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3 Powerful Forces That Drive Stocks

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Written by Timothy Sykes
Updated 9/28/2022 6 min read

Nature can teach us so much about markets. It’s all around us if we take the time to stop and listen.

I teach my students to work WITH markets, not against them.

Anyone who tried to force a setup or took a revenge trade knows what I’m talking about.

When we take the time to understand what really drives markets, it makes us unstoppable traders.

My trip through Switzerland took me to the beautiful countryside with luscious landscapes and nature-inspired architecture.

Walking through, what I can only describe as a dreamlike valley, I came upon a waterfall.

Pretty cool backdrop for my YouTube lesson.

Waterfalls are nothing short of beauty in motion powered by gravity and unwieldy amounts of water.

When we disrespect nature, we disrespect the power behind it.

The beauty and serenity of my Florida home create a vibrant, tropical paradise few other places on Earth can match.

Yet as a hurricane bares on the state, I’m reminded that we are players in nature, not the other way around.

Trading is no different.

We are players in the market, subject to its powerful forces.

But that doesn’t mean there’s nothing we can do.

3 powerful forces drive stocks no matter their size.

I’m going to explain what they are and, more importantly, HOW to use them to design consistent, profitable trades.

#1 Trends

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2021 was one of the best years for penny stock traders.

I made over $1 million, with many of my millionaire students performing exceptionally well.

Meme stocks created Supernovas left and right, making it easier than ever to find profitable trades.

Some markets are for earning, and some are for learning.

2021 was an earners market.

2022 has been a learning market.

Navigating the market route this year hasn’t been easy.

But if you followed the right trends at the right times, there were plenty of profitable setups.

Early in the year, oil and gas plays were huge, like Indonesia Energy Corp. Ltd.(AMEX: INDO).

Then we had MonkeyPox with names like SIGA Technologies (NASDAQ: SIGA).

Recently, IPOs have been the hot spot with AMTD Digital Inc. (NYSE: HKD) rising over 2,000% at one point.

Trends create pockets of opportunity if you know how to find them.

That’s where our next market drive comes in.

#2 News Catalysts

tim sykes reading newspaper
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With markets in a freefall, the Federal Reserve made a bold pronouncement – they would back credit markets with ‘whatever it takes.’

While the news took a few days to take hold, they stopped the epic 2020 stock plunge and sent them on a rocket ride that lasted another two years.

News and events are the single greatest catalyst that moves a stock or a market.

Nearly every trade I take starts with Breaking News.

You see how earnings move stocks all the time.

On penny stocks, and especially OTC stocks, the results are even bigger.

The chart below is just a sample of what our StocksToTrade Breaking News Team found.

Within a minute of the opening bell, the Breaking News Team highlighted a $1.9676 billion Federally Funded Mitigation Agreement for Western Sierra Resource Corp. (OTC: WSRC).

Over the next hour, shares nearly tripled on heavy volume.

With the right software and knowledge, anyone can find multiple possible setups every day, regardless of what the broader markets are doing.

That’s because news catalysts for individual equities, especially penny stocks, are incredibly powerful.

#3 Price Action

how to determine support
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Trends sets the stage.

News gives us the reason for the trade.

Price action validates our setup.

Price action is the change in price and volume relative to the recent trades.

For example, Acumen Pharmaceuticals Inc. (NASDAQ: ABOS) barely traded 200,000 shares per day. Then, Breaking News on Wednesday drew heavy buying with tens of millions of shares trading in a single day.

After the stock pulled back and found a low, huge buying volume stepped in, taking shares from the low of the day back up near the premarket highs.

The heavy volume and price movement confirmed the importance of the news story.

Not every news story is worthy of a trade. We have to investigate its value based on the price action.

Which News Works

Headlines are a must for traders.

But if you don’t know how to interpret them, you might as well be looking at a map in a foreign language.

That’s why my Millionaire Challenge coursework includes training materials to help you quickly identify and evaluate the news.

Seconds matter in this business.

Make sure you stay ahead of the field.

Take my Millionaire Challenge.


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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”