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Trading Recap

My Trigger to Enter $VAPR

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Written by Timothy Sykes
Updated 7/22/2022 5 min read

Nothing moves a stock like Breaking News.

Nearly every morning, a handful of stocks pop in premarket off a news announcement.

That’s what made E-Cite Motors (OTC: VAPR) rather unique.

News came out just before 9:00 a.m.

A partnership with Ford is a huge deal for a tiny EV company.

Yet, shares barely budged in the premarket.

However, when the regular session began, shares immediately jumped +10%.

After only a few seconds, I jumped in at $0.058 and sold a few minutes later at $0.075 for a nice gain.

See all my trades here at profit.ly

This trade offers a unique opportunity to dig into how I identify and enter trades.

Because it’s one thing to say I use price action to trade.

It’s another to SHOW how I do it.

And I take you in my mind, a whole new world of opportunities will open up before you.

Setup Selection

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First things first.

Before I jump into any trade, I make sure it fits my setup criteria.

Now, I don’t necessarily have hard and fast rules, more guidelines.

My goal is to exploit inefficiencies in the markets, especially the OTC.

So, I want tangible reasons why a stock could spike.

These include:

  • Hot sector
  • Former runner
  • Real news catalyst (this is a big one)
  • Hot market

It’s all about the context. Think of it like a story that’s written by each of the components.

With VAPR all of these pieces fit.

  • Electric vehicles are still in the news.
  • The stock ran hard less than a week ago.
  • Since that run, the stock is down 50% from its highs.
  • The partnership gives VAPR legitimacy.
  • Many OTC stocks have been running hard in the last month or so.

Every trader that joins my millionaire challenge wants to know which news events to trade.

This is how you know.

I realize that it’s not black and white. However, it doesn’t need to be difficult.

With practice, you’ll be able to identify which stories act as catalysts before the stock moves.

My Entry

Let’s look at the chart so you can see what the first few seconds of trading looked like in the name.

Despite the news hitting before the open, shares barely budged.

It wasn’t until the open that volume hit the stock.

So, looking at the order flow, I bought into the stock, only getting a partial fill.

I expected one of two things to occur:

  • Shares would continue higher as more people digested the news
  • We’d hit a wall of sellers

Thankfully, the first scenario occurred.

But what would have happened had I hit a wall of selling pressure?

Ideally, the stock would trade sideways for a couple of minutes on heavy volume, giving me an opportunity to exit close to my entry.

Worst case, I could use the low of the day as my stop.

Managing the Speed

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All of this requires you to make split-second decisions.

This isn’t something that comes naturally or quickly.

I practiced these setups for years.

Starting out, keep your size smaller. Don’t be afraid to stop out back at your entry.

As you progress, use simple rules for your trades to enter and exit.

Wait for a wall of buyers to enter an OTC stock on a pullback.

When you see volume increase while price stops moving as much, consider taking profits.

Final Thoughts

Setups like these may not be your cup of tea either.

I teach my students many different ways to analyze stocks and trade chart patterns like my Supernova.

Work with ones you are comfortable with to start and then branch out from there.


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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

* 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”