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Trading Recap

Was NAOV The Cleanest Trade Of The Month?

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Written by Timothy Sykes
Updated 8/30/2023 7 min read

Nothing gets me more excited than seeing my students find success.

Because in trading, there are no guarantees.

They must put in the work…sometimes they can spend weeks, months, or years without seeing changes to their trading account.

That’s why yesterday’s trade in NAOV was so sweet…

What makes me even more proud is that I actually lost money on my first entry attempt.

In other words, my students who profited in NAOV did so using their own trading plans.

So what made NAOV possibly the cleanest trade of the month?

NAOV The Gift That Kept On Giving

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On Tuesday Axcella (AXLA) was granted a patent for long COVID fatigue treatment.

The stock went from $0.10 to $0.58.

In addition, the trading volume was insane, trading more than 200M shares that day.

With that trade fresh in the mind of traders…

They were looking for biotech penny stocks with catalysts.

Enter the ticker symbol NAOV.

Source: StocksToTrade Breaking News

The company announced positive results from its independent testing for UroShield, an ultrasound device designed to reduce the risk of catheter-associated urinary tract infection.

And like AXLA, this was a low float, microcap penny stock with positive news.

That might sound simplistic for some reading this.

But that’s how traders think sometimes.

They are looking for trends and themes. And this one fit.

The stock traded in the $2.80s in the pre-market…

But rarely will I take a trade in the pre-market.

My play is to wait for the open, and hope there are profit takers or short sellers to push the price down.

I’m focused on panic selling so I can dip buy.

And that’s exactly what happened.

I got in at around $2.14 on my first attempt…

Given how volatile the stock was…I was ready to punt my shares on any weakness.

And unfortunately, I was shaken out at $2.07.

Luckily my students played it much better…

One of them got in at $2.04 and out at $2.80. 

Another got in at $2.06 and out at $2.86. 

And one got in at $2.04 and out at $2.44. 

I love that because it shows me that each had their trading plan.

I want all my students to think independently.

Source: StocksToTrade 

The beautiful thing about NAOV was it held the VWAP for nearly the entire trading day, something my StocksToTrade Lead Trainer Tim Bohen watches closely.

And while it did panic sell-off later in the afternoon…more on that in a bit.

I was able to buy small dips before that.

For example, I traded this three times yesterday.

From $2.76 to $2.95. 

And a third time, $3.16 to $3.31. 

The stock eventually did crack late in the afternoon.

But it wasn’t a technical move that brought it down.

The company announced it had entered into a definitive agreement for the purchase and sale of 2.9m shares of its common stock at a purchase price of $1.72.

A $5 million private placement– YIKES!

Of course, $1.72 is a lot cheaper than what it was trading at, and that ultimately brought the stock down.

Key Takeaways From The NAOV Trade

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I get teased a lot for getting out of trades too early.

#1 Be Nimble

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However, being nimble has helped me make over $7.4 million in trading profits.

And while I don’t hit tops…I’m rarely holding onto losers, hoping and praying.

So yeah, I get out of winners too early…but on the plus side, I am getting out of losers fast before they become devastating losses.

But what works for me might not work for you.

That’s why you need to create your trading plan and stick to it.

#2 Don’t Get Greedy

The other thing is don’t get greedy.

Typically, these companies are low on cash…

They use positive news to raise capital, just like NAOV did.

That’s why you rarely want to hold these high-flying stocks overnight.

And if you’re not by your computer monitoring your positions…have a stop.

I actively manage my trades, but if you have to step away, use a stop.

#3 You Don’t Have To Do It All Yourself

And lastly, it pays to know what’s happening in the market.

With my busy schedule, I rely on StocksToTrade Breaking News to help me find what’s moving and why.

Be Better Than Yesterday

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Every day is an opportunity for you to learn and get better.

Did you nail the trade in NAOV yesterday?

If not, that’s okay.

Learn from it.

These biotech penny stocks are hot right now. I wouldn’t be surprised if traders try to find similar plays today and tomorrow.

That’s why it’s so critical you take your development seriously.

To help you out, my team and I are hosting daily live training workshops.

You don’t have to pay anything to attend.

All you have to do is sign up.

CLICK HERE TO ATTEND OUR NEXT LIVE CLASS


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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 (205) 851-0506 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”