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Trading Tips-Tim Sykes Penny Stock

How to Locate Stocks Primed to Run

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Written by Timothy Sykes
Updated 1/5/2023 7 min read

Right now, everyone on CNBC is talking about the January effect.

They parade pundits day after day – so-called ‘analysts’ who display pretty charts and make wild proclamations…

…Stocks are cheap…

…Tax loss selling is over…

…The Fed will cut rates…

These ‘experts’ are nothing more than glorified promoters.

One look at a chart of the S&P 500 should tell you everything you need to know.

Do you think this looks like it’s ready for a bull run?

I’m not going to try and forecast where the broader markets are headed in the near-term.

Instead, I’m focused on the one area EVERYONE continues to overlook…

Former Supernovas!

As I explained in THIS blog post, the January Effect isn’t necessarily about big cap names or broad-based buying.

It’s about stocks like Intelligent Living Group (NASDAQ: ILAG)

It’s about stocks like AMTD Digital Inc. (NYSE: HKD), one of the BIGGEST runners of 2022, climbing an eye-popping +12,000% from its IPO.

These are the names I’m locked in on.

My Millionaire Challenge students get my daily game plan, highlighting the stocks I’m watching that day.

But that’s just the end result of the training.

The main course is the ‘how’ and ‘why’ these stocks made my list.

I want to give you a peek behind the curtain and walk you through my process to identify and trade these stocks.

That way, you can prove to yourself just how powerful the Millionaire Challenge coursework really is.

See What I Traded

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Want to make things really easy on yourself?

All of my trades are posted here on Profitly.

You can see every stock, every trade, every P&L from my trading.

In 2022, I took over 400 trades.

But many of these happened on the same stocks.

Look at what the hottest ones were, the ones I trade the most, and put them on your list.

Study the 7-Step Penny Stock Framework

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A trader could find a lifetime of opportunities using my 7-Step Penny Stock Framework.

It’s the blueprint that walks you through the different phases of a penny stocks lifecycle.

But here’s the secret…

It works again and again!

Just because a stock went Supernova in the past doesn’t mean it won’t in the future.

In fact, those are the best stocks to look for in January.

This image can occur when a stock is $5 and when it’s $0.50.

In THIS blogpost, I run through an example of a former OTC runner that netted a tidy +$6,000 profit (my starting stakes were $23,712).

Keep Up With The News

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Now, I don’t want you to think that stocks just start popping off out of nowhere.

As with their original ramp, the majority of these stocks rely on a news catalyst to get them going.

From there, promoters take over and help drive shares higher.

Now, you could scour Twitter and try to track all this information.

We make it easy with our StocksToTrade Breaking News Chat Room.

I can’t tell you how much time this has saved me.

Rather than looking for the stocks and then backing into the news, the Breaking News team delivers the headlines along with the price action.

Click here to try out our Breaking News Chat room.

Quite simply, once I see a headline that catches my eye, I double check the stock’s chart history to verify it was a former Supernova.

That’s how I locked in on HKD for a couple of trades to start the new year.

Work Backwards

The best stocks to trade are multi-day runners.

So, I don’t need to catch the first day.

In fact, I prefer to wait until a stock has risen a decent amount before looking for breakout trades or morning panic dip buys.

That’s why I run a scan every day after the close or the following morning for stocks:

  • That gained +20%
  • Saw a large increase in volume
  • Are priced below $5.00

Our StocksToTrade Platform makes it easy to setup and screen for these parameters.

From there, I add stocks to my watchlist, only removing them if they fade back to their breakout areas.

Select the Appropriate Setup

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Once I’ve identified a stock, I watch the price action at the open.

That’s where I shine, taking trades like my morning panic dip buy.

What’s key here is that the pattern only creates the opportunity.

I still need the setup to form before I take a trade.

The more stocks that run, the more chances you’ll find a quality setup.

But remember, don’t force the trade.

Not all patterns lead to setups.

Wait for both to align before putting your hard-earned money to work.


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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”