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Trading Lessons

5 Stocks, 5 Lessons, and My Hot Take On The Market

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Written by Timothy Sykes
Updated 7/21/2023 6 min read

I’m having one of my better months of trading all year.

Chalk it up to being more disciplined.

But also more opportunities to take advantage of.

Today I want to talk to you about five stocks I’m watching, the five biggest lessons from this month, and my hot take on the market.

#1 Gorilla Technology Group (NASD: GRRR)

Lesson: Good News Is Being Priced In Quickly 

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I’ve noticed lately that we’re seeing very bullish news on some stocks… but the prices are not reacting as expected.

This stock is a recent spiker, going from $2 to $7…

Last Thursday, it had bullish news when it announced a strategic relationship with British Telecom for its AI-powered smart port solution.

I played it following pre-market news (thanks to STT Breaking News) with my typical morning panic buy…

It was good for a fast 3.6% profit…

Which was solid considering how poorly the Nasdaq was performing that day.

Nonetheless, you don’t want to get overly excited if you miss the initial spike following a breaking news headline. You’ll likely get a second chance to play it.

 

#2 Applied Optoelectronics Inc. (NASD: AAOI)

Lesson: Price Action Still Isn’t Clean

This stock went from a low of $1.55 in May to a high of $11.48 in July…

Source: StocksToTrade

AAOI is trying to find some support after it’s massive breakout…

I love long-term multi-breakout charts…

But as you can see, the price action isn’t clean.

One day you think the stock will squeeze, and it does nothing…

The next, you expect it to get crushed, and it actually has a strong day.

You’ve got to be careful with these types of plays.

One way I’ve been approaching them is by trying to buy the dip on big panic sell-offs.

However, if the Nasdaq gets weak…the stock will need a catalyst to trade up.

#3 MGO Global Inc. (NASD: MGOL)

Lesson: The Market Isn’t Exact

Lionel Messi made his MLS debut last Friday…

And while there are plenty of stock angles like Adidas and Apple…the one I’ve been focused on has been MGOL.

But the stock hasn’t really done much.

Is it a delayed reaction?

Is something broken with the stock?

It’s hard to say, but we’ll know a lot more today after everyone digests his first game.

Source: StocksToTrade

#4 Knightscope Inc. (NASD: KSCP)

Lesson: Don’t Get Too Cocky 

Let’s be real…

The ticker symbol KSCP isn’t exactly a blue chip…nor will it likely ever be.

However, it has gone from $0.66 to a high of $2.34.

I don’t think the fundamentals have changed to provoke such a move higher.

And the move is likely induced by aggressive short sellers.

Source: StocksToTrade

That said, this isn’t a stock I want to be holding for too long.

What I mean by that, is I’m looking to get in and out. Hopefully for a quick profit, but if not, I will cut losses quickly.

Again, I’ll be looking to play this on huge panic sell-offs.

 

#5 PSQ Holdings (NYSE: PSQH)

Lesson: I’d Rather Get Out Too Soon Than Overstay

This stock has gone from $12.72 to as high as $35.57.

I was in pretty early on in the move…

But with a lot of action still choppy…I’ve been very quick with my exits.

Of course, in hindsight, I should have held.

But as traders, we often think about the ones we should have held and dismiss the ones we got out early on and saved a bunch of money.

For me, getting out soon has made me millions. So, the results speak for themselves.

Source: StocksToTrade

Anyways, there are a few “anti-woke” stocks starting to move, including DWAC and RUM.

If I do play them, it will be on panic sell-offs near the open.

My Hot Take

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The market is now OVEREXTENDED.

That’s why we are now starting to see a lot of plays breakdown.

And that’s why I believe it’s better to be safe than to be greedy.

Try to aim for singles and doubles.

That’s what I’ve done to get some of my best results of the year thus far.

If you’d like to get more trade ideas from me it’s easy…

CLICK HERE TO GET PUT ON MY SPECIAL LIST


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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”