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Trading Tips-Tim Sykes Penny Stock

Is the Tide Turning For Stocks?

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Written by Timothy Sykes
Updated 6/8/2022 5 min read

You can’t see me right now, but I’m bouncing up and down in my chair.

Not because I crossed $7.4 million in total trading profits…

Although it is an incredible milestone…

You see, I treat the markets like the French justice system — guilty until proven innocent.

I want markets to show me better setups, not once, not twice, but dozens of times before I’m willing to risk more money in my trades.

I’ve harvested almost $75,000 in profits year-to-date, mainly by picking up a couple hundred dollars here and there from small trades.

The ONLY reason I would start risking more on plays is because the market is telling me it’s the right time to.

So what has me believing now is the time to start throwing more chips at the table?

Bottoming Signals

Even though I trade penny stocks, I always keep an eye on the broader market, especially risk indexes like the Invesco QQQ Trust (NASDAQ: QQQ).

Lately, it, along with the other major indexes has begun to put in signs of a bottom, at least temporarily.

In the daily chart of the QQQ below, you can see that price pushed well past the support level initially. However, stocks managed to rally and recapture that support.

Now, they’re trading in a pretty bullish consolidation that exhibits decent strength.

If I had it my way, I’d prefer that markets plunge and drive out a lot more of the waste that’s built up.

But this isn’t Burger King, so I take what I can get.

Penny Stocks Showing Signs of Life

In early 2021, I wouldn’t mind holding a runner overnight. After an initial day one push, promoters would step in overnight and pump up the stock, giving it an overnight bounce that would last into the second day.

For a long while now, that hasn’t happened. The number of true runners has been few and far between.

Lately, I’ve seen that begin to change.

Tim Bohen called out AeroClean Technologies Inc. (NASDAQ: AERC) several times as this stock produced some epic multi-day runs.

Stocks that I’ve kept on my watchlist like Houston American Energy Corp. (AMEX: HUSA) have seen multiple runs that nearly tripled the price of the stock in a matter of weeks.

This is more indicative of what early 2021 was like.

2022 has been more about one-and-done stocks, those that spike and fail.

So if this is really the turnabout, then I may begin to add size appropriately.

But there is one important thing to remember…

Ease Into It

Successful traders build profits over time.

None of my millionaire students, whether it be Roland Wolf, Jack Kellogg, or others, hit that milestone overnight.

Nearly all of them take years to get to that point.

Patience is the key.

That’s why I’m testing the waters with my trades, using small positions to observe the market and see how different sectors operate, which stocks are running, and how the overall market plays into that.

More importantly, I’m keeping my losses small and fast.

Far too many traders get caught in a position where they rationalize away their stops.

Pretty soon, they find themselves holding a day trade overnight.

That’s why no matter how much my risk changes, I will ALWAYS focus on losing small and fast.

It’s the only way I know of that consistently improves my students’ performance quickly and easily.

This becomes especially important when I increase my size. It’s all too easy to hit a handful of wins and suddenly have that one big loss that sets you back.

A Pattern For Explosive Potential

If markets are about to start offering up those juicy opportunities again — multi-day runners — then you need to check out my Supernova pattern.

This pattern has led to some of my greatest trades over my career.

And it’s a fantastic starting place for new and experienced traders.

Click here to learn more about my Supernova Pattern.


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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

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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”