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Trading Lessons

Focus On THIS Stock – And Others Like It

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Written by Timothy Sykes
Reviewed by Jack Kellogg Fact-checked by Ben Sturgill
Updated 9/10/2024 5 min read

My students and I are finding opportunities to trade DESPITE an overall sketchy market.

And the stock that we’re watching right now is poised to shoot higher

All the while, major indices like the S&P 500 ETF Trust (NYSE: SPY) are trading near September’s lows.

Take a look at the SPY chart below, every candle represents one trading day:

SPY chart multi-month, 1-day candles Source: StocksToTrade

We’re in a volatile overall market. But the sentiment isn’t consistently bullish.

That shows the benefit of trading in our small-cap sector:

We can take advantage of short-term price volatility without worrying about the larger-market sentiment.

For example, I traded yesterday’s biggest runner twice for a profit, and each trade only lasted a few minutes.

You don’t need to hold these shares very long when the price spikes like Bio-Key International Inc. (NASDAQ: BKYI) yesterday. The stock ran 210%* in less than 24 hours.

And traders who recognize my common patterns are free to take strategic gains.

  • We’re not as exposed to the overall market.
  • These positions are quick.
  • We have key entry and exit areas thanks to the trading patterns.

I’m not the only one trading BKYI right now … see some of my student’s posts on X below:

Source
Source

Not sure how to follow these patterns? Use my AI trading bot to build smart positions on the market’s hottest runners

Hurry up! We could see another HUGE trade opportunity from BKYI today …

Here’s Why:

© Millionaire Media, LLC

I’m always interested in the most volatile stocks that have bullish news.

I didn’t know BKYI was going to spike 210%* on Tuesday … Instead, I saw that it already spiked 110%* in premarket and I noticed that it had real news:

  • On Tuesday morning, we learned that BKYI was awarded $500k in new orders from one of the world’s leading defense ministries. The order’s are for BKYI’s biometric-identification system.

This is a government contract for an actual product. That’s big news for a tiny stock, previously trading just above $1 per share.

Plus, StocksToTrade shows that the float is only 1.6 million shares …

The low supply of shares in the float ensures BKYI’s volatility.

It’s a simple law of supply and demand … when there’s a low supply, the price will spike higher when demand increases. And anything below 10 million shares is considered a low float.

BKYI prices dipped after the initial spike on Tuesday, but the chart didn’t give back all of its gains. That’s a hint that there could be a follow-up bounce.

Take a look at BKYI’s move from Tuesday, September 10. Every candle represents one minute:

BKYI chart intraday, 1-minute candles Source: StocksToTrade

That consolidation into the afternoon is a great sign!

Stocks in our niche like to bounce between lines of support and resistance. The lines are created by past price action, and they usually occur around psychologically significant numbers, like whole numbers.

In the case of BKYI, we can see clear intraday consolidation around $2 … That’s also the level it spiked to during premarket.

These stock movements are NOT random!

Even if the price dips lower from here, we know that this stock likes to follow support and resistance. That makes it tradeable.

My students and I are using specific patterns to profit from these runners …

Two of my trades from BKYI are posted below. Take a look at my notes:

Source: Profit.ly

In 2024, it’s easier than ever to follow my trading patterns!

Over several months between 2023 and 2024, I was able to teach these patterns to an AI bot.

The patterns that I trade with are always the same. They repeat in the market. I switch from one hot stock to another, over and over again.

It was only a matter of time until the AI caught on …

>> Use AI To Track The Hottest Stocks That Follow My Patterns <<

There will be more opportunities to profit this week.

Especially this Friday

Cheers.

 

*Past performance does not indicate future results


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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

* 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”