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Trading Recap

Three Takeaways From The GFAI Supernova

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Written by Timothy Sykes
Updated 4/4/2023 5 min read

If you looked up to see what the biggest stock mover was yesterday, you likely saw GuardForce Ai (NASD: GFAI) at the top of the leaderboard, rising by more than 170% from Friday’s close.

Imagine getting into this on Friday, before the monster run-up.

I actually did.

In fact, I alerted my weekend trader subscribers about this one, getting in at $6.60.

Anytime a stock doubles or even triples so quickly…it’s worth studying.

Here are my three big takeaways from this latest Supernova. 

Taking Advantage of A Hot Theme

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AI has been the hottest sector in 2023. It sort of fizzled for a few weeks when attention shifted toward the banking crisis. But now that the market is gaining momentum, the AI theme is back in play.

The three leaders lately have been ticker symbols AI, GFAI, and BBAI. 

When I say leaders, I’m referring to price action and nothing to do with the company’s fundamentals.

The reason why I liked GFAI on Friday was that it was closing relatively strongly. In addition, it was a laggard among the AI stocks.

If the AI theme were to continue, I felt that GFAI had some catching up to do. I often pick the laggard stock in a hot sector because they are safer plays.

Why GFAI Had Supernova Potential

There were several reasons to get excited about GFAI. 

  • The float was relatively low. There are roughly 1-1.5 million shares available.
  • The stock has a history of spiking. Its previous highs were above $23
  • After its February high of $23.60, the stock hit a low of $3.81 in March. This recent spike would likely bring in a lot of short-sellers.

The stock made a wild move in February and then spent several weeks giving it all back. That type of price action likely got the shorts excited.

The fact that GFAI spiked on Friday with no real news only helped add gasoline to the fire.

And likely what caused the stock to squeeze so hard on Monday.

Of course, I didn’t know it would run up so much. If I did, I wouldn’t have taken profits in the after-hours on Friday.

But I continue to trade conservatively. We haven’t experienced a lot of multi-day runners lately, so I figured it made sense to book my profits early and reevaluate on Monday.

And while acting conservatively sucks when you realize you left money on the table… it doesn’t suck when it’s helping you survive by cutting losses quickly.


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One of the main reasons why I didn’t hesitate to play GFAI on Friday despite its massive runup is because I did my homework.

I have seen the pattern play out countless times.

And that’s exactly what I want my students to do.

I tell them to study the watchlist and the trades and learn from them.

Go through my past trades and learn from my mistakes.

Check out my winning trades and determine what I did right.

Take a look at Jack Kellogg’s most recent trades and then go back to his earlier trades to see how his thought process has developed and matured.

When you’re reviewing trades, don’t forget to look at the variables that made the trade good, bad, or ugly.

The Trader Checklist Calculator can help you better understand what to pay attention to.

It allows you to comb through the important details one must consider before placing a trade.

Here’s a link to the Trader Checklist Calculator.

Practicing this exercise, you’ll start to develop a better understanding of what makes good trades.

No one knows when a stock is going to go Supernova.

All we can do is try to find plays with good risk vs. reward setups.

Keep studying. It might not seem fun now, but if the market picks up again, I think you’ll be happy you spent your time wisely.

If you want to learn more about how I trade Supernova’s, check this out.

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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”