Pennystocking Framework.rar: What Is It and How to Use It
If you are interested in trading penny stocks, you may have come across a file called "Pennystocking Framework.rar". This file is a compressed archive that contains a video course by Timothy Sykes, a famous penny stock trader and educator. In this article, we will explain what the pennystocking framework is, how to use it, and where to get it.
What Is the Pennystocking Framework?
The pennystocking framework is a 7-step pattern that describes the typical life cycle of a penny stock promotion. A penny stock promotion is when a company or a third party pays for marketing campaigns to hype up a low-priced stock and attract buyers. The goal of the promoters is to pump up the stock price and then dump their shares for a profit, leaving unsuspecting investors holding the bag.
The 7 steps of the pennystocking framework are:
The pre-pump or promotion: This is when the promoters start sending out newsletters, emails, social media posts, or press releases to create buzz around the stock. The stock price may start to rise slowly as some traders buy in anticipation of a bigger move.
The ramp: This is when the stock price begins to spike rapidly as more and more traders jump on the bandwagon. The volume and volatility increase dramatically as the stock becomes a hot topic on chat rooms, forums, and blogs.
The supernova: This is when the stock price reaches its peak and starts to show signs of weakness. The promoters may issue more hype to squeeze out the last buyers, but the selling pressure becomes too strong. The stock may experience one or more big spikes followed by sharp drops, forming a parabolic curve.
The cliff dive: This is when the stock price crashes hard as the promoters and early buyers dump their shares. The volume and volatility remain high as panic selling sets in. The stock may bounce slightly due to short covering or bargain hunting, but the overall trend is down.
The dip buy: This is when some traders buy the stock after it has dropped significantly from its highs, hoping for a bounce. The stock may rebound slightly due to oversold conditions or news catalysts, but the bounce is usually short-lived and weak.
The dead pump bounce: This is when the promoters try to revive the stock by issuing more hype or fake news. The stock may spike briefly as some traders fall for the trap, but the bounce is usually lower than the previous one and fades quickly.
The long kiss goodnight: This is when the stock price fades into oblivion as the promotion ends and the interest dies down. The volume and volatility dry up as the stock becomes irrelevant and forgotten.
The pennystocking framework is not an exact science, but rather a general guideline based on observation and experience. The steps may vary in duration, intensity, and order depending on the stock and market conditions. However, once you understand the rationale behind each step, you can recognize them more easily and adapt accordingly.
How to Use the Pennystocking Framework?
The pennystocking framework can help you trade penny stocks more effectively by identifying potential entry and exit points, risk-reward scenarios, and trading strategies. Depending on your trading style, you can use the framework to either buy or short sell penny stocks at different stages of the promotion.
For example, if you are a long-biased trader, you can use the framework to:
Buy during step #1 (the pre-pump or promotion) if you have done your research and have a strong conviction that the stock will spike soon. This strategy requires patience and discipline as you may have to wait for weeks or months before seeing any action. You also need to have a clear exit plan in case the promotion fails or gets delayed.
Buy during step #2 (the ramp) if you see a clear breakout with high volume and momentum. This strategy requires speed and agility as you need to act fast before the stock gets too extended. You also need to have a tight stop loss in case the breakout fails or reverses.
Buy during step #5 (the dip buy) if you see a strong support level holding after a big drop. This strategy requires timing and skill as you need to catch the bottom before the bounce. You also need to have a realistic profit target in case the bounce is weak or short-lived.
If you are a short-biased trader, you can use the framework to:
Short during step #3 (the supernova) if you see signs of exhaustion or reversal after a huge spike. This strategy requires courage and conviction as you are betting against the crowd. You also need to have a large account and access to shares to borrow in case the stock squeezes higher.
Short during step #4 (the cliff dive) if you see a breakdown with high volume and momentum. This strategy requires patience and discipline as you may have to wait for the stock to crack before entering. You also need to have a clear exit plan in case the stock bounces or consolidates.
Short during step #6 (the dead pump bounce) if you see a lower high with low volume and momentum. This strategy requires timing and skill as you need to catch the top before the drop. You also need to have a realistic profit target in case the drop is slow or shallow.
No matter what strategy you use, you should always follow these basic rules:
Do your own research and due diligence before entering any trade. Don't blindly follow anyone's alerts, picks, or recommendations.
Use proper risk management and position sizing. Don't risk more than you can afford to lose and don't overtrade.
Cut your losses quickly and let your winners run. Don't be stubborn or greedy.
Learn from your mistakes and successes. Review your trades and keep a journal.
Stay humble and hungry. Don't get cocky or complacent.
Where to Get the Pennystocking Framework.rar?
If you want to learn more about the pennystocking framework, you can get the video course by Timothy Sykes from his website. The course is called "Pennystocking Framework Part Deux" and it is a 12-hour guide that updates the original 7-step framework with recent examples, tips, and nuances. The course costs $397 and it is 50% off during its initial special offer.
You can also get access to other free guides, blogs, webinars, and newsletters by Timothy Sykes from his website. He also offers various paid services such as DVDs, books, chat rooms, alerts, and mentorship programs for different levels of traders.
However, before you buy anything from him or anyone else, you should do your own research and make sure that it suits your goals, budget, and learning style. Remember that there is no magic formula or shortcut to success in trading. It takes hard work, dedication, and education to master the art of pennystocking.