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Trading Lessons

How To Trade These Stocks

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Written by Timothy Sykes
Reviewed by Jack Kellogg Fact-checked by Ben Sturgill
Updated 8/27/2024 5 min read

Everyday we’re focused on the hottest stocks in the market.

Stocks like Asset Entities Inc. (NASDAQ: ASST) … This low-float media company spiked 110%* on Monday this week.

And it offered a few different opportunities for traders to profit!

Notice, I mentioned that the stock has a low float. That’s important.

My students and I have a specific trading process. We’re not trading random stocks on a whim …

Here’s why we like stocks with a low float:

The low supply of shares helps prices spike higher when demand increases. It essentially ensures a certain degree of volatility. And as traders, we need that volatility to profit.

ASST was one of the most obvious trade opportunities on Monday because of its low supply of shares. In our niche, we like to trade stocks that have 10 million shares or fewer.

StocksToTrade showed that ASST only had 855k shares in the float … That’s tiny!

And it’s one of the main reasons the stock spiked 110%*.

Some of my students were ready for this setup … With enough experience, a trader can recognize the most popular patterns as they develop.

One of my students, Joshua, was in the freaking hospital when he traded this stock 🤣.

See his post below:

Source

Get well soon Joshua!!

Take it easy when you’re supposed to be resting.

But at the same time, this is a great example of the versatility and opportunity we can enjoy as traders.

I’ll show you the opportunities on ASST from yesterday to help you capitalize on plays today and the rest of the week.

These patterns don’t change, we just apply them to new spikers:

Trade Opportunities

I traded this stock early, during premarket.

My notes are below:

Source: Profit.ly

There were also opportunities to trade this stock after the market opened at 9:30 A.M. Eastern.

It all depends on when you’re watching the stock and where it is within the overall framework.

I dip bought the price action after the initial spike, take a look at the chart below:

ASST chart intraday, 1-minute candles Source: StocksToTrade

But there were at least two other SOLID trade setups after the market opened …

Take a look at the chart below detailing both of those trades:

ASST chart intraday, 1-minute candles Source: StocksToTrade

Plus, I have an AI trading bot that tracks all of these setups!

In 2024, you don’t need a ton of experience to follow along …

Enter your favorite ticker into the AI and it will spit out a trade plan as if you asked me directly!

The Next Runner

© Millionaire Media, LLC

There will be more opportunities this week to profit off of stocks that follow the same patterns as ASST.

It’s possible that we see more opportunities on ASST … But I’d rather look for a stock with a more credible catalyst. ASST is a short squeeze.

The company was at risk of delisting from the Nasdaq due to unmet listing requirements. Short sellers piled in, and when some of them bought to cover, it created a tidal wave of short sellers blowing up.

There are a lot of different catalysts that can cause stocks to spike. For example, some other spikers from yesterday:

  • Prestige Wealth Inc. (NASDAQ: PWM) spiked 130%* after announcing an AI acquisition.
  • Mullen Automotive Inc. (NASDAQ: MULN) spiked 70% after announcing a new $210 million contract for its EV vans.

Until you gain enough experience to notice these catalysts on your own, stick with me! I’ll point them out.

See my post on X below:

My students and I are always discussing the hottest stocks in the Challenge chatroom.

>> Apply to join my Challenge today! <<

It’s where all my millionaire students come from.

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”