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The 4 Essential Catalysts Every Day Trader Must Know

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Written by Timothy Sykes
Updated 10/27/2023 7 min read

I’ve amassed over $7.5 million in profits throughout my trading career, primarily from day-trading penny stocks.

It’s an area of trading where a 5-10% profit isn’t a yearly aspiration but a daily target.

To an outsider or a traditional investor, such gains might seem absurd.

But it’s not uncommon for some penny stocks to move 50%, 100%, or even 200% in a single day.

So, what fuels these wild rides?

The answer is catalyst.

To truly master the art of penny stock trading and tap into its immense potential, you need to understand the driving forces behind these explosive moves.

I’ll show you the top 4 catalysts and how they can impact your trading.

Before We Get Started

Catalysts are events or factors that cause a significant change in the price or value of a stock.

It is important for traders to stay updated on various catalysts that can impact stocks. I use the StocksToTrade Breaking News Chat to stay ahead of what’s moving stocks and why.

Below you’ll find the top four catalysts I like trading…

#1 Legitimizer News

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This occurs when a small-cap company announces a partnership with a large-cap, reputable firm or government agency.

For example, I bought shares of the ticker symbol OTLY earlier in March when the company announced it was expanding its partnership with McDonald’s in Australia.

The fact that OTLY was attaching itself to the world’s largest restaurant chain made it a buy for me.

I was able to make a quick 3.56% profit from the news on an initial stake of $11,950.

Watch for legitimizer news, especially in the tech and biotech space…they don’t occur often…but when they do…they’re probably my favorite catalysts to trade.

#2 Product Approval or Positive Clinical Trial Results

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This is especially relevant in the biotech and pharma space.

A positive clinical trial result or receiving approvals from bodies like the FDA can act as a major catalyst.

Such news often results in heightened investor interest, indicating the company’s potential for future revenue generation and growth.

For example, the ticker symbol ICU surged last week after the FDA granted the company’s cytopheretic device breakthrough device designation for Hepatorenal Syndrome.

The stock surged by 87% after the StocksToTrade Breaking News alerted subscribers.

The ICU news occurred an hour before the market opened. I typically wait till the market opens and then look to get in if the stock sells off.

Panic dip buying is just my preference…I know several traders who do well by buying the stock as the news hits.

#3 Celebrity or Influencer Endorsement

mike tyson fight fist with kyle williams
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One stock I’ve had a lot of fun trading over the years has been the ticker symbol BILZF. The stock is in the cannabis space and has ties to the influencer Dan Blizerian.

On Jan 19, 2021, I bought shares of BILZF because Dan posted about the company’s earnings results on his millions of followers on his Instagram story.

The idea was simple: his followers would see the post and react positively towards it.

I was able to make a massive 32.5% profit on the trade on an initial stake of $20,335.

These aren’t as common as some other catalysts…but they can make for some pretty awesome trades when they occur.

#4 Earnings Winners

bohen and nasdaq
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While companies like Apple have dozens of Wall Street analysts covering the stock…there are few to none that watch penny stocks.

And because of that, earnings releases in small caps can be magnified.

I typically like to play these by buying stocks with positive results when their stock price dips.

For example, this trade back in May in the ticker symbol FUBO. 

I categorize an earnings winner as a company that reports earnings that exceed Wall Street’s expectations.

They will typically surge post-announcement…but I’ll wait for a dip buying opportunity.

(Bonus) #5 Insider Transactions

If executives or other insiders buy shares in their own company, it can be seen as a vote of confidence in the company’s future.

On the other hand, insider selling, especially in large amounts, can be a red flag.

Mastering the Catalysts That Fuel Penny Stocks 🚀

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When penny stocks explode, there’s always a reason. Behind every surge, there’s a catalyst that propels it. I’ve identified and traded based on these catalysts, amassing $7.5 million in profits.

Do you know which catalysts can send a stock soaring 200% in one day? Are you leveraging these triggers to maximize your trades?

🌟 From the undeniable power of ‘Legitimizer News’ to the pull of celebrity endorsements, these catalysts are game-changers in the world of day-trading.

🌟 While some catalysts are evident, others, like unexpected earnings winners, might catch you off guard unless you’re in the know.

The penny stock world is packed with potential, but it’s also riddled with pitfalls. So, how do you capitalize on the right catalysts and avoid the traps?

Join Our Upcoming Live Training!

🔍 Dive deep into the world of penny stock catalysts and refine your trading strategies.

🔍 Learn firsthand how to identify and react to the top catalysts in real-time.

🔍 Discover the secrets behind my most successful trades and avoid the common mistakes that hold traders back.

🔍 See live demonstrations and real-time analysis, unlocking the mystery behind explosive stock moves.

Don’t get left behind in a market that waits for no one.

Your roadmap to navigate the penny stock landscape is here.

Are you ready to be at the forefront of the next big move?

📈 Secure Your Seat and Elevate Your Trading Game!


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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

* 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”