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Trading Tips-Tim Sykes Penny Stock

Breaking News For Quick Profits – $VLCN

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Written by Timothy Sykes
Updated 7/12/2022 6 min read

Breaking News stocks can jump 50%…100%…even 200% in a matter of minutes.

I used to worry about missing out on these runs since I didn’t have the deep pockets like Wall Street funds.

But, I knew how valuable this info was.

That’s why we created the Breaking News team through our StocksToTrade Platform.

We made sure to deliver the same level of timely, actionable information that big money managers have.

I can’t tell you how many times I’ve found stellar setups from their feed.

For example, right out of the gate on Monday, these guys delivered a fantastic win for my Millionaire Challenge.

While I only caught a portion of the trade, I still managed to walk away with almost 10% in a matter of minutes.

I know that some traders struggle to understand how to trade the news. They don’t know which ones are trade worthy and which are garbage.

So, let me walk you through this trade and show you how I interpreted the news and then created my trading plan.

Once you understand the process, you’ll be able to recreate these setups on your own.

Dissecting Headlines

tim sykes reading newspaper
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Whenever I read I headline I ask myself a few questions:

  • Is this news actually new or a repeat of a previous headline?
      • Promoters love to rehash headlines to artificially pump up share prices. Look out for headlines that reestablish known facts like prior filings with the SEC.
  • Does the information materially change the outlook for the company?
      • There’s a big difference between a pharmaceutical company that receives FDA authorization to sell its drugs and a CEO speaking at a conference. The former is guaranteed to impact the company’s profits while the latter is pretty useless.
  • Is it a hot sector?
      • Aside from pharmaceutical stocks, popular sectors and timely stories tend to receive more attention and buyers. A great example is Evofem Biosciences Inc. (NASDAQ: EVFM) which popped the following week after the Supreme Court overturned Roe v. Wade.
  • When did the news come out?
    • I’m usually suspect of news that comes out at 8:30 a.m. ESastern. I see a lot of companies drop announcements at that time, often buried amongst the other data releases. That doesn’t mean I ignore it entirely, but I’m extra cautious.

You may have a different process to review headlines.

Splitting my work up between the premarket and regular sessions helps me work through the day at a steady pace without feeling rushed.

I note and tick off all the headlines and stocks moving in the premarket.

Then, I separate out any new headlines that come through after the open.

Our Breaking News Team does a great job of highlighting the stories and providing links to the information sources in case I want to review them further.

Click here to start your trial

Volcon Inc. (NASDAQ: VLCN)

Our news alert came out about 15 minutes before the official press release, giving me a jump on the story.

The SEC filing detailed the company’s pre-orders at a whopping $70 million, a huge amount for such a small electric vehicle company.

Right now, we’re seeing a shakeout in this sector. Those who don’t have orders to build for likely won’t survive. So pre-orders of this magnitude are a big deal.

Now, let’s look at the chart.

On the one-minute chart, the first big green candle happened right as the SEC filing landed, hence the pickup in volume.

After that first spike, I waited until shares steadied for a few minutes.

Once I saw volume increase and price start heading for the high of the day, I bought in at a price of $1.85.

From there, I rode the stock up to a price resistance level I identified at $2.00.

So, when shares popped through that spot on heavy volume, I took the opportunity to sell into that strength and lock in my profits at $2.02.

That prior resistance came from a look at the daily chart where you can see the stock selloff from just below $2.00 ($1.95 to be exact) a couple of weeks ago.

But there was also another reason I took profits there.

At the time, the broader market was selling off and feeling a bit heavy.

I figured that selling pressure might spill over, so I went ahead and locked in profits.

Now, I could’ve taken most of the trade off and left a trailer to try for more with a stop at breakeven.

That’s up to each individual trader.

The Bottom Line

top penny stocks list Tim Sykes on a cliff in Italy with a laptop
© Millionaire Media, LLC

The right news at the right time delivers some of the best setups out there.

I encourage my students to read through the headlines and analyze the charts even if they don’t trade them.

This helps them practice the process and become automatic cash machines.

However, that all starts with the first step.

Join my millionaire challenge and start your journey.

Click here to learn more.

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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”