timothy sykes logo

Trading Tips-Tim Sykes Penny Stock

Buy Runners the Right Way

Timothy SykesAvatar
Written by Timothy Sykes
Updated 11/1/2022 6 min read

Don’t you wish you bought that stock up 200% the day before?

As my friend used to tell me, you can wish in one hand and… well, you know how the saying goes.

I can’t tell you when a stock is about to take off.

But I CAN help you trade ones going Supernova because let’s face it…

Nothing beats a Supernova!

When I first discovered the pattern, it blew my mind.

I watched shares of some no-name penny stock again soar into the stratosphere and crash back to Earth.

To this day, I’m still amazed when I see this pattern show up in a stock like Q BioMed Inc. (OTC: QBIO).

Traders that follow my 7-Step Penny Stock Framework know EXACTLY what to expect from these patterns.

Buying into runners on the front-side of a Supernova is risky, but not impossible.

And when done correctly, it can lead to some serious windfalls.

I want to give you some tips to help you learn how to manage these setups to give yourself a chance to run with the bulls.

Screen for Movers

Every day, I log into my StocksToTrade platform and run a screener for stocks with big gains.

I love how easy it is to create custom queries that pull in all the information I need.

And best of all, it runs continuously and with premarket data. So, when Breaking News hits, I can see when the stock moves and why.

OTC stocks are an exception. They rarely trade in the pre or post markets. However, they will show up throughout the day if the screener is left running.

So, I capture them in another scan I run at the end of each day for big gainers on heavy volume.

That’s why it’s uncommon I’ll catch an OTC stock on its first day.

Typically, I grab those on the third day.

Wait for the Break

trading patterns types
© Millionaire Media, LLC

Let’s say I’m lucky enough to find a stock that’s either a multi-day runner or has the potential.

Ideally, the stock creates a clean level that should push shares higher if it breaks.

Here’s a great example with Global Tech Industries Group Inc. (OTC: GTII).

After almost a week of moving higher, shares put in a top early on the 27th of September.

The white line extends that high forward.

The following day, when shares broke through that high, they popped for another gain of around 9%.

Let’s say you wanted to get even friskier.

Another option is to wait for a break of the day’s high and target a recent high in the stock.

Here’s an example with Meta Materials (OTC: MMTLP).

With the stock practically running every day, I could use a break from the early morning high to target the high from the prior day.

Risk Management

© Millionaire Media, LLC

Now, the key to making this, or really any trade work, is risk management.

Any trade I take should include the following:

  • Pattern – Like Supernovas
  • Strategy – Buying breaks or morning panic dip buys
  • Entry Trigger – What gets me into the trade
  • Stop Loss – Where or why I would dump the trade
  • Profit Target – Where I start to lock in profits

Each of these needs to happen in order with the exception of the last two. Those need to happen simultaneously.

I cannot select the right strategy without a pattern. The pattern tells me what to expect based on where I am.

Once I have the strategy, then I can identify potential entry points.

After that, I define my profit target and stop loss.

My students and I have been successful over the years because we keep our losses small and fast.

You see, most people focus on the profits first.

That’s the wrong way to think about things.

I never trust any of these stocks and assume they’ll fail.

So, I want my entries to be as close to my stop as possible.

If the setup works the way I want, I’ll get a large enough move that my profits should be multiples of what I might lose.

That’s why, if you look at my trades, you’ll notice that most of my losses are quite small.

A runner can turn around at any moment.

I need to ensure I protect against that at all costs, even if it means I lose small and often.

On the flip side, if I manage my losses, then the winners more than make up the difference.

Let me leave you with this thought.

I can lose 75% of my trades. But if each trade I lose is only $1, I make money overall if that one winner in four is more than $4.


How much has this post helped you?

Leave a reply

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”