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Trading Recap

Do You Owe Me 575 Burpees?

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Written by Timothy Sykes
Updated 7/12/2023 5 min read

Not only do I push my students to be the best possible traders they can be…

There’s also a chance they get in tip-top shape.

You see, when you mess up, I don’t want you to berate yourself or drown in negative self-talk…

I demand you hit the floor and give me burpees.

Yesterday I heard something so silly…it required at least 575 burpees.

It all had to do with the crazy price action in the ticker symbol RXRX…which surged after the company announced a $50 million investment from Nvidia.

The 575 Burpees Mistake

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One of the most actively traded and biggest movers yesterday was the ticker symbol RXRX.

That’s because the company announced a collaboration and $50 million investment from Nvidia to accelerate its “groundbreaking” foundation models in AI-enabled discovery…

Now, if you’ve followed the market at all this year…then you know that Nvidia has been the hottest large-cap tech stock this year…

Many “experts” believe that its technology will play a significant role in the advancement of AI. And the company itself has boosted revenue projections moving forward.

Anytime a smaller company can associate itself with a larger, more established company, it legitimizes them.

That’s why I call the above news a LEGITIMIZER.

Naturally, the RXRX shares blasted higher in the pre-market.

Source: StocksToTrade

Shares went from a low of $6.68 on Tuesday to a high of $18.94 in the pre-market.

There were two ways to play this.

The first, was to buy it right when the headline came out.

If you have StocksToTrade Breaking News, you would have seen it immediately.

However, trading in the pre-market isn’t easy…and some traders would rather wait to see how the stock opens up before making a decision.

The second way to play it was to stay patient and wait for a dip…

The stock opened trading at $14.67 and spent the first-hour trading lower…

I saw an opportunity when it dipped at around $12ish…

I got in at $12.14 and quickly peeled out at $12.44…

It was kind of scary to be in it…that’s why I got in relatively small…and out quickly for a small profit.

One thing I saw circulating that made no sense was that traders were comparing CRBU to RXRX.

What Is A Sympathy Play?

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A sympathy play refers to a stock or stocks piggybacking off another stock’s momentum because they are in a similar sector or have similar characteristics.

The idea is that sympathy stocks will move in the same direction.

For example, in 2020 when one meme stock performed strongly it would lift the others…

The same was true in 2021 when crypto stocks took off. If one had bullish news…then it also caused the others to spike.

This works for bullish and bearish news.

Generally, the stock with the main news will be more volatile than the sympathy stocks.

Why RXRX and CBRU Were Different

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CBRU got positive news on July 6th, when it was announced that Pfizer bought a stake in the gene-editing company.

Shares also popped yesterday after an analyst gave it a $23 price target.

While the news in CBRU is also a legitimizer…

Its move isn’t related to RXRX.

As I said, CBRU is a gene editing company…while RXRX is a clinical-stage biotechnology company.

And if you thought their moves on Wednesday were related…

Well, you now owe me 575 burpees.

Last Note

If you’re reading this on Thursday and it’s before 2 PM ET…then I invite you to check out my live training today. 

If that doesn’t work for you, then there’s another live session coming shortly…check out the schedule for times right here. 

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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

* 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”