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Patterns To Watch

How To Trade These Stocks …

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Written by Timothy Sykes
Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs
Updated 9/24/2024 5 min read

Welcome traders,

Today we’re exploring a few of my most recent trades.

These patterns work on the hottest stocks right now!

Pay attention, and take notes. This could be the piece of the puzzle you’ve needed. The “aha” moment you’ve been waiting for!

Let’s get right down to business:

On Monday, September 23, we got a trade alert from our Breaking News system that stated Kaival Brands Innovations Group Inc. (NASDAQ: KAVL) entered into a merger agreement with Delta Corp. Holdings Ltd., a fast growing logistics company.

Mergers are often bullish catalysts because two companies combined are worth more than either alone.

Take a look at the trade alert overlaid on the KAVL chart below. Every candle represents one trading minute:

KAVL chart intraday, 1-minute candles Source: StocksToTrade

Get the next Breaking News trade alert!

My first trade notification was at 9:07 A.M. Eastern, only 5 minutes after the initial alert.

I wouldn’t have found my first profit opportunity if it weren’t for Breaking News. I can’t stress this enough, the Breaking News system helps traders show up on time for these plays.

Take a look at my trade notes below:

Source: Profit.ly

Here’s what it looks like on the chart, every candle represents one minute:

KAVL chart intraday, 1-minute candles Source: StocksToTrade

Basically, I bought a momentary dip at the very beginning of a volatile spike.

Then, I held shares until the price ran into resistance around a significant price level, in this case it was $1.40.

Let’s move to my next trade …

I Took A Small Loss

© Millionaire Media, LLC

This is the most important aspect of today’s blog post.

The ultimate goal is to make money while trading.

But if you can’t keep the money … It doesn’t matter how much you make.

That’s why my #1 rule is to cut losses quickly!

We’re trading volatile stocks … There’s no telling when the price could fall apart.  Don’t get married to your positions.

Besides, you can always cut the loss and get back in later.

Let’s look at a solid loss I took on KAVL:

Source: Profit,ly

Here’s my trade on the chart:

KAVL chart intraday, 1-minute candles Source: StocksToTrade

I bought shares on a dip around an area that looked like it had support, $1.60. When the price fell lower, I quickly cut the trade.

No second guessing. I followed the rules and protected my earlier gains.

And now for my third trade:

Another Profit

© Millionaire Media, LLC

Patience, patience, patience …

There will be another profit opportunity right around the corner.

Don’t let a ‘good loss’ dissuade you from the next opportunity.

I took a loss on KAVL, but I got right back on the horse and buried the loss under more profits.

Take a look at my notes below:

Source: Profit.ly

Here it is on the chart:

KAVL chart intraday, 1-minute candles Source: StocksToTrade

The price dropped to a level that I thought could show some support, $1.40. Then I bought shares and waited for the price to push higher.

It seems like a simple pattern, but hindsight is 20/20.

It’s not always as easy for new traders, especially because there’s real money involved. The prospect of making or losing money can provoke a lot of emotions that lead to poor trades.

>> Use my AI trading bot to build smart positions on the hottest stocks <<

The AI follows my exact patterns!

Get familiar, there will be more trade opportunities this week.

Cheers.

 

*Past performance does not indicate future results

 


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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”