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Patterns To Watch

Why I’m rooting for a market crash!

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Written by Timothy Sykes
Updated 9/26/2022 5 min read

Hey, trader. Tim here.

Things are pretty dicey for the overall market.

The FED’s recent interest rate hike continues to drag prices down. We’re approaching year lows.

I think there’s a pretty good chance prices will fall off a cliff. Actually, I’m hoping for it. Take a look at my recent Tweet…

I’ve been in this niche a long time. Over 20 years. And in all that time I’ve learned a lot. Let me share some wisdom with you.

The best times to profit as a trader are when…

  • There’s an economic boom (this isn’t our environment right now…)
  • There’s a panic selloff (we’re toeing the line on this one. It could happen any day now)

In today’s letter, I’m going to explain how we identify a market panic. And I’ll share how I plan to profit off of it…

Let’s get into it…

How Will We Know?

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This is a pretty simple concept. It’ll be easy to teach.

Stocks like to bounce around between support and resistance lines. Oftentimes these imaginary lines occur at ‘psychologically significant’ numbers. Like 10, 20, 30, etc.

Every now and then, the price breaks through a line and explodes upwards or downwards.

By studying the large market indices, like the ones I mentioned in my Tweet, we can draw support and resistance lines that help us determine market sentiment. And whether or not prices are about to cross an especially significant level.

A lot like the level we’re hovering above right now.

Here’s a chart of the S&P 500 ETF Trust (NYSE: SPY) barely above $360…

SPY chart Source: StocksToTrade

And we can see the exact same level (but trying to hold $300) on the SPDR Dow Jones ETF Trust’s (NYSE: DIA) chart…

DIA chart Source: StocksToTrade

If the charts fall below that level … we’re in full panic mode.

How To Profit

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Recognizing the crash is pretty easy. Cashing in is where things get trickier.

First of all, surviving is key. Forget about profits for a second.

If you can control losses, profits come a lot more easily.

I made this video full of tips to stay alive during a market crash.

It’s only 15 minutes. Throw it on 1.5 speed and take notes.

I’ve survived countless market panics over the last 2 decades. These patterns repeat, and in the video I share exactly what I look for.

That brings me to my next point … the best pattern for a market crash. There are a lot of patterns out there, but there’s one I hold above all the rest.

I outlined the whole strategy for free in a blog post.

Here’s the link.

How To Profit Consistently

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We’re not going to be in a market crash forever.

Eventually prices will bottom out. Dip buyers will come in to scoop up shares for cheap. The economy will rebound.

And when that happens, my strategy is going to change. That’s how I’ve stayed profitable over the last two decades.

The reason why most newbies fail is because they find a system that works, and then they assume it will work forever.


I’ve been trading the same patterns all this time. But some are better during crashes, and some are better during spikes. It all depends on the current environment.

That’s why all my millionaire students come from the Challenge. Because they commit to learning the whole process. Not just what’s hot at the moment.

Want to take the same journey they did?

Click here to apply.

I look forward to hearing from you,

— Tim

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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

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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”