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Why $AYTU Was Such A Gimme For Traders đź’°

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Written by Timothy Sykes
Updated 9/28/2023 5 min read

Way too many traders are focusing on the most difficult plays out there and leaving gimmes for no good reason.

Stop focusing on those stocks that are spiking 3%, 5%, or even 10% that have little to no volume…

It’s no wonder why so many traders get frustrated early on in their trading career and call it quits.

Trading is all about being meticulous with your trades…

And focusing on the best setups possible.

That’s why today, I’ll be breaking down how my recent trade on Aytu BioPharma, Inc. (NASDAQ: AYTU) was my easiest trade of the week…

And show you how following this same thought process can help you spot trades just like this as early as tomorrow!

Having A Start Point

I’ve said this a million times already and I’ll say it again…

Everyone needs to focus on big percent gainers!

Early yesterday morning AYTU was an earnings winner…

And it was surging over 30%!

Whenever you spot a big percent gainer, typically over 20%, you need to ask yourself…

Spotting a big percent gainer is only half the battle, but it puts you in a better position to start thinking about what your next steps should be.

Trading is all about figuring out a strategy that works best for you…

And for me, it’s the panic dip buy, which is why I look for big percent gainers every morning.

I tell all of my students who joined my challenge that they will need to figure out what works best for them…

And it’s the basic fundamentals that I teach them that will help them get to where they need to be.

Not every trader needs to trade the same way, but you need to understand the basics of trading if you want to succeed.

Yesterday I saw AYTU spiking from its earnings win…

The last thing I wanted to do was chase it, and that’s something most newbies like to do…

Instead, here’s what I did.

Knowing When To Enter A Trade

Nothing is ever an exact science when it comes to trading…

But there are tools you can use to help put you in a better position to know when to buy or sell.

Way too many newbies try to guess when to buy…

That’s like throwing a dart at a dartboard when you’re blindfolded and you’re hoping to hit a bullseye.

Sure, you may get lucky once in a while, but more often than not, you’ll miss and you’ll miss badly.

Every time I find a big percent gainer that may be worth trading, I need to dive into it a little bit more…

And I do that by looking at multiple charts.

Take a look at this monthly chart…

Source: StocksToTrade

Nothing fantastic about it, but look at where I drew that line…

That’s where AYTU broke out from a multi-month resistance level, which is going to play a key role in what I did next.

Once I noticed that, I decided to take a look at the daily chart…

At that time, I noticed on Level 2 that there was a wall of buyers at that key resistance level, making me feel more comfortable that I could get the bounce I was looking for.

Once I saw that, I was closely watching it minute-by-minute to see if it would hold above that key level.

And as it held for several minutes, volume started to increase and that’s when I decided to enter my trade.

Source: StocksToTrade

I bought AYTU at $2.36 and sold it at $2.63 for an 11.44% win! (Risked $8,260).

These are the types of plays you need to look for as a trader, and time and time again I see students just buy and hold…

And that’s why nearly 90% of traders fail.

When you’re looking to trade, you need to understand the big picture and focus on those basic fundamentals that matter…

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Which will help you make a better overall decision every time you trade.

Just One Last Thing

Not every trade will react the same, that’s why you need to look to cut losses quickly if it doesn’t go as planned.

I always like to take the meat of the move and get out.

I don’t like to stay in any trade longer than I should because seconds and even minutes matter…

And if you held onto this trade longer than you should’ve, you can see it tanked shortly after I sold it, which would’ve wiped away all of my profits if I held on any longer.

One of the hardest things for traders to do is protect their earlier gains.

If you’re just starting off and want to learn more about this market, I recommend you join us for our FREE weekly trading session to get you started!

Stay safe everyone!

-Tim

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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.
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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”