock in the world for several years before it’s bankruptcy. So, never underestimate hype. Never underestimate the cheerleading that goes on in Wall Street.
Thank you for watching my videos. I hope that they help you. I want to share everything that I’ve learned over the years. You can check out more videos right over there and also click subscribe. So that you can watch all of these videos. Get that knowledge and become my next millionaire student.
* Results may not be typical and may vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here: https://www.timothysykes.com/terms-of-service/