timothy sykes logo

Trading Lessons

Is This The Easiest Catalyst Trade To Master?

Timothy SykesAvatar
Written by Timothy Sykes
Updated 6/2/2023 6 min read

AI chip designer Nvidia has generated nearly $26 billion in revenues over the last twelve months. In 2021 and 2022, it did nearly $27 billion.

Pretty stable right?

On the other hand, shares of Nvidia have been all over the place…

They’ve gone from a low of $108.13 to $419.38 in the last 52 weeks.

Pretty dramatic…especially considering the size of NVDA, a company worth about $1 trillion.

While Nvidia’s core business has changed much over the last five years…the narrative has changed.

And that’s why paying attention to trends and catalysts is essential to becoming a successful day trader.

If you look at the top movers each day…I’m talking about the stocks that are up 100%, 150%, and 200%, like UCAR yesterday…you’ll find nearly all of them are catalyst driven.

And today, I’m going to show you what I believe is the EASIEST catalyst trade to master, how to find this trade, and how it led to some of the biggest wins in my career.

Understanding Catalyst Trading

tim sykes and kyle williams on laptops
© Millionaire Media, LLC

Catalyst trades are centered around specific events or news that have the potential to impact the price of a stock.

These events can be anything from

  • Earnings releases
  • FDA approvals
  • Mergers and Acquisitions
  • Company-specific news
  • Geopolitical events
  • Court rulings
  • Industry-specific news
  • Basically, any new information that has the potential to move the stock.

By closely monitoring and identifying these catalysts, traders can position themselves to ride the waves of market movements and secure substantial profits.

Understanding the power of catalyst trades opens up opportunities for traders seeking to maximize their gains.

I know firsthand because I’ve made a career of trading Supernovas. 

Now that you’ve gotten a better feel for catalyst trading let’s take it a few steps further.

The Latest Trends and Catalysts That Are Working

© Millionaire Media, LLC

Unless you are new to the markets, you probably know that the biggest catalysts are centered around AI.

And that’s been the case ever since ChatGPT launched, an AI platform with the record for being the quickest to reach one million users…just five days!

But hot trends come and go…

For example, the buzz was all about crypto, NFTs, and blockchain last year.  It was “work from home” companies and EV stocks during the pandemic.

Sticking to a hot theme is where a lot of traders find opportunities.

But that isn’t always the case with me.

For example, AI, IDAI, MRAI, GFAI, CXAI, APLD, GSIT, VRSSF, and INOD are the top AI plays to watch…

But they are all terrifying to trade…

The choppiness makes it difficult for me to manage risk appropriately.

As I said…for some traders, this is where the potential gains lie…

However, there’s a much better catalyst trade, in my opinion…and it’s called “The Legitimizer.”

The Legitimizer In The Wild

One of the hottest movers yesterday was the ticker symbol WLDS.

That’s because the company announced it was commencing commercial manufacturing of the Mudra band for the Apple watch.

Source: Mudra-Band.com

So let’s break it down…

Just last week, WLDS was trading at $0.43…

By Thursday, it was trading as high as $2.36.

That’s good for a gain of 322% in one week!

Source: StockstoTrade 

WLDS has a market cap of $27.02 million which is tiny for a publicly traded company.

To put it in perspective, Apple CEO Tim Cook is set to make nearly $50 million in 2023.

The fact that this rinky-dink company can associate with a firm like Apple is super bullish.

In a way, it makes WLDS more credible and legitimate.

That’s why I call this type of catalyst the Legitimizer.

And I find it one of the easiest to play because it is so easy for people to understand.

Of course, these types of news headlines don’t occur daily…but they are with paying attention to…and jumping on…if you can catch them early.

How Legitimizer News Works

tim sykes reading newspaper
© Millionaire Media, LLC
  • Look for stocks that tie themselves to credible companies, celebrities, and government agencies.
  • Whenever these tiny companies can tie themselves to more credible sources, there’s a good chance they can pump higher.
  • The key is to be on top of the action early

I find plays like WLDS by having this platform on my computer. 

It’s helped me make a ton of money in the past…and I believe it will in the future.

The cool thing about it is that it’s very affordable. 

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”