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Trading Lessons

How To Trade Premarket Spikers

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Written by Timothy Sykes
Updated 4/4/2024 7 min read

Some of the best setups right now are during premarket trading hours.

This can be confusing for new traders, but don’t worry. The process is much simpler than it seems.

That’s the way most things are in the stock market. Things are almost meant to be confusing … That’s how Wall Street wins.

Theoretically, if you don’t know how to trade premarket, you’ll give your money to a Wall Street executive who’ll make money for both of you. They take a cut.

I’m here to pull back the veil!

It’s important for traders to understand premarket AND after hours opportunities because these time frames might line up with their schedule better.

  • Premarket hours are between 4 A.M. and 9:30 A.M. Eastern.
  • Normal trading hours are between 9:30 A.M. and 4 P.M. Eastern.
  • After hours are between 4 P.M. and 8 P.M. Eastern.

There’s an example of all three time frames on the Avalo Therapeutics Inc. (NASDAQ: AVTX) chart below, this was a 620% spike:

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

On the chart above you can see the price immediately reacts to news that was announced at the beginning of after hours on March 27 …

We can’t control when these companies will announce news. As a result, there are often trade opportunities throughout the day. Pick a trading time that works for you.

I snagged a premarket profit yesterday.

Here’s How:

tim sykes pointing at chart
© Millionaire Media, LLC

I’m using the same process to trade every time I approach the market.

This isn’t rocket science, I’m not some kind of math genius. I just know how to follow the rules.

And yes, I can teach you this process.

I’ve already helped more than 30 students cross the $1 million trading milestone. And there are more on the way.

Take a look at my recent Tweet below:

Luckily, you made it just in time.

There are a lot of trade opportunities right now because the market is hot. And it’s about to get hotter … Learn about the $2 trillion catalyst about to hit the market.

Three out of four stocks follow the market. That means, when the bulls are in charge, there are more profit opportunities for small-account traders like you and me.

Like my profit on TC BioPharm (Holdings) plc (NASDAQ: TCBP) from yesterday morning. There are always stocks like TCBP spiking, but the larger bull market helped push TCBP 150% higher before noon!

And when a stock moves like that, I have more room for error as a trader. Out of the 150% available, I snagged 11%.

My trade notes are below, I had a starting stake of $9,090:

Source: Profit.ly

Small Gains Add Up

Millioniare Mentor Update Avoid the Slippery Slope
© Millionaire Media, LLC

Had I played the entire move …This is completely hypothetical and I would never be so rash, but let’s do the numbers.

With my starting stake, I could have profited more than $13,000. In a single day.

But there’s NO WAY I would catch the entire move. Even attempting to do that would be incredibly risky. We have to focus on the most predictable part of the setup. Then we make the trade and move to the next spike.

It’s not about how much you make. It’s about how much you keep. Don’t swing for the fences. That’s how traders get burned.

Instead, focus on my trading process:

I use simple technical indicators like support and resistance to trade the best setups. On the chart below you can see where I bought and sold shares of TCBP.

Notice …

  • The news catalyst.
  • Consolidation above a key support level.
  • My buy after confirmation of support.
  • My sell into strength.
TCBP chart intraday, 1-minute candles Source: StocksToTrade

Obviously I sold too soon.

But remember, I’m not trying to swing for the fences. I’m trying to keep my account safe while growing it incrementally over time. In more than 20 years of trading I’ve made +8,000 trades. I profited on 76% of those trades.

Here’s my profit chart over the same time period:

Source: Profit.ly

Small gains add up.

Premarket & After Hour Intricacies

© Millionaire Media, LLC

Most all available brokers will offer premarket and after hours trading. But it doesn’t hurt to check …

Technically, this trading doesn’t happen on exchanges like the Nasdaq or the NYSE. Instead brokers connect with electronic communication networks (ECNs).

From our point of view, the process is almost identical.

One point to note … We can’t use market orders during premarket or after hours trading. We have to use limit orders due to the ECNs. But if you’re familiar with my process you should know that we ALWAYS use limit orders NO MATTER WHAT. So this shouldn’t be an issue for you.

But due to the use of specific ECNs, there’s less liquidity in premarket moves and the price action can move more quickly. So make sure you’re trading with a plan!

Timing is everything in the market. And those who prepare beforehand are most prepared to profit.

StocksToTrade has seamless broker integration with real-time data to ensure speedy order executions. That’s how I link my brokerage account to the market.

And it’s where the charts in this blog post came from.

>> Try a 14-day trial of StocksToTrade for just $7! <<

Pick a trading time frame that works for your schedule and hit the ground running.

There’s a new profit opportunity every day in this 2024 market.


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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”