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Patterns To Watch

How To Find Profitable Trade Setups

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Written by Timothy Sykes
Updated 2/29/2024 4 min read

There’s a new opportunity to profit every single day!

The 2024 market continues to impress investors.

There were some worries that the FED’s preferred inflation gauge would show persistent inflation.

The data came out on February 29: Personal Consumption Expenditures (PCE) showed inflation at a 2.4% year-over-year in January. That’s down from 2.6% in December of 2023.

We’re moving in the right direction. And the market is pleased. S&P 500 ETF Trust (NYSE: SPY) shares rallied post-PCE announcement.

Here’s a chart …

SPY chart multi-month, 1-day candles Source: StocksToTrade

When the stock market is hot, there are more opportunities for small-account traders to profit.

And as you can see from the chart above, the market’s on a bull run in 2024.

Most recently: I traded Enveric Biosciences Inc. (NASDAQ: ENVB) yesterday when it spiked 250% with bullish news about a new out-licensing opportunity with another, undisclosed biotech company.

But as you can see from my trade below … these plays move fast.

ENVB chart premarket, 1-minute candles Source: StocksToTrade

Don’t worry, there’s a way to catch these runners before they go vertical.

That’s how my millionaire students and I profit from the market’s hottest stocks.

My Trade Notes

My starting stake was $7,785:

Source: Profit.ly

Some people don’t think $500 is a lot of money to make on a trade.

Don’t listen to the haters.

We’re small-account traders. This is how we can build wealth in a stock market that favors Wall Street whales.

Small profits add up. I’m already at $54,000 in trading profits in 2024. And it’s still the beginning of March …

But most people don’t know how to access these runners.

You won’t hear about these plays from CNBC or Yahoo Finance. By the time you read about it in the news the spike could be over.

These are penny stocks. They can spike to insane heights but they will crash eventually. That’s why we trade them, instead of investing.

There’s no telling what will happen to ENVB today or tomorrow. The news was bullish, but the price doesn’t deserve to spike 250% …

You need to have eyes on these plays early!

I’m overseas right now so I’m trading premarket. But there are intraday opportunities too. It all depends on what works for your schedule.

For example, I missed the bigger move on ENVB during regular trading hours. Look at this intraday profit opportunity.

The price consolidated above support and rallied to new intraday highs:

ENVB chart intraday, 1-minute candles Source: StocksToTrade

The Next Runner

All of my students had an opportunity to build a position on ENVB.

StocksToTrade Breaking News alerted the play during premarket. All a trader had to do was identify support and resistance levels.

See the Tweet below:

This 2024 market is pushing stocks higher every day.

I don’t know how long it’s going to last.

But I do know: We have an amazing opportunity to build wealth RIGHT NOW.

ENVB wasn’t the only stock I traded yesterday …

These are all the trades that I made on February 29.

Make sure you’re early for the next big play: Wait for a Breaking News alert.

Then identify support and resistance to build a trade position.

It’s not rocket science, but it does take some getting used to. Lean on Breaking News until you grow proficient.

Cheers.


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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

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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 (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”