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Trading Lessons

Crazy Price Levels With $ACON

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Written by Timothy Sykes
Updated 4/28/2022 5 min read

Check out this chart of Acalrion Inc (ACON).

I had these areas identified before the stock started its run.

Where did they come from???

Am I a magician?


But this didn’t require any special training, just some inside knowledge I’m going to drop on you today.

Folks that completed my Challenge Program saw my alerts come across their desk for an entry at 11:45 a.m. EST.

I started picking up shares around $3.32, on top of the lowest price level on the chart.

In less than 10 minutes, I managed to exit the middle price level on the chart.

And wouldn’t you know it, the stock topped out at the third price level.

So just how did I come up with these lines?

It’s easier than you think.

Look for Swing Points

As fast as stocks rise, they can plummet.

Similarly, when they plunge, you can find some epic bounces.

When this happens it creates swing points.

We find these all the time in charts across different time frames.

Let’s take a look at the chart for ACON going back several days.

ACON chart

In one of the most active premarket sessions on April 25, shares of ACON spiked to hit a high of $4.01.

Then, they dropped down before spiking again to $3.61.

Finally, they made one last spike in the regular session to $3.27.

Guess what my entry into ACON was?


And my exit?


And where did the stock top out yesterday?


Now I’m going to let you in on a little secret.

Most traders ignore the premarket session. They focus entirely on the regular market.

That’s fine for big-cap stocks.

But for penny stocks, and especially ones that trade heavy volumes outside of regular hours, premarket analysis is a must.

Now, I will admit that learning how to identify the correct swing points can take some practice.

To do this, simply pull up charts that already ran or have begun to drop. Then trace back to the appropriate swing points.

Once you get good, start marking levels on your chart as a stock starts to take off or drop and see how you do.

Is it Support or Resistance?

Let’s go back to the first chart I posted.

I want you to notice a few things.

First, check out how the middle line didn’t provide much resistance on the way up. But, it did provide support on the way down.

Support and resistance lines aren’t absolute. They’re areas of high probability where price is likely to see a pause in its trend.

Similarly, the bottom level acted as support and resistance on the way up. On the way down, it only acted as resistance once the stock retraced after slicing through that price.

And we can see that the top line acted as resistance by stopping a serious run dead in its tracks.

Now, you’ve probably heard the saying what was once support becomes resistance and visa versa.

This is absolutely true.

Take that upper $4 line for example.

Pretend the stock had managed to bust through and get to $4.50.

If it spent any amount of time there and then retraced, there’s a good chance $4.00 would have acted as support.

You see, by taking out that price and holding over it for a period of time, you get short-sellers caught on the wrong side of the trade that suddenly gets squeezed, sending prices even higher.

In fact, this concept is one of the keys to trading guru Tim Bohen’s favorite chart patterns.

He frames many of his trades using a break of recent highs as a catalyst for long plays.

Swing points tell us a story. To read them, you need to look at their context.

  • Have these swing points been tested before?
  • Are they at new highs or lows?
  • Was there a lot of volume when these swing points formed?

Each of these pieces of information can help you analyze and decide what is likely to happen.

Final Thoughts

Can you use Fibonacci or other systems like Oracle on our StocksToTrade Platform?


In fact, I would encourage you to leverage several. That way, when they come up with the same price levels, you can have more confidence they’ll act as support and resistance.

Just don’t use so many indicators that you lose focus on what you’re trying to achieve.

Keep it simple and keep it robust.

— Tim

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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

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* 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”