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Patterns To Watch

My Take On All These Crazy Supernovas Right Now

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Written by Timothy Sykes
Updated 12/1/2023 9 min read

There’s a significant shift happening in the market right now and it’s transforming the way you should approach trading.

The eruption of Supernovas isn’t just a hot trend…

It was the cornerstone of how I built my wealth some twenty years ago…and one of the best ways someone with a small account can make giant leaps.

We’ve seen it in stocks like BDRX rising 251% over the weekend…

RDHL spiking by 294% in two days…

MINM exploded by 1201% in one day…

Along with VVOS which had an insane one day move going from $11.93 to $48.79.

I’m here to shed light on these occurrences and guide you through understanding and potentially capitalizing on these short squeeze Supernovas.

Unpacking the Short Squeeze Phenomenon

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Short squeezes have dominated the market narrative recently, causing stocks to skyrocket unexpectedly. Let’s dissect this phenomenon:

Overconfidence in Short Selling: Many traders shorting stocks believe they have the market figured out, basing their decisions on logic like “this stock is an obvious pump” or try to get nerdy by looking at stuff like dilution tracker saying “this company is almost of cash, they will have to do an offering very soon.”

And while these short sellers are often right…they are dead wrong on some of the most important factors that determine success.

Most Short Sellers Have Horrible Timing: Successful trading is not just about what but when.

No one knows for sure how high a stock will rip before it crashes back down. Look at VVOS last week, going from $12 to the high $40s…

You have to be a master at position sizing, risk management, and be laser focused not to get destroyed by being short these Supernovas.

And while there is a rare breed out there that can do it…it’s not a strategy I recommend for inexperienced traders.

Many short sellers fall prey to broken logic and stubbornness…leading to significant losses…and in some cases…career ending trades.

Lack of Risk Management: Effective risk management is crucial in trading, especially in short selling. The absence of this leads to catastrophic financial consequences.

Why We’re Seeing Supernovas like VVOS, RDHL, MINM, and So Many Others

Short Sellers Have A Herd Mentality: They all feel like they will be right and that they’re doing the world favors by attacking these crappy stocks. But the funny thing is that these short sellers have pumped stocks higher than any promoter ever could.

And while they may act like social justice warriors…the truth is many short sellers are being investigated for shady practices.

Catalyst Events Are Key Elements In Supernovas: Positive news such as earnings reports, regulatory updates, or social media influences can act as catalysts for these massive spikes.

Navigating the Supernova Landscape

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Don’t Overstay Your Welcome: In a market prone to sudden spikes, taking profits before they disappear is essential. Many of these stocks are crashing shortly after they have a massive spike. But I don’t care about that. I’m not an investor. I’m just trying to take advantage of a short-term move.

Staying Informed and Adaptable: Keeping up with market trends and understanding the psychology behind stock movements is key to staying ahead.

The Reality of Trading in Today’s Market

The trading industry, especially on social media platforms like Fintwit, often glorifies the endless grind of day trading. Many traders spend countless hours analyzing data, controlling emotions, and maintaining discipline.

Yet, the harsh reality is that the majority end up in a cycle of frustration and exhaustion. This constant battle, with few and far between rewards, leads many to question the essence of trading.

Trading as an Addiction vs. Strategic Approach

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For many, trading has become an addiction, a never-ending quest for adrenaline, often leading to enslavement by the market’s whims.

This is where the paradigm needs to shift. Trading random setups leads to random results. The key is not to get lost in the sea of trades but to strategically wait for those rare yet significant opportunities – the Supernovas.

Embracing the Supernova Strategy

Supernovas like VVOS, RDHL, and MINM exemplify the potential of trading less but focusing on solid setups.

It’s about recognizing the overconfidence and overcrowded nature of short sellers, understanding market sentiment, and seizing the moment. These are not everyday occurrences, but their impact can be life-changing.

Changing the Trading Lifestyle

My advice to traders stuck in the relentless grind is to rethink their approach. Consider studying and preparing more than trading. The Tim Sykes Challenge  Program is an excellent place to start, emphasizing education over constant trading.

It’s about quality over quantity, understanding the market dynamics, and not overtrading or overstaying in trades.

Life Beyond the Trading Desk

As a trader who has experienced significant gains (like my first $100,000 day in college) and traveled the world, I can attest that there’s more to life than being glued to a screen. Trading offers the freedom to explore, live, and make a difference – something I’ve been doing through projects like @karmagawa.

🌟 Are you ready to master the art of trading in today’s volatile market?

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📉 The landscape is changing rapidly, and Supernovas like BDRX, RDHL, and MINM are reshaping strategies. This isn’t just another market trend; it’s a phenomenon that could significantly impact your trading journey.

🔥 Discover how to navigate through the chaos of short squeezes and make the most of these explosive opportunities. Whether you’re a seasoned trader or just starting out, understanding these market shifts is crucial.

🚀 Join our upcoming live training session where we dive deep into the world of short squeeze Supernovas. Get firsthand insights on:

The mechanics behind massive spikes in stocks like VVOS.

Smart strategies to capitalize on these movements without getting burned.

How to avoid common pitfalls that many traders fall into.

📊 This isn’t about non-stop trading; it’s about strategic, informed decisions that can lead to significant gains. Learn to spot the signs, understand the market sentiment, and make moves that count.

💡 Plus, my team and I will be sharing our personal experiences and lessons learned from being in the trenches.

Get ready to transform your approach to trading and find a balance that allows for both profit and a fulfilling life beyond the screens.

🌐 Embrace a new perspective on trading with our comprehensive live session.

Don’t miss out on the chance to evolve your strategies and mindset in the ever-changing world of stock trading.

👉 Secure your spot in our next live training session and be part of a trading revolution! 

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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

* 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”