timothy sykes logo

Trading Lessons

How Does Geopolitical News Impact Penny Stocks?

Timothy SykesAvatar
Written by Timothy Sykes
Updated 10/11/2023 6 min read

The recent Hamas attacks on Israel have shaken the world, raising concerns about innocent lives and global stability.

While these events are deeply distressing, they also trigger financial repercussions.

Oil futures surged after the news, leading to significant gains for companies like Northrop Grumman and RTX Corp and energy giants like Hess Corp, ConocoPhillips, and Exxon Mobil.

Believe it or not, those moves paled in comparison to what happened with some penny stocks.

I’ll show you how I traded the geopolitical headlines, and why I believe there’ll be more opportunities like it.

Not All Headlines Move Penny Stocks

tim sykes reading newspaper
© Millionaire Media, LLC

The market has been absorbing inflation data, job numbers, and interest rates for the last few weeks.

And while those impact the overall economy and large-cap stocks…they didn’t offer much opportunity for penny stock traders.

However, the devastating Hamas attack on Israel has major implications for politics and the stock market, including small-cap penny stocks.

What Penny Stock Traders Were Watching Yesterday

© Millionaire Media, LLC

Stocks like NOC, HES, COP, and RTX were up between 4% to 11% on Monday.

We tend to see a spike in defense and energy names whenever there are geopolitical tensions.

But what most people don’t know is we see a similar thing with penny stocks.

For example, one of the biggest movers yesterday was the ticker HUBC.

HUBC is a low-float Israeli security stock.

Given the headlines, it was a prime candidate for a big move.

And the StocksToTrade Breaking News Team was all over it:

I tried to trade it myself. However, I did not make any money on it. That said, I was happy to hear that some of my students did very well on it.

I also traded another low-float Israeli video surveillance and drone company. You can read about how I traded it here. 

Putting Yourself In A Position To Win

sykes sliding scale
© Millionaire Media, LLC

One of the first things you want to do is assemble a list of names.

For example, here’s a list of tickers in the Israeli security and defense sector: CGNT, HUBC, ESLT, SNT, PRZO, and ALLT.

Then you want to pay attention to the stock volume.

You want to trade the most actively traded stocks.

Why?

A couple reasons…

First, liquidity. You want to be able to get in and out without much slippage.

Second, it’s likely going to draw in short sellers.

Short sellers are also interested in the biggest movers as well. The more a stock spikes, the more likely they will feel the move is undeserved and the more they’ll short it.

Now, that you’ve got an idea of what to look for and why…get a second pair of eyes to help you.

For me, that’s the StocksToTrade Breaking News Team

They are watching the market for me in real time and pointing out the most actionable catalysts and price action moves.

That, alone, makes them an invaluable tool for me.

If you haven’t tried them out yet, here’s your chance. 

 

Are You Ready to Decode the Impact of Geopolitical Events on Penny Stocks? 📈

jack kellogg and sykes in italy
© Millionaire Media, LLC

Global events like the distressing Hamas attacks on Israel don’t just create headlines; they ripple through financial markets. While giants like Northrop Grumman and Exxon Mobil experience shifts, there’s a hidden world of penny stocks reacting even more dramatically.

Sometimes, these reactions are so profound, they overshadow the movements of the big players.

🔥 Geopolitical tensions can catalyze incredible penny stock opportunities as defense, energy, and region-specific stocks react.

🔥 Knowing which penny stocks to watch and when to act is crucial, especially in a volatile atmosphere.

🚀 Dive into our upcoming live training and discover how to navigate these market reactions.

🚀 Learn the strategies I employ to trade geopolitical headlines effectively.

🚀 Get insights into real-time penny stock movements and the key indicators that can set you on the path to success.

You can turn global news into profitable trading opportunities with the right tools and guidance. Equip yourself with the knowledge to stay ahead, no matter the headlines.

Master the intricate dance of penny stocks in a geopolitically charged market.

👉 CLICK HERE TO SECURE YOUR SPOT IN THE LIVE TRAINING! 👈

Post image

Get my weekly watchlist, free

Sign up to jump start your trading education!


How much has this post helped you?



Leave a reply

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”