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Short Selling- Tim's Trading Challenge

3 Keys To Playing Short Squeezes

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Written by Timothy Sykes
Updated 10/26/2023 5 min read

In today’s unique “inverse market,” many classic plays are yielding unexpected results.

Yet, this Tuesday, we witnessed a textbook play.

If you’re trading the latest short squeeze craze, then you must be aware of these three essentials if your goal is to stay safe and profitable.

Has the Order Been Restored?

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The ticker symbol INM went from $0.45 on Monday to a high of $2.08.

The catalyst?

A classic pump and dump.

The stock was part of a blatant stock promotion…

Typically, these are easy shorts…but in an inverse market, easy shorts become brutal short squeezes.

Typically when a company hires a promoter their goal is simple: pump the stock up and then do an offering, a dilution event that usually tanks the stock price.

Not only did INM fade after it hit its highs…the company issued a 3M share stock offering in the after-hours…further sinking shares lower.

On Wednesday, shares opened at $0.74.

Source: StocksToTrade

Is this the end of the inverse market?

It’s hard to say, but markets are dynamic. Just like we had an overabundance of short sellers, you can also get an overabundance of longs.

That said, here are three essential keys for trading these short squeezes.

#1 Take Profits Before They Disappear

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Sure, it looked like the longs were in the driver’s seat early on in INM on Tuesday…

But this was a blatant pump…

And I always say you can’t trust these companies.

In an inverse market, you can take these as longs, but you must be careful, and you must take profits quickly.

Those traders who bought into the hype and held likely got smoked.

#2 This Is Not The Market For Holding Overnights

When you’re dealing with the worst of the worst companies…then expect the worst.

Taking overnights during the week is a dangerous strategy in such a choppy and unstable market.

It’s better to trade scared than to trade greedy right now.

#3 Pay Attention To The Latest Trends

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Always ask questions when you’re trading…

How is the market holding up?

Are we seeing clean runners or choppy breakdowns?

Traders tend to be short-term thinkers. If they see something working, they will try to milk it until it stops.

That’s why we see sympathy plays work so well.

That said, the best play is often no play in this market.

The spikers this week have been WEAK. And shorts are starting to get the upper hand again.

Just stubborn shorts have been getting wrecked for weeks…longs can easily get wrecked if they are stubborn.

That’s why it’s always essential to keep up with the latest trends, change, and adapt.

Ready to Master the Art of Short Squeezes? 📉🚀

high frequency trading
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In the wild “inverse market” we’re witnessing, classic strategies are backfiring. Like the case with INM, where a blatant pump and dump took traders for a wild ride.

In moments like this, can you confidently spot the red flags?


🔥 Blatant stock promotions, unexpected short squeezes, and stocks diving after hitting highs – this is the new trading landscape.

🔥 Holding overnight might have been your strategy, but in this volatile market, it’s a gamble.

🔥 Recognizing trends is paramount, especially when the spikes are weaker and short plays dominate.

But don’t fret; I’ve been there, and I’ve got the roadmap for you.


🚀 Join me in our exclusive live training sessions.

🚀 Unpack the dynamics of this unique market scenario in real-time.

🚀 Learn to pinpoint short-squeeze opportunities and to sidestep potential pitfalls.

🚀 Stay two steps ahead, anticipate market moves, and profit where others falter.


Do you have what it takes to adapt, evolve, and thrive in this roller-coaster market?

Your Blueprint for Trading Success in This Unpredictable Market is Here. Step Up!



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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”