The Story Of A Guy Who Got Curious About Stock Trading
How It All Starts
Veteran traders know how this story plays out — Its TEXTBOOK! First you become curious about stocks. You read all about it and then think you have it all figured out. At this point you sure have heard about penny stocks and amazing runs — WOW from $1 to $25 in less than a WEEK??? — HOLLY SHIT, Thats BANANAS!!!
And So It Begins …
He was warned about ‘Pump’n Dumps’ but he only got $1000 to trade with! He’s suppose to put that in $AAPL and then what? wait? — YEA RIGHT.
And yea, he took the advice of every article and first started paper trading. Opened up a dummy account and started buying some safe-heaven stocks with his $250,000 buying power. And he felt the POWER. His trades were going up and up and away. With a $100,000 ‘investment’, 1% is a cool $1000 profit. he did that a couple of times in a bull market and before he knew it, his confidence was through the roof.
He stopped playing games, because he wanted to play with the big boys.
… With Penny Stocks Apparently
As textbook as this is, he discovers penny stocks, with all its glamour. He reads stories about how a trader turned $1500 to $1 million in 3 years trading penny stocks. People like Tim Sykes bragging about how they short the dump and make big money.
So of course he goes to trade penny stocks with the few thousand bucks he pulled together. He checks out the forums and discovers this amazing sponge company thats WAY too undervalued and on the verge of exploding.
SpongeTech
Everyone on the forums is saying this is the next 10 BAGGER trade, the company is legit and its all over the stores. He checks out the Youtube videos, the company website, Investors Hub, and he just knows, this thing is going to FLYYYYY. So he drinks the Cool-aid and buys in.
He Will NEVER Forget His Heartbeat At That Moment
Its his first REAL trade! So he buys in with around $1500 at $0.03 but for a while nothing happens. Then it starts to move, and his heart starts racing — Thump…Thump — By that time he managed to load his account with some more cash so now he got even more buying power. So he adds to his position. He averages to $0.046 and the stock is at $0.05-ish. He’s still nervous but its green so its all good. Then it starts to move some more, so he adds even more to your position. At some point he averaged down to 0.058 with around $5000 in that trade.
The Famous Pump’N Dump Run
Oh Boy, Did You Get Lucky Or What?
So you waited and waited and BOOM — IT HAPPENED! It’s hard to see but on March 17, 2009 $SPNG was trading at .0006 and on June 12, 2009 it hits a high of .285 Had you invested just $1000 and rode the whole wave, you would be out with with $475,000. But we all know he couldn’t have timed it that good. First, by the time he heard of it through the boards, it was already around $0.04. The people that caught in double zero territory are the promoters of that stock.
Nevertheless, he listened to veterans who told him: you can never buy at the lowest and sell at the highest points — You want to SCALE. And thats what he did. He averaged in and as it was running, he averaged out. He didn’t catch the top but his last trade was around $0.25. All in all he took $5000 and turned them into $20,000 — WOHOOO!
Fast Forward A Few Years
It turns out it was all a SCAM. He looks back and he can’t help it but LOL. He got out on time.
Pump’N Dumps Are No Laughing Matter
Ok you have to admit, that’s a little funny. Pump’N Dumps are an unfortunate part of trading penny stocks. There are those that profit from it at the expense of the many amateur traders. While there are others savvy enough to go against the herd and short the dump.
Turns Out That Guy Was Me
I was fortunate enough to get away with this and to ride an amazing wave on my very first trade. I got into stock trading following the blood bath during the recession. I instantly became obsessed with it and so I collected every cent I had to start trading.
It’s Forever Changed Me
SpongeTech was my first trade and since its never been the same. I got to taste making money with a few clicks, the rush you get when you make a trade and you see money roll-in like magic. This is the sensation a lot of novice traders look for, yet seasoned traders know how to control this emotional rush.
Watch Out For Those Pump’N Dumps
What Do You Think?
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About me
I like to describe myself as a technologically savvy person whos able to leverage experience and a broad background to excel in a variety of roles. Although I have an engineering degree, I have been drawn to various other areas through sheer curiosity, and have developed a strong passion in them. I have dabbled around in the stock market, and currently work on making awesome apps. And I enjoy amongst many things technology especially the FinTech space, traveling, some good fitness.
