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Patterns To Watch

Do Your Mornings Start With THIS Pattern?

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Written by Timothy Sykes
Updated 8/11/2023 6 min read

People overcomplicate trading.

They throw one indicator after another onto a chart, hoping they’ll find the magic bullet.

Months go by before they realize they’re on the wrong track and their wallets are lighter.

In reality, all you need is a solid plan of attack.

Right now, the best setup comes first thing in the morning, all thanks to this one pattern.

With this simple setup, you cut your trade time and boost your profit potential.

It’s how I nailed Bright Minds Biosciences Inc. (NASDAQ: DRUG).

I want to show you how to identify, plan, and trade this pattern quickly.

Because if there’s one thing I know, you take what the market gives you.

Analyzing Price Action

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Friday, I explained why I was looking to dip buy failed one-day spikers.

In this market, short sellers keep overextending themselves.

I watched tons of them try and bet against Applied Optoelectronics (NASDAQ: AAOI) in the $8’s, $9’s, and even $10’s, despite a relentless multi-day run.

It’s absolutely baffling.

Why would you want to short a stock that looks like this:

Clearly, they’ve never shown up for one of my FREE LIVE CHALLENGE TRAINING SESSIONS.

If they had, or even if they had just read this blog post, they would know that you NEVER want to short a first green day, especially one with huge volume behind it that closes near the recent highs.

In fact, that’s a pattern many of my students will often buy.

I always want to align the setup with the pattern.

That’s precisely why I’m focused on the failed one-day spikers.

It’s not because this pattern worked last year or that I expect it to work a year from now.

It’s because it’s the pattern that’s working RIGHT NOW.

You can’t create the right plan of attack if you don’t read what’s happening in the market at this very moment.

Why do you think I, and many of my top students, killed it in 2021?

We saw what the market was doing and adjusted accordingly.

A big part of trading is reading the tape to determine what’s going on, what’s working, and what’s not.

Failed One-Day Spikers in Action

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I like to tell folks that I’m a history teacher. What we learned in the past helps us today.

One-day spikers aren’t anything new. In fact, they’re a dime a dozen.

But there’s a big difference between what’s going on now and what I’d seen in, say, 2022.

Today’s failed spikers have two key characteristics:

  • They often have a secondary pop on the way up
  • They often have a panic dip buy and pop near the open

Take a look inside DRUG.

The secondary pop typically takes place on that first move.

Panic dip buys happen right at or near the open followed by a quick pop.

In both cases the entire trade lasts no more than a few minutes.

Here’s another example using Silo Pharmaceuticals (NASDAQ: SILO):

In this case, I nailed the entry for the first pop. But, I screwed up because I WASN’T PREPARED!

Instead of selling on the next push I took a loss.

But again, you can see the same panic dip buy and pop right at the open.

Timing on these trades is critical…or should I say the time of day.

These aren’t stocks to play in the afternoon.

Don’t just take my word for it.

The majority of times, I tried buying into dips or breakouts after the morning panic cost me money.

Finding Profitable Plays

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Almost every one of these trades starts with a news catalyst. And there’s no one better in that department than our StocksToTrade BREAKING NEWS CHAT.

Once you find the stocks with news and premarket moves, it’s just a matter of planning your setups.

Above all else, make sure you size your trades correctly, knowing where you want to take profits and where you would stop out.

As my SILO trade illustrates, when you aren’t prepared, a winner can quickly turn into a loser.

Your Next Move Is This Most Important

students kyle mari and jack
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You could be just a winning pattern away from having a breakthrough.

Each day my team puts together live training sessions aimed at helping you become a better trader.

I’ve helped over 30 of my students on their way to becoming millionaire traders. And I’m hungry for more.

It starts by attending today’s free live training class.

That’s why I’m personally inviting you to come and check it out.

Join me for a LIVE STRATEGY SESSION, where I cover the top patterns and setups I, and many of my millionaire students, use to navigate the market every single day.

CLICK HERE TO RESERVE YOUR SPOT.


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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”