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What Traders Need to Know About Energy Plays Right Now

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Written by Timothy Sykes
Updated 3/10/2022 8 min read

Energy plays have been hot lately due to the unfortunate Russia-Ukraine war. I hope this ends peacefully soon. It’s devastating to watch unfold.

But as day traders, we follow the volatility. Right now, we’re seeing plenty of that in oil and gas stocks.

And no matter how hot the sector, if you don’t have a plan, you could lose BIG.

I’ve seen many traders trading the energy sector blindly, expecting massive runs. Instead, they find themselves holding and hoping in losing trades.

Don’t let that happen to you. 

I want to share with you the latest strategies I’ve been implementing to trade energy stocks and how you can incorporate them to make smarter trades. Plus, I want you to know which tools I use to find the best plays.

Keep reading…

Lessons From a Russian Oil Play

The news is scary right now. So is this stock chart:

LUKOY chart: 1-year, hold & hope is not a strategy (Source: StocksToTrade.com)

This stock looks like it jumped off a cliff. It dropped from over $90 per share to less than $5 per share in a matter of weeks.

This can happen to stocks, even if they’re in a hot sector. Let me explain…

What Happened With LUKOY

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Russia-based PJSC Lukoil is one of the largest oil companies in the world. It trades in the U.S. as LUKOY — an OTC Pink Limited Information ADR. ADR stands for American Depository Receipt. It’s how some foreign companies trade U.S. markets. (The ‘Y’ at the end of the ticker gives it away.)

Considering the war in Ukraine and the West’s response, it’s no surprise that the stock’s down.

But this isn’t a little dip. It’s HUGE…

LUKOY traded at $102.30 last October. As recently as February 10, it traded at almost $95 per share.

Right now, this Russian company is halted indefinitely. But just look at the ugly chart action on the 10-day chart leading up to the halt…

LUKOY chart: 10-day, dangers of holding and hoping (Source: StocksToTrade.com)

At one point before the halt, LUKOY went as low as $4.92 in the premarket. At the time of the halt, it was in the $6s.

Right now isn’t the best time to hold and hope with energy stocks. Here’s why…

Why I Didn’t Trade LUKOY

To be perfectly clear, LUKOY wasn’t even on my radar until the big crash. It’s not my favorite type of stock…

First, until a few days ago it was too high-priced for my taste.

Second, it’s an oil play.

I’m not the best at trading commodity-related stocks. That doesn’t mean you shouldn’t trade them. It means that after 20+ years as a trader, I respect what works best for me. You have to figure out what works best for you.

A ton of traders like my friend Tim Bohen of StocksToTrade have been all about oil stocks for MONTHS. And I even traded an oil play — MDM Permian Inc. (OTCPK: MDMP) — for a $396 win a couple of weeks back.

I’m not against trading plays in a hot sector — especially if I see them on my StocksToTrade scans or mentioned on STT’s Breaking News Chat.

But it’s gotta be the RIGHT play. I won’t hold and hope.

The point I’m trying to make is that there are lessons in the market every day. World news events often drive home some of the most basic lessons. Like this…

Hold & Hope Is NOT a Strategy

the bottom line outstanding shares
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Before any swing traders get upset with me…

I don’t have anything against swing trading. As a matter of fact, I used to take more swing trades. And I still take some even though it’s not my forte.

My pal Paul Scolardi has an incredible track record as a swing trader. The same goes for other top traders like Chuck Hughes and his 7-Day Snowball strategy.

But if this is NOT an anti-swing-trade rant … What is it?

It’s me urging you to proceed with caution and be willing to adapt.

Millions of new traders and investors came into the markets in the past two years…

Source: CNBC.com

According to the article, newbie investors’ appetite for short-term profits dropped from 44% in 2020 to 28% in 2021.

So not only did they start investing, they poured cash into the markets at an unprecedented rate…

Source: CNBC.com

Hilariously, the article quoted the chief market strategist at National Holdings who claimed: “There’s a certain amount of logic to the markets right now.” 

No there wasn’t. It was still in crazy over-hyped-bull-market mode.

Greed brought new traders into the game. Bubble hype turned them into investors

📈 “Stonks go up!”

🚀 “To the moon!”

💎🙌 “Diamond hands!” 

“Only the weak sell!”

They thought the entire market would just keep going. Even with the huge drop, promoters are STILL advocating a buy, hold, and hope strategy…

Source: Twitter (Usernames blurred to protect privacy)

Look, if the Russia-Ukraine war comes to an end soon, this energy stock could turn out to be a great play. But why take a chance? Especially now when there’s so much uncertainty.

There are other plays and other strategies working now.

What’s the point of all this?

If you want more lessons, more depth, and to give yourself the best chance in ANY market conditions…

Now’s the Time to Take the Bull by the Horns

The Bottom Line on E-Trade Day Trading
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Frankly, most people don’t have the dedication to pull off the promise of what traders like me can offer. I believe YOU are different.

If you’ve read this far, you’re already in the top 5% of serious students. It doesn’t matter what your favorite strategy is or if you’re profitable yet.

All that matters is YOU have made a decision to go deep, keep learning, and take your education as far as possible.

It all starts with you fully implementing what you’ve already started. Don’t hesitate. Now — today — is the time to dig into your studies.

Then, take it further. Learn as much as you can NOW while the market is scary. Maybe that means getting in Mark Croock’s Evolved Trader program.

Or maybe it means upgrading your StocksToTrade subscription with Breakouts & Breakdowns Chat.

Whatever you do, don’t hesitate.

Again, by reading this far you’re among the most dedicated readers I have. That tells me something about YOU.

You want to join the ranks of elite traders. You’re ready to escape the rat race, gain your freedom, and finally achieve all that you can.

Are you ready to go get it? Leave a comment and say, “I WILL NOT HOLD AND HOPE!”

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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

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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”