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How The Market Moves Amid Middle-East Tensions

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Written by Timothy Sykes
Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs
Updated 10/3/2024 7 min read

Welcome traders,

This isn’t anything new …

The stock market regularly reacts to major global events.

I’m sure everyone remembers the market crash when COVID-19 gripped the world. Between February and March, the S&P 500 ETF Trust (NYSE: SPY) fell 30%.

Take a look at the chart below, every candle represents one trading day …

SPY chart multi-month, 1-day candles Source: StocksToTrade

Theoretically, anyone who predicted this crash could have opened short positions to ride the momentum lower.

And on the other side, anyone who bought at the lows could have ridden prices back to the highs and beyond.

This is just one example of global factors drastically affecting both the stock market and profit opportunities for traders. It’s not always about NVIDIA Corporation (NASDAQ: NVDA) earnings … 

And when it comes to the escalating tensions in the Middle East over recent days, the resulting price action is nothing new.

In fact, the 9% profit that I pulled from Indonesia Energy Corporation Limited (AMEX: INDO) on Wednesday, October 3, I made that trade pretty late in the game. We’d already seen bullish momentum from this catalyst since October 1.

See? You don’t even have to be first to the move … You just have to pay attention and follow along.

War and Oil

Tim Sykes reviews his top penny stocks list for February 28, 2022
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We’ve already seen INDO react with volatility when tensions escalated in oil-dense areas of the world.

In February of 2022, Russia invaded Ukraine.

Russia is a global supplier of oil and gas, one of the biggest in the world.

The conflict put stress on trade ties between a lot of countries and resulted in the use of sanctions as a financial tactic of war.

Around the same time, INDO spiked 1,800%* over multiple days.

The chart is below, every candle represents one trading day:

INDO chart multi-month, 1-day candles Source: StocksToTrade

In our niche, past spikers can spike again.

It’s one of the reasons why I was interested in INDO when tensions in the Middle East rose this week …

Middle-East Tensions

U.S. intelligence alerted the possibility of an Iranian strike early on Tuesday, October 1.

That’s when INDO started to move, the price spiked 70% that day..

Take a look at the chart below, every candle represents one trading minute:

INDO chart intraday, 1-minute candles Source: StocksToTrade

We also saw the price of oil rise per barrel. That’s how we know this catalyst is bigger than just a price spike from INDO.

Take a look at the chart of WTI crude oil below:

Source

That night, Iran launched 180 ballistic missiles into Israel in response to Israel’s assassination of Hezbollah chief Hassan Nasrallah.

There weren’t any casualties reported from Iran’s strike. But Netanyahu vowed a response.

The next day, on Wednesday, October 2, INDO consolidated. That’s how I knew to keep it on my watchlist.

Volatile stocks that consolidate can spike higher.

Take a look at the price action of INDO below from Tuesday to Wednesday …

INDO chart multi-day, 1-minute candles Source: StocksToTrade

On Thursday, October 3, President Biden commented on the rising tensions and recent events overseas.

The POTUS mentioned that he was “discussing” with Israel the possibility of retaliatory strikes on Iran.

We got an alert with the details from Breaking News, and when INDO started to surge, I knew it was time to make a trade.

Take a look at my post on X below:

Here’s a chart of the spike with my trade overlaid:

INDO chart multi-day, 1-minute candles Source: StocksToTrade

These are not random trades.

More Breaking News

I’m following the price action and I’m waiting for the chart to match my trade pattern.

Trade Patterns

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The most volatile stocks in the market can follow a specific framework.

And within the framework there are multiple patterns that we can use to trade.

These patterns are based on human psychology, because people are predictable during times of high stress. Like when they’re caught up in the fear and greed of the market.

On INDO, I was trading a breakout pattern …

Essentially, the price was surging past the highs with a strong catalyst. So I bought some shares to try and snag a piece of the spike.

Take a look at my trade notes below:

Source: Profitly

A lot of times, my new students are watching the right stocks, but they don’t know how to ride the volatility.

For example, they can see the spike on INDO but they don’t see the proper entries.

Don’t worry, that will come with time.

The best thing you can do right now … Keep paying attention and use the AI trading bot that I trained to track these plays.

The AI will help you find key areas of support and resistance that we use to trade. It even gives us trade plans that follow my specific patterns!

Notice that INDO is still trading higher as the Middle-East tensions remain high.

>> Type INDO Into The AI And It Will Give You A Trade Plan <<

Cheers.

 

*Past performance does not indicate future results


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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”