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The Next Meme Squeeze

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Written by Timothy Sykes
Updated 5/17/2024 4 min read

Last week’s meme-stock frenzy got out of control FAST.

Faraday Future Intelligent Electric Inc. (NASDAQ: FFIE) spiked higher every single day. The whole move measured 9,600%.

Luckily, my students and I had an AI bot that tracked the price action.

Even if you were completely new to trading, XGPT alerted several profit opportunities throughout the week.

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

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

>> Here’s where you can find the next AI trade alert <<

Now, when a new trader looks at a spike like FFIE, and they see my students and I pulling insane profits, they tend to get ahead of themselves.

FOMO is a very powerful emotion in the stock market …

And believe it or not, the existence of FOMO is one of the reasons traders like me and my students can profit.

Human beings are inherently predictable during times of high stress. Like when they have a few thousand dollars in a stock spiking +1000%.

When a trader starts to feel stressed, they’re playing directly into the framework that I use to profit.

It’s my job to teach traders how to step back and recognize these patterns in the market. Don’t let FOMO work against you. Instead, use it to help build your account profits.

The Reality Behind These Stocks

© Millionaire Media, LLC

When a trader looks at a chart like FFIE, it’s easy to think:

“Everybody’s making money! Riding this momentum must be easy!”

Wrong.

90% of traders lose. Especially when it comes to big stock spikes like FFIE.

Meme runners like FFIE and GME are actually massive short squeezes.

See my post on X below for more details:

Most of the bullish momentum comes from short sellers blowing up. It looks like strong bullish buying, but in reality, there are very few who are riding this momentum for a profit.

It’s possible to trade these runners … But don’t let the FOMO lie to you.

My students and I just aim to take the meat of the move. None of us profited anywhere close to 9,600% on FFIE.

For example, here’s a trade that Jack made for a 46% profit, with a starting stake of $56,700:

Source: Profit.ly

A 46% profit is HUGE in our niche. Usually we aim for 10% to 20%.

Don’t lose your head. Control your expectations and focus on the best setups from each of the hottest stocks that we’re watching.

And if you don’t know what that looks like: Lean on XGPT.

The AI bot is programmed to follow our trading framework to a T.

And you already saw the trade alerts it sent out for FFIE last week … Get ready for this week’s runners!

Cheers.

 

*Past performance does not indicate future results


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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”