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Trading Tips-Tim Sykes Penny Stock

3 Tips For Profitable Trading RIGHT NOW

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Written by Timothy Sykes
Updated 2/22/2024 8 min read

At any given time in the market, certain patterns will be more popular than others.

I’ve been using the same patterns for over 20 years, but the patterns manifest within a larger framework.

Depending on overall market strength, certain parts of the framework will be stronger than others.

I can profit in every market because I have enough experience to recognize the patterns.

For my up-and-coming students: I show them which plays are hottest during each market.

Right now, the 2024 market is surging higher. It’s unbelievable! The momentum from a rallying tech sector is out of control haha. But you don’t hear me complaining …

There are more profit opportunities in our niche when the market is hot.

That’s why we have to capitalize NOW. You never know when the momentum will shift.

For example: Over the last few days, the bull market pulled back in anticipation of the NVIDIA Corporation (NASDAQ: NVDA) earnings report on February 21.

A poor NVDA report could have been the end of this rally.

The earnings data dropped on February 21 during after hours …

  • Total revenue rose 265% from a year ago.

As a result, on February 22, NVDA and the S&P 500 ETF Trust (NYSE: SPY) shot to new all-time highs. There’s a chart of the SPY bull market below:

SPY chart multi-month, 1-day candles Source: StocksToTrade

Now is the time to trade!

The best traders react to the momentum in the market. And right now, there are A LOT of stocks surging.

Don’t get stuck on the wrong side of these patterns. There are 3 common setups that you need to watch right now.

#1: Panic Dip Buys

© Millionaire Media, LLC

In my Penny Stocking Framework, this is a #5 and #6 pattern.

Here’s the whole framework.

There are a lot of stocks spiking right now. But in our niche, most of the spikes are unsustainable. Penny stock prices will crash eventually.

“Why would you ever trade a stock that’s going to crash?”

Because these stocks can spike +1000% while following our common patterns to a T. If we’re wise to the price action, we can get in and out with a profit before things turn sketchy.

One of my favorite patterns actually involves trading on the way down. And I’m not talking about short selling.

A panic dip buy is an opportunity that manifests when a hot stock starts to fall from its highs.

When the price falls too far and too fast, there can be a momentary and substantial bounce. We’ll use the recent runner, Intuitive Machines Inc. (NASDAQ: LUNR) as an example.

Take a look at the +230% multi-day run up and subsequent 30% selloff on February 21:

LUNR chart multi-day, 15-minute candles Source: StocksToTrade

I didn’t trade the February 21 panic dip buy, but some of my students did.

The Tweet below shows a perfect example of this trading pattern.

Keep an eye on penny stocks that are logging multi-day runs.

They’ll crash eventually, and that’s where we wait for profit opportunities.

#2: The Best Market Spikers

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We can profit on the front half of a spiker too.

Here’s what I look for when trading a bullish runner as it surges higher:

  • Fast spikers.
    • Usually these stocks spike in premarket. I’m looking for anything above a 20% intraday move. If it can spike 20% it can spike higher.
  • A low float.
    • The float is the total share supply available for trading. A constricted share supply will help stocks shoot higher when demand increases. We want the float to be less than 10 million shares.
  • High trading volume.
    • The volume shows how many shares are traded. We want at least 1 million shares traded on the day. That ensures enough liquidity so that we don’t get stuck. And the higher the trading volume, the more popular the stock is. That helps it spike. A full float rotation is really exciting to see.
  • A hot news catalyst.
    • There needs to be a reason for the spike.

Here’s an example:

Motus GI Holdings Inc. (NASDAQ: MOTS) announced a new patent in a filing on February 20. See the date stamp below:

Source: Profit.ly

Oooooo, automatic self-purging features, very cool!

Just kidding: This is a perfect example of crappy stock that spiked with hyped-up news.

The float was only 551,000 shares. Prices launched 160% after the news came out and I traded it during premarket hours.

Find more stocks that fit the factors above!

#3: Overnight Plays

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This is an attractive option for traders who also work a day job.

Some of the markets hottest stocks will continue to run after day one. Overnight swing trades help us take advantage of that momentum.

Theoretically, we find a strong stock pushing higher and build a position above support before the market closes. Then the next day, we sell our position when the market opens.

It’s easier said than done. But you don’t have to do it alone.

Since the advent of AI in 2023, I worked to create an AI bot that can find the best stock setups that follow my process.

It’s called XGPT, and one of the most recent wins was from Ventyx Biosciences Inc. (NASDAQ: VTYX).

XGPT alerted the spike a day early:

The AI system sends out a daily alert at 3:16 P.M. Eastern. If there’s a potential swing trade to play, you’ll get an alert and a trade plan.

You can enter before the market closes or wait for the next morning’s bullish confirmation.

And it’s not just the 3:16 alert … If there’s a morning runner you want to trade, enter the ticker symbol into XGPT and you’ll get a trade summary as if you asked me directly.

Try XGPT for your next trade.

New traders don’t know what they don’t know.

It’s my job to teach them. And XGPT is the most advanced teaching tool that I have right now.

Cheers.


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Author card Timothy Sykes picture

Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

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* Results are not typical and will 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

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”