Pump and Dump

 
Min 2:50 ------- November, historically, is a month where the market sees the most amount of stocks running / spiking/ runners | that's when hedge funds pump up these small cap stocks | zombie month -------- www.youtube.com/watch?v=3Si9tf_6yzs .......... #season #months #november #smallCaps
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Penny stocks are in business to sell stock. Most don't have a real product. So they make money by pumping our press releases ... And when the stock price goes up on ‘good’ news, they dilute or do toxic financing. That usually kills the stock's momentum, sends it off a cliff, and burns anyone who holds shares because they believed the news. So the stock is hot while it’s running on news and traders experience euphoria. But when the party’s over, the stock is cold and dead... The life cycle of a chat pumper is similar… Chat pumpers buy up shares of a stock, then alert their followers and sell into them. So when the chat pumper has a lot of sheep that buy on their alerts, stocks can have huge runs. But after the pumpers murder all their sheep, their alerts go cold... So you’ll notice that there are periods when chat pumps are hot and can move stocks. Other times, the alerts mean nothing... So before you jump in a premarket runner, ask yourself if the pattern your trading has been working. Or if the stock has news, has it been a good catalyst in the current market? Is the stock you’re trading part of a hot market theme? -Bohen #promoters #pumpanddumps #pumps #dilution #toxicFinancings #financings #offerings #fundamentals
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~~~~~~I don't sign up for any of the promoter emails anymore... If you're in the TimAlerts chatroom, you don't have to sign up for any newsletters if you don't want to... you can just piggy back great traders.. ask Michael Goode and Tim Grittani in the profit.ly chat, who are on top of every single pump, and are so kind and so giving, ask them if there's any great pump right now in a private message...
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METHOD TO THE MADNESS----The reason why penny stocks go up is due to a promotional mailer.........it doesn't matter what the product is......the way they go about it is the same exact process as every other pump (although, there's different press releases).........it's artificial....promoters are trying to make you believe it's trying to go higher...once the stock starts to go side-ways the volume starts to diminish and the stock will drop.........
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Promoters do not always pump properly. you cannot trust promoters. Just because there's a marketing budget of millions of dollars does not mean the stock is always going to go up.
The 
The promoters can easily dump a stock price.. they've done it to me. -Tim Sykes
 
STRATEGY----  the reason why i bought it, was because somebody paid $3Million dollars to pump up this stock. It spiked from $3 to $10... This stock which has no revenues, no cash, one employee, the employee is based out of a office rental. you as a trader have to buy this (technical) break out, when millions are being spent on pumping up a stock. Then in 2 hours, it went down from $10 to $2...
STRATEGY---- PUMP AND DUMP logic: when insiders try and pump these stocks up is because when u award yourself millions of shares, they're restricted. "restricted" is now 6 months... so as an insider, you're trying to get obviously your shares at a very low price, and then you can't sell on the run up because the shares are restricted... that's why pump and dumps are long. because they play out over time.
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Insight----  Scam: why do all of these insiders and promoters have millions of shares of like a half-penny of a share. And then they're sending out mailers or tweets, or faxes, or press releases, just trying to get the stock price higher. So, in the SEC filings you look and see who's it benefiting if the stock really spikes. and What we find is that by looking at these SEC filings, you have all of these sketchy characters, and it's typically the usual suspects, the same people over and over again.. And they hire promoters and they get the stock up so that they can basically dump it. it's a very simple game - it's Pump and Dump.... So by looking at the SEC filings and just seeing who owns how many shares and at what price, and then you combine that with the knowledge that there's a mailer out there, or 50 people are tweeting the ticker (new ebola play!), why are they hyping it up, why is it in their interest to get this stock price higher.... And sometimes it's not just insiders who want to sell, sometimes the company wants to raise money at higher prices, so if you're stock was trading at 5 cents a share no one cares about, the company might design a 2-wk investors relations program where they'll have a press release every single day, an they'll get their lowly 5 cent a stock that no one cares about, they'll get it up to 50 cents or a dollar, and then do a financing with like 20 cents a share with some institutional investors. So that way, insiders can pay themselves a salary, and it's a lot less risk for investigation for a pump and dump,,,,, even though the only reason they got the stock up was so they could raise the financing at a discount price, and then gave themselves a salary. So it's a pretty evil, unethical game, but it's pretty easy to spot if you just look at who owns what, and then combine that with why they're pumping this stuff. -Tim Sykes
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Insight----  If a company has so little cash, and has millions of shares out there, then why is the stock going up? You can work your way back and say, ok this is a pump and dump, and pump and dumps always crash. -Tim Sykes
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ON MARKET MAKERS / #PROMOTERS
Penny stocks are in business to sell stock. Most don't have a real product. So they make money by pumping our press releases ... And when the stock price goes up on ‘good’ news, they dilute or do toxic financing. That usually kills the stock's momentum, sends it off a cliff, and burns anyone who holds shares because they believed the news. So the stock is hot while it’s running on news and traders experience euphoria. But when the party’s over, the stock is cold and dead... The life cycle of a chat pumper is similar… Chat pumpers buy up shares of a stock, then alert their followers and sell into them. So when the chat pumper has a lot of sheep that buy on their alerts, stocks can have huge runs. But after the pumpers murder all their sheep, their alerts go cold... So you’ll notice that there are periods when chat pumps are hot and can move stocks. Other times, the alerts mean nothing... So before you jump in a premarket runner, ask yourself if the pattern you’re trading has been working. Or if the stock has news, has it been a good catalyst in the current market? Is the stock you’re trading part of a hot market theme? -Bohen #promoters #pumpanddumps #pumps #dilution #toxicFinancings #financings #offerings #fundamentals

PROMOTERS AND #PUMP AND DUMPS AND #SHORT-#SQUEEZES
Pumpers know exactly when to pump. They know that shorts panic at those key level.
When shorts feel trapped and worry about a breakout, they cover their positions — which means buying shares.
Pumpers start promoting when the stock approaches these key levels. They know that if the shorts get scared, the stock can go on a HUGE run (#short-squeezed).
You have traders buying-in from the pump, and shorts buying-in to cover their positions. This is why short squeezes can be so crazy.
The larger a stock’s market cap and float, the harder it is to push the stock around.  
That’s why almost every chat pump is a low float stock.
Chatroom and Twitter pumpers want to take advantage of supply and demand.
Pumpers use chatrooms or Twitter feeds to create [fake demand] and bring in [volume]. They alert their followers to their position and convince people the stock’s the next best thing. 
Then they sell into the spike as buyers come in. Their goal is to profit from creating fake demand which drives up a stock's price...
But if a stock has plenty of supply (i.e. is a high float), a lot of demand and volume won’t move the stock quickly.
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            Pump/Promotion (newsletters, seekingAlpha, PR's) = POTENTIAL SHORT
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Min 7:30 -------- always TAKE PROFITS when you're in a low float, chat pump, chinese, press release play; don't get GREEDY! ----------- www.youtube.com/watch?v=uERBVWFNjbs ......... #takeProfits #scalingOut
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Low volume linked to a share-price increase is a negative sign, because any lasting upward price movement should be confirmed with increasing volume. <--- a pump&dump setup
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***Fading VOLUME gives the sign of when a stock is going to panic and drop..... The more volume, the higher the stock will go based on earnings news or promotion.. As volume fades, the stock will drop..... You can't keep pumps up forever, because pumps (promotions) are emails received that say "buy this" buy this".. 3-days 4-days is the max for pumps...
Buy pumps only if you can buy early in the pumps.. and then be very quick to get out....... you have 15 minutes to get out before it drops like 90 percent... it's tough to sell on the dumps, because they're going straight down.... TRUE PUMP AND DUMPS BEGIN VERY QUICK AND ARE OVER VERY QUICK...
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every single penny stock pump is designed so that whoever promoted the stock can sell their shares into a big spike at high prices...... if there is high volume, that means the schemers are selling the stock before the stock spikes.. all of this is artificial just to try and get people to buy the stock..... it always ends badly......always... -Sykes <---- DO NOT go long!
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Most people who trade penny stocks: they don't know the difference between catalysts. They don't know about volatility. They don't check these plays intraday (they might be working, maybe they check it once; they hold and they hope) and they just ride it all the way down. . . . . What usually happens is once they start seeing it more, maybe at night, after they're out of work, maybe they start seeing their account balance and they start thinking about the implications and seeing how far it goes down -- that's when they usually start to realize the risks of pennystocks and they panic, and they put in a sell order maybe before they go to work, they put in a sell order overnight --- b/c OTCs don't trade pre-market, it usually creates a ton of sell-orders at the open, and the newbies just get crushed, because even if you put in a sell order, doesn't mean that you're going to get executed. . . . . . Again, they're not thinking, they're not studying . . . . . this is the beauty of penny stocks, where you're just competing against a bunch of morons -- unprepared financial noobs. And all these people who are believing these companies, they're believing promoters, they ride it up and they ride it down totally untrained. .. And if you might think that I'm being harsh, I'm not. I'm trying to help you understand how moronic this niche is, how truly ignorant, incompetent, and non-meticulous people are so that you can better understand where the opportunities are. Because there's going to be a whole bunch of people who are putting orders in to sell at the open, and it is probably going to create a panic. Obviously the promoters could come out with a PR, the promoters could pump it up. . . And again these people who are buying don't know how penny stocks work. . . They're the same morons who are going to be panicking as the stock goes lower and lower, which opens the door to another morning panic. -Sykes
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Catalyst 18: chatroom / twitter pump / pump&dump #Okay
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Anything with NO news is most likely chat or twitter pumps. -[Breaking News Moderator] #catalysts
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Penny stock companies love to drop premarket press releases to drive up their stock prices. Then a few days later they have bad news like an offering and the stock tanks. Even if a penny stock company tries to be legit, a Twitter pumper will get a hold of the news and pump up the price. Then the company has to announce that it doesn’t know what’s going on with the price movements. And the stock still tanks. Either way, you’re screwed if you’re holding it. If you like penny stocks, that’s great. They can offer great trading opportunities. But know how easily penny stocks are manipulated. They don’t have real news or earnings. They’re great to day trade, but I beg you — don’t swing trade them. -Bohen
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A stock goes on a massive run due to a specific type of news, other companies in the same sector start to pump out similar PRs. Then you see sympathy plays. Then the news fizzles out and nobody cares.
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chat pumps --  nine out of 10 fail at the open.
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STRATEGY::::::::::: when a stock spikes/gaps up (esp. on positive news).... watch for a [dip and rip (after 9:45 am)], and an [afternoon VWAP hold breakout (after 2 pm); do not hold low float afternoon VWAP plays overnight however #caution]......... if it pulls back (and sucks in shorts), look for [a breakout] over that level........  keep the stock on watch until *volume dries up* and it dies. The lower the float of the stock (<40M), the better (the lower the market cap (<500M), the better). If it is a chat pump that's even better.
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What I try to explain to students is that we don’t care about the company, the offering, or why it’s pumped in chat rooms. A stock is just a four-letter ticker that represents a potential trade opportunity — IF we see a pattern to trade. Price action is most important. Not news, or whether it’s a chat pump.

Min 2 ---------- how reverse splits work (gems and key details about reverse splits by Dux) ------------- youtube.com/watch?v=XX5MYOOi4XQ .............
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Before you jump into any trade…
It’s best you know the ‘why’ behind the stock move. 
Is a stock moving on a rumor? Is it a social media or discord pump? Did the company drop a press release? Is there a hot sector that traders are moving in on?
Most importantly, is there a trading opportunity there that we can take advantage of?
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Is it a chat pump? (are chats pumping the stock? ---[if yes, that is a Pump-and-Dump sentiment #TakeProfitsQuick #TradeAfter9:45AM]
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Penny stocks are in business to sell stock. Most don't have a real product. So they make money by pumping our press releases ... And when the stock price goes up on ‘good’ news, they dilute or do toxic financing. That usually kills the stock's momentum, sends it off a cliff, and burns anyone who holds shares because they believed the news. So the stock is hot while it’s running on news and traders experience euphoria. But when the party’s over, the stock is cold and dead... The life cycle of a chat pumper is similar… Chat pumpers buy up shares of a stock, then alert their followers and sell into them. So when the chat pumper has a lot of sheep that buy on their alerts, stocks can have huge runs. But after the pumpers murder all their sheep, their alerts go cold... So you’ll notice that there are periods when chat pumps are hot and can move stocks. Other times, the alerts mean nothing... So before you jump in a premarket runner, ask yourself if the pattern your trading has been working. Or if the stock has news, has it been a good catalyst in the current market? Is the stock you’re trading part of a hot market theme? -Bohen #promoters #pumpanddumps #pumps #dilution #toxicFinancings #financings #offerings #fundamentals
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------------the next question is: WHEN WILL THE COMPANY DO AN OFFERING(s).......... this is the difficult part.......... in some cases it's easier to predict an offering date --- the best we can do is look at the stock's daily chart with technical analysis (looking at major resistance levels)...... also check the News/PR of the company, because typically the company will release good news/PRs to try to pump the stock price up AND THEN ISSUE THE OFFERING to get the most bang for their buck.............................. so, knowing that a company (under variables judged above) could issue an offering at anytime, you would not want to hold the stock overnight --- but if you were trading the stock intraday, i would see if it could break above the previous resistance and if it runs to the higher resistance (then once it reaches it's utmost level, that would ideally be the resistance level to get in Short in preparation of the potential dilution activity/an offering the company executes (leading to a HUGE DROP in the stock's price due to an increase in SUPPLY (of shares), in the market) ................ {source: https://youtu.be/d55SAYjBHd0}.
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If a company has so little cash, and has millions of shares out there, then why is the stock going up? You can work your way back and say, OK this is a pump and dump, and pump and dumps always crash....................find SEC FILINGS at www.OTCMarkets.com - free website.. type in the ticker.. you see all the filings that the company has.. They disclose who owns what.
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Min 40 --------- Min 44 (when SEC gets involved) --------- how PUMP AND DUMPS happen (details explained by Sykes)--------- https://youtu.be/5nmqcpvWZQk ...............

Knowing that a stock is a pump is so important because then you can start to piece together the predictable patterns. . . [STT "breaking news" follows all of the newswires (so you don't need to follow [all of them]), and alerts all of the pumps in real time]. . . . -Tim Sykes

I knew exactly why there was a panic.. . . because i saw all of the over-aggressive newbies in too many different chat rooms, on all of these websites, trying to hype it like "OPTI is coming back". OPTI is one of the most promoted names. If you ever talk bad about OPTI on twitter, just say like, "yo this is like a blatant pump", and see all the hate you get. Because the promoters can't let anybody mess with their house of cards, because it can come down tumbling any second. . ..  . .. . .When you have companies that have promoters involved, they're more predictable, because the promoters will not let it drop that much because if it ever drops 20-70% in a day with no bounces, then guess what, the SEC comes knocking and there might be an investigation and then the promoters are shit out of luck and they're probably going to get investigated. So the promoted stocks can bounce the best. Why do I like promoted companies? because they create such predictable patterns. I don't know who the promoters are, I don't encourage them. . The promoters are just going to always be oober positive, "this company is going to change the world!" -- shut up, just make my predictable patterns, thank you (lol). . . I stick to what I know. Patience is key. -Sykes

Throughout the day I am constantly trying to predict what is going to happen, but the bottom line is you can't. In a short time frame the results are completely random. You can have all the best indicators, candlestick patterns, level 2 and tape reading skills, fundamental analysis, volume forecasts, etc. and it still doesn't matter, NOBODY can predict what will happen in the short term.
That's why it's so important to have a system that allows you to remove yourself from the equation. If you allow yourself to trade based on what you “think” or “see in the tape/lvl2” you WILL lose. There is so much noise in the lvl2 and tape, so much manipulation that its better to be immune to it all and ignore it, how can you make sense of things that are inorganic and fabricated? You can't read the minds of pumpers/manipulators, you don't know when they will stop propping the bids, you don't know when they will start unloading shares, you dont know, period.
I love how all these guys on twitter claim to be fundamental experts and can tell from filings what is going to happen. Bottom line is you DON'T know what will happen or more importantly, WHEN it will happen.

TIPS kroyrunner FOR NEW TRADERS--------http://tradetheticker.blogspot.com/2014/02/some-tips-for-new-traders-from-old-blog.html
Tim teaches a lot of different strategies, and trying to trade them all at once can be a bit overwhelming, especially when first starting. In my early months as a trader, I experimented with buying pumps, shorting pumps, trading Nasdaqs with momentum, and even buying earnings winners. I traded with small size during this time, because I didn’t want to blow up my account. I wanted to figure out what strategy I was most comfortable with and what could bring me the most profit. ... ....   Ultimately, I settled on buying pumps. I was successful with this strategy because I then spent months learning everything I could about this one unique area - how to get early entries, how to best buy breakouts. I watched all of Tim’s video lessons about longing pumps - I even tracked the performance of different promoters on a spreadsheet and saved charts to refer back to later. Almost all of my trades were buying pumps from November until April, and only after buying pumps became second nature to me and I’d built up some capital did I move on to working on other strategies such as short selling. Perhaps pump and dumps won’t be your niche, but find what is and pour all of your energy into it rather than dividing your attention.
5. Get Level 2  ---   I traded my first four months without a level 2 feed, and looking back on that time now I can honestly say that it was like trading blind. While it isn’t quite as helpful with Nasdaqs as it is with OTCs, it still holds quite a bit of value in my opinion. Get it, learn how to read it, and use it to your advantage.
6. Trade Small Early  ---  never underestimate the experience factor. You aren’t truly ready until you’ve had some time to trade for real and get some practice in. So when you get started, use small size, get the dumb mistakes out of the way, and learn the subtleties that only experience can teach you. Your trading account will thank you for it in the end.
7. Buying Pumps Early Continues to be Superior Risk/Reward  ---   Getting in quickly on pumps upon announcement continues to be one of my favorite strategies, as well as one of my most profitable ones. The three trades above are all trades I made on new pump announcements. Between the three of them I made about $8,500, and I don’t think I held any of them longer than 15 minutes. One of the most important things to note with trades like this is you MUST be careful not to chase too much.

Strategy---------- TYPICALLY,   first red days are potential shorting opportunities (especially on pump-and-dumps)...  and First green days are potential long opportunities..... -tim sykes
 

Use StocksToTrade news, OR Twitter to see the promotions of promoters promoting These pump and dumps... or use both!           #NEWS #CATALYST #PLAYS

2. Listed stocks that fall below $1 are subject to delisting. Companies will try to pump their prices to stay compliant.

Min 3 -------- Min 19:30 ---------- on pumps -------- www.youtube.com/watch?v=l7w2IhPX5PY ........... #Sykes #crypto #pumps

When a stock runs 4,000%, there's bound to be a few sympathy plays in the sector... What a lot of people do is over-complicate it. . . . DRYS was going to 100%, and there was 3-4 other shippers that were running... Then from then on, anytime there was a big runner, i knew there was going to be sympathy plays. Most of the money I made in 2017 was based on that... It's something that I've always loved, and the wealth of opportunities that a good sector run can bring to longs and shorts... Does sympathy mean you have to predict, or look for a sign? Sympathy plays can be super sketchy, i don't like to chase them. My goal when there's a big runner, is to locate the possible sympathy play quickly, and then watch it for a while.... My goal is to be there before all the chatrooms realize it's a sympathy play and start pumping.... A lot of small gappers, a lot of pumping going on... we're kinda like sheep, everyone just kinda buys the same stuff and chatrooms alert other chatrooms..... Are these plays that you're in and out, or that you want to hold? It just depends... The leader of the sector was up 4000%, at some point it was going to pull super hard, and if people think the leader is going to fail, the sympathies will fail also... I'm trying to take great risk/reward.... -Roland Wolf

But the problem is too many think they’re buying the next Microsoft. The reality is, they’re boarding the hype train.
There’s nothing wrong with riding hype — but never, ever believe it. And always wait for...

[Michael Goode] ...He shorts a lot of pump and dumps. He holds them for a few weeks or a few months, and he might win 50%, 60%, or 70% on one trade, and that increases his average percent gains. But on average his dollar gains are much smaller and this is good to show because he’s made a little over $2 million.* 

[Tim Lento] primarily shorts pumps using Interactive Brokers. Shorting is tough, but he uses the broker, he holds it, his average gain is roughly 14%. He’s winning 80% of the time.

QUESTION: That’s awesome. Are there any red flags that you see in a chart? Because you’re not just going to randomly buy any stock that’s up 50%. What exactly are you looking for?
* Yeah. So that’s a good question. Even though I’m interested in a catalyst, I’m interested in the big percent gain. That’s not to say I’m just going to chase anything.
* If a stock is already up 100%, 200% on the day, it could also crash. It could also drop even with the slightest bit of news.
* Also, look at a company’s balance sheet. Do they need cash? A lot of these high flyers announce good news in the morning, getting everyone excited … And then in the afternoon, they do a toxic financing at a 50% discount. So they pump up their own stock. Then they dump it and raise millions to pay their inflated salaries.
* So you have to be careful about chasing. This is why I like buying stocks that are up 20%, 30%, 40%, not 100% or 200%. The more it’s up on any given day, the greater the risk.

Scroll through the feed to see how traders tweeted about the stocks. Was it pumped? Did any traders trash talk the stock? Was anyone completely enamored by the hype? 

you have to look into stocks that are up for the wrong reasons. A promotion is up because they’re sending out mailers every day. 
But by definition, with a pump-and-dump campaign, you pump up the stock, and then the stock has to dump. So there’s a point in time before the dump and after the pump where it’s just standing there. 
Do you ever play Mortal Kombat? When you’re about to kill the character and he’s just waving around. And it’s like, “Finish him.” 
That’s the point where it’s a first red day and you just want to finish him. So it’s fun to short the first red day. There’s often a nice morning panic on day two, as stop loss after stop loss after stop loss gets taken out.
If you’re short, it’s like surfing a tsunami of sellers. 
It’s a beautiful feeling. If you’re long… (!) You try to get out of your position, but as the stop losses are getting taken out and the stock crashes … there might be a 30% to 50% drop in the first five or 10 minutes. 
So you can’t necessarily get out very easily on a first red day. So if you’re long, a stock that’s up 100% to 1,000% in the past few hours or days and it doesn’t finish high, be very careful. That little drop can turn into a landslide. 

When I came up with the seven-step framework, I had no idea it would apply to this niche for so long. Back then, it was common for paid promoters to pump penny stocks. When the price went up, the company dumped shares into the market to raise money. Then the price tanked. That first big red day was a sign for short sellers to get in. 
Since then, the SEC has largely shut down promoters. Those left in the game don’t do nearly as good of a job. Yet my framework still plays out time and again. Penny stocks still get ahead of themselves. And meaningful first red days are still a sign for shorts to get in. 
When penny stocks go supernova they get ahead of themselves. 
Think about it. How can a company that’s losing money go from a market cap of $50 million to being worth $100 million overnight? Even with a good catalyst, many of these stocks crash fast once they lose upward momentum. The first red day is often a sign a penny stock’s big run is coming to an end. 

QUESTION: I know a lot of your students like to short these, but you can kind of long them. They’re really dangerous nowadays, but that’s just promotions. Also known as pump and dumps by some people, they were really popular in the past. Recently, the last couple of years, they’ve kind of faded off. Why is that?
ANSWER: If you’ve seen the movie “The Wolf of Wall Street,” you know there’s no one wolf of Wall Street anymore.
They used to do hard copy mailings, then they resorted to email, and now Twitter promotions. As long as you put a disclaimer on the bottom of your advertisement saying, “Hey, we’ve been paid, $20,000 or 200,000 shares of cash to advertise this stock to you,” technically it’s legal.
But the way that they really get their stock prices up, they do all kinds of shady stuff in the background. Their job is — they get paid in shares or cash or a combination — to get the stock up because whoever is paying them is dumping the shares. 
This is where the term “pump and dump” comes from, right? Their job is to pump the shares up so that the insiders or whoever is paying, sometimes it’s an outside party, dumps the shares.

FRAUDULANT SCHEMES
So let’s say you’re some unscrupulous businessman and you’re like, “I have five million shares of this little piece of crap penny stock. How do I sell it? There’s not enough volume. No one cares about it. Let me hire a firm. Let me pay them…” 
If you have five million shares and the stock is trading at $0.02 a share and it’s worthless, you want to sell it at a dollar a share.
So, theoretically, if you sell all the shares at a dollar a share, you make, you know, five million dollars. So let’s spend $700,000 amongst different promoters to get the stock up from a penny to $1. 
They send out tweets, they send out emails, they pump out a bunch of press releases. “Look, we found gold. Look, we have a crypto mining company. Look, we’re delivering weed now. Look, we have the cure for coronavirus.” 
Whatever hype they can generate to get people to buy this stock that was trading at a penny or two when no one cared about it. Let’s say they’re successful in spending $700,000 and they get the stock up to $1.50, $1.75, $2 a share. The insiders or whoever paid for the pump mailers or the pump tweets or whatever they did to get the stock up, they’re selling shares all along the way.
They’re also buying shares. They’re trying to get the stock up. So they’re pretending that there’s more buying power than there is. They’re buying let’s say 5,000 shares on a day or 20,000 shares on the day and selling 200,000 shares. 
Maybe they want to get a stock up a lot, so they buy a hundred thousand shares so that it’s reported on all the message boards, “Somebody bought a hundred thousand shares.” Then they dump 300,000 shares the same day, whatever they can do to generate interest, to get the stock up. So that — let’s say they spend $700,000 on the promotion, maybe they spend another $300,000 buying the stock. 
So they spend a million dollars, but if they can cash out at, let’s say, $1.50, they make $7.5 million. $7.5 million minus the $1 million they spent getting the stock up, they make $6.5 million.
Once they sell all their shares, there’s no reason to pump it up. There’s no reason for any more press releases. The stock crashes, usually in one, two, three, four days. 
Sometimes, the promoters don’t sell their entire stake because they do multiple promotions so that they don’t want the stock dropping 90% because then there might be an investigation. They might get found out and they’d have to resort to going to Panama or Belize or Cyprus or one of these countries that a lot of promoters seem to congregate in.
 
Key Point: Promoters Get Paid to Pump Stock Prices ===== Penny stocks can experience short-lived spikes as a result of paid promoters working hard to pump up the price. Then insiders (or whoever paid for the promotion) can sell off their shares for a profit. It’s a tricky pattern to play, because what used to be called the “pump and dump” scheme has evolved and changed a lot over the years. 
 
Key Point: Once Promoters Sell, There’s No Reason to Keep Pumping ======= Once promoters sell their shares in the hyped-up stock, there’s no reason to keep pumping it. Usually, this leads to a crash within a few days. Why? Remember, trading is supply vs demand. The promotions drive the price up by creating temporary demand. After the promotion the stock tanks due to the drop in demand. 

So, usually, promoters try to drop it in an orchestrated manner, too. This is what’s so crazy. It’s not just a pump on the way up. It’s an orchestrated dump on the way down, although they don’t really seem to be doing a good job lately and a lot of the promoters get investigated, their email list gets shut down, they sell their email list. It’s just a dying industry. 
The good news is, lately, we don’t even need promoters because short sellers are the new promoters and they’re spiking stocks out faster and more efficiently than the promoters ever did. It’s actually the exact opposite of what short sellers want to do. It goes against everything they believe in, but that’s what happens in a crowded market. We’re seeing these gigantic short squeezes.

Key Point: You Don’t Have to Short Sell This Pattern to Profit ======== As Tim notes, you don’t have to be a short seller to take advantage of pumped up stocks. These days, he prefers to go long by dip buying the morning panics instead.

Why do promoted stocks fall so fast? 
            * Once the promoters sell, there’s no reason to keep pumping the stock.

ON PUMP AND DUMPS -------- www.youtube.com/watch?v=5SVQkzDbGgs .............

HOW TO KNOW WHEN A STOCK IS A PUMP AND DUMP --------- www.youtube.com/watch?v=IfK5wS6ADi0 ........

Key Point: Use the Leader to Find Your Winner ========= Tim usually does better with the sympathy play than the sector leader. That’s because he lets the leader inform his search. The idea of a stock market self-fulfilling prophecy comes into play as traders use social media to pump their picks.   

Pump and dumps don't exist anymore. .  .what exists now are REVERSE SPLITS that are pumped by the companies themselves. . . . Companies do REVERSE SPLITS b/c the Nasdaq has minimum listed requirements (at a certain price, over a certain amount of time, or Nasdaq kicks the stock off their listing). . . . REVERSE SPLITS reduces the number of shares outstanding. . . you increase the price of each share, but decrease the amount of shares available. . . . They reduce the inventory, and up the price. . . . These companies take advantage of the fact (of reverse splits), they put out a press release, the press release -- brings Volume -- and volume creates unusual price action. . . so the press release on a reverse split brings volume which tends to spike the stock. . . -Bohen

QUESTION: are you able to identify pump and dumps watching level 1 and level 2?
ANSWER: no. . .

Remember how pumps play out longer term. .  they fail............. insiders cash out and they (the stock) gets halted......... that's really all you have to do.........when you get bought in (on shorts), you just get punched..... you should re-short if the pattern is there......   -Tim sykes

The insiders want to dump their shares ---- that is the ONLY reason why you pump up a stock. . . and i have to thank them for that. -Tim sykes

#1: Pre / Early pump - most of this pumping is just to get a stock up, and that is how these promoters and companies survive. . . these companies are going nowhere. . . This setup is best for patient people and small accounts looking for big percent gains. . .
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Have no expectations, just take it one pump and dump at a time!.......When all the variables align (the right stock) (the right hype) (the right press releases) (the right market) -- 3 out 4 stocks follow the market, you should know that --- if you wait for all of these variables to align the ODDS OF SUCCESS go way up........ -TIM SYKES
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CNBC is the cause behind a lot of stock pump and dumps....don't trust any of these financial experts.. they're not experts... don't listen to the media.......... Dumb money follows people on TV.........CNBC is one of the greatest pump and dumpers in the world..... they don't actually profit it from it directly but they profit from it with advertisers, with people viewing it............they cause a lot of PUMPS...... assume the worst of everybody.........I wrote for TheStreet.com...... they don't let you cover penny stocks... no one covers penny stocks in the mass media....... -sykes
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The most common players you’ll meet in penny stocks are amateurs. They often fail to conduct research and are therefore more likely to fall flat on their faces. Stock pickers tell you the stocks in which they think you should invest. In many cases, you can’t trust them, especially if they’re promoters, since they’re probably getting paid to “pump up” a stock, which means you can’t base your decisions on their advice.

Insight------There's always new opportunities on the horizon............. you don't need to be in a trade every single day...... there's always going to be little piece of crap companies that need to pump their stock up so they can actually raise money....... it's a beautiful, kind of disgusting process (love-hate).........

#1 Pre/Early Pump --------- starts at Minute 5 ------------- PSFW Part Deux – Part 2 ---------- https://members.timothysykes.com/lessons/psfw-part-deux-part-2 ............

Part 8 of pennystock framework part deux ------- min 27:30 & min 30:30 ------ snip tool the lie of the sentence he highlights, regarding the pump & dumps.......
Part 8 of pennystock framework part deux  ------------ min 28:40 - min 31 -------- how pump and dumps happen #verbatim....... 

·         PUMP AND DUMP OTC --------- starts at Min 3:16:00 in "Part 2" of Trading Techniques DVD.... Min 3:29:10 of "Part 2 ORIGINAL" vid....

Nasdaq vs OTC pump and dumps ----------- Min 3:29:00 of "Part 2 ORIGINAL" vid...
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What is a pump and dump? .......... If you've seen the "wolf of wall-street" or "boiler room".. you have these insiders who have millions of shares of this worthless junk company and they send out mailers\telemarketing phone calls (whatsapp, twitter, social media and they buy adds on different financial websites) and they market this piece of shit company so that they can sell their millions of shares for inflated prices..... they're getting 10 million shares at a few pennies, and they say "this company found gold in Peru!".. and they mark it up and they try and get it up to $1 or $2 a share ... They pump it up in marketing, but once they sold most or all their shares, they don't market anymore and these stocks drop 40+% in a day........  Patterns have not changed because pump-and-dumps are running the same......... -tim sykes

Sykes likes shorting DESCENDING TRIANGLES — especially when there’s ad news or the stock was a blatant pump ...

METHOD TO THE MADNESS----The reason why penny stocks go up is due to a promotional mailer.........it doesn't matter what the product is......The way they go about it is the same exact process as every other pump (although, there's different press releases).........it's artificial....promoters are trying to make you believe it's trying to go higher...once the stock starts to go side-ways the volume starts to diminish and the stock will drop.........

STRATEGY---- Always look for shares to short... It's very difficult to lose, when trading pump and dumps , when you know they're pump and dumps... -Tim Sykes

Insight--- Lots of my millionaire students like to short penny stock pumps......... -Tim Sykes

My largest loss was over $84,000. I learned a few important lessons from this trade. First, I learned that it is important to never have a large position in an illiquid stock. Second, I learned that the one big risk to short-selling pumps for longer periods of time is the risk of a forced buy-in when my broker can no longer lend shares for me to short. -Michael Goode

INSIGHT------- Low volume linked to a share-price increase is a negative sign, because any lasting upward price movement should be confirmed with increasing volume. <--- a pump&dump setup

Fading VOLUME gives the sign of when a stock is going to panic and drop.... As volume fades, the stock will drop..... you can't keep pumps up forever, because pumps (promotions) are emails that say "buy this" buy this".. 3-days 4-days is the max for pumps...

STRATEGY------ i focus on specific buy points, sell points, & specific catalysts. i don't just short a stock because i see the pump is over...what i'm looking for is IF THE NEWS IS NOT WORTH IT.. so then i can short-sell.........most pumps fail in the $3,4,5 dollar range.

RULES FOR SHORTING PENNY STOCK PUMPS
Insight--- ~~some stock pumps can last days, weeks, so you don't have to start SHORTING right away.
Insight---When volume fades and once the e-mailers fade, it's inevitable the stock crashes too...but some pumps put up a fight before crashing.
Strategy---~~~~~Look for failed breakouts, slightly red day and afternoon breakdowns to signal a possible morning panic the next day.
Strategy---~~~~~I love being SHORT during morning panics........and covering into a tsunami of sellers.
Strategy---~~the higher the stock goes, the better for me as a short-seller, because i know the end is zero.
~~~~be careful if a pump doesn't morning panic........this is promoters purposely squeezing you..... if you're aiming for a big panic and you don't get it, i like to cover and cut my losses quick.
Insight---~~Shorting pumps long-term sounds logical and great, but it is expensive due to fees (margin interest).
!!!!!!!~~SHORTING ON FRIDAYS, Be scared shorting on Fridays, especially in the afternoon........watch out for Friday short squeezes..
Strategy---~~SHORTING A HALTED STOCK...if you short a pump that gets halted, THAT IS GREAT... But it's not an exact science so don't aim to predict halts.....a halt is really good for short-sellers b/c if you're shorting a blatant pump, they're going to do an investigation and will see these artificial mailers.... and you will cover for 50-99% gains within a day or two...

NON-PENNY STOCK PUMPS
~~When you're shorting a non-penny stock pump, it can be very scary. -Tim Sykes
~~You don't need to be glued to the computer every second. The best plays happen over several days when shorting non-penny stocks. -Tim Sykes

Strategy---------If you just wait for great setups: wait for pump and dumps to short-sell them when they come about... Wait for these hot sectors like marijuana and the Ebola and the police camera.. wait for ridiculous run-ups that aren't based but on one patent.. Even if you only check into the markets once a day, look at the %Gainers.. the crashes don't come but about a few days later, Day 6.. -Tim Sykes

Strategy------i like to short on technical breakdowns.. .on true paid pumps i like to short on a first red-day... -Tim Sykes

We all know that OTC pumps are worthless... but it's money that controls markets.. who holds the most shares, and what they want to do with the stock... then once they're done controlling it, then it fades back down to zero... -Tim Grittani

HOW TO----------- The first down day, in a paid pump, is usually the beginning of the end. <-- then is when you want to SHORT SELL (DURING THE FIRST DOWN DAY, OF A PAID PUMP). #greatOpportunity

I have made millions over the past decade and now my students have made millions over the past few years mainly shorting pump and dumps, but there aren't unlimited shares available to short hence why I'm a teacher and not a hedge fund manager... -Sykes

When a stock gets halted, it usually drops 100% of the time (afterwards)... The government knows what's going on... The government halts the stock to protect investors... crazy stuff happens when you have these companies that are just bullshit..... Short-selling a pump when the volume has already started to fade after it's spiked is one of the safest trades... As long as there are pumps, I'll keep shorting them...... -tim sykes

It's good to be aggressive (in shorting) pump-and-dumps after they crash.... They crack so quickly (i.e. $.50 cents inside of an hour)... .-Tim Sykes

Min 17:45 -------- when SHORTING pumps ----- take small sizes and big sizes according to these plays ------------- !!!!!!!!!!!!!!! -------------- www.youtube.com/watch?v=V8QS39_usz4 ..............

-FInd stocks that have gapped up on news in the morning (note the news is usually bullshit pump). --You can find premarket movers at thestockmarketwatch.com, under the tab premarket (free scanner, why pay for shit)

Two things will happen at the open:
 A) a spike at the open (where pumpers/chat rooms pumped it up). let it spike, the higher the spike the better. Don't have any fomo, just let it run, no fear the chat room pumpers will dump it on there chat members soon (usually around 0945). it will pullback. After the pullback short the pop going back into the spike. Your clear risk is above the spike. Ride that baby down. (the reason it works is psychological, we can discuss if you wish)
B) A dump at the open. The stock opens and just dumps hard. massive panic (think FRAN on 7/28). Let it dump, relax, drink your coffee and watch it, you are waiting for a pop. On the dumps at the open, I like to use a pop into VWAP or the high of the opening candle. Your risk is the high of opening candle or the pivot that will be created at VWAP. ride that baby down.
Note: If you are a beginner you can use a standard deviation band indicator to help identify the top and bottom. After about a month you won't need it, you'll just see it. Matrix like, trust. facts.

Shorting the first red day on recent pump and dumps (SHORTING FIRST RED DAY)........ one my three favorite patterns (other two are: buying morning dip-buys, buying first green days)..... -Sykes

When shorting a first red day pattern, think: how many days can a pump and dump spike before the first red day........ see the pump and dumps (wait for the plays), look for stocks promoted in different channels, wait for it to spike a number of days, and start looking when a pump and dump starts turning down....... form a thesis (identify a pattern), wait for the pattern to happen again and again and again, trade it with a small position, and keep meticulous track (you are a scientist)...... always experiment with new patterns......... the key is: always adapting..... -Sykes

Shorting into pump and dumps is nice, but until you have the right pattern, shorting into pump and dumps is dangerous..... -Sykes

Min 20 - Min 22 ----------- That's how stock's move, they move with momentum first...... Momentum is a big thing. The stronger the stock the better, which is counter-intuitive for many people but it's true (stocks that make the biggest moves are usually the ones that KEEP MAKING THE BIGGEST MOVES.. and I'm not talking about meme stocks or pump and dumps, but mid-cap and large-cap stocks; that's not really the type of stock's i swing trade (even though if i was still a day-trader i would trade them intraday b/c those are the ones that have the biggest intraday range)).......Buying breakouts and selling after Day 3 or Day 5 is how Qullamaggie trades breakouts typically (he will AT LEAST sell 20% - 30% of his shares by Day 3 or Day 5, depending on how strong/well the stock is still performing ---------- www.youtube.com/watch?v=K0F73Sq90j0 ........ #breakouts

The OTC market is so hot and cold..... If it is a stock that is either being pumped, or if it's in a hot sector at the time, the technicals will be pure with the possibility of a green-day to extend into a gap-up and second green day..... But the vast majority of days i don't see OTCs in favor.... judge the market environment........ -Grittani

PUMPS CREATE PREDICTABLE STOCK PATTERNS (7-step framework)
PROMOTERS PUMPING UP STOCKS
PREDICTING PRICE ACTION
Do not buy a pump after the tape has risen 200% in 2 days...... #patterns  -Sykes
Do not buy a pump after the tape has risen 200% in 2 days...... #patterns  -Sykes
Do not buy a pump after the tape has risen 200% in 2 days...... #patterns  -Sykes
Do not buy a pump after the tape has risen 200% in 2 days...... #patterns  -Sykes

Hype and speculation provide trading opportunities. Newbies LOVE to jump in during a penny stock pump or a perfectly timed press release.

Min 5:30 - Min 8 ---------- pumpers are fickle, and on to the next pump, so when the stock rejects VWAP and dips below low of day, etc., it then is a great time to SHORT| short using VWAP as support (when it breaks VWAP, cover your short) !!!!!!!!!! GREAT VID -------- www.youtube.com/watch?v=zBow5Dkc5Wo ........ #shorting #alexTemiz #pumpers #MIC

Min 5 ------- Min 16:30 (temiz doesn't use Level 2 when shorting) ------------ gems on shorting / pump and dumps!!!!!!!!!!!!!! ----------- www.youtube.com/watch?v=YPg_gPZUFUg ........... #shorting #alexTemiz