Financial goals: Tactics for 2011 - Stock Market

My second approach to my financial goal this year will be to leverage my knowledge on the stock market.

I will mainly use Tim Sykes' method.

So every night I will look at the day's most active pennystocks. Look at their fundamentals and see which of them are only a smoke show. Then the next morning I will short the sucker and hopefully cash the profit.

I entend to make at least 1 trade per week. And my objective is to make at least 5% profit (after commission fee) on each trade (on average). I will commit an amount of 500$ to 1000$ on this project. If all goes well, the business plan for this tactic should go like this:

Now there is an underlying premisse here that needs to be understood. This model implies that on each trade I will commit 100% of the capital. Financially speaking this is not wise. Therefore I will have to implement a protection mechanism to make sure I don't loose everything. Let's say that at -5% ROI, I pull the plug on the trade and move to the next gig.

The other thing with this is that my broker is very greedy. It charges me 29$ per trade. this means that I need to do 58$ of profit before making a penny for myself. I will have to work in the coming weeks to find myself a good broker that charges way less per trade.

I also recommand that you read Tim Sykes' book. Its full of insights and information.