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Trading Lessons

The BEST Time to Buy Morning Spikers (Without Chasing)

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Written by Timothy Sykes
Updated 2/16/2022 6 min read

I recently made $942 in a matter of minutes…

Trading a morning spiker that was already up 200%.

Usually, when a stock’s already up that much, people avoid it.

But I still believed it could run higher.

Turns out the stock surged by 380% that day.

Now, you’re probably wondering: lucky trade or did I do something?

After all, most traders wouldn’t buy a stock that’s already up 200%

How’d I know it was a smart trade versus a desperate chase? 

Three reasons…

The Right Time to Buy Morning Spikers Vs. Chasing

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New traders have trouble understanding the difference between a smart trade and chasing. Here are the three reasons why I felt confident entering this trade.

1. Continued Volume After News

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On Tuesday morning, Trading Cyber Enviro Tech (OTCPK: CETI) announced the launch of a pilot oil production and water filtration technology program. The press release said it could be a $4 billion opportunity.

New technology excites people, and a number like that is enough to bring in buyers … even if it doesn’t happen.

CETI stock chart
CETI chart: Feb. 15 2022, morning spiker (Source: StocksToTrade.com)

STT’s Breaking News Chat alerted the news on CETI in the premarket. If I’d seen it right away, I could have traded sooner. But I was busy trading United Communications Partners Inc. (OTCPK: UCPA) for a $726 profit.

By the time I saw CETI, it was already up 200%.

Sometimes, news like this can create a quick spike then it’s all over. But CETI continued to trade on strong volume after the news — it didn’t crash and burn.

But that wasn’t all…

2. I’ve Seen This Pattern Before

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I always say that I’m a glorified history teacher. I want traders to understand — you’ve gotta study the past to be prepared!

There’s NO excuse to not be prepared. My Trading Challenge students have access to a massive video library … My YouTube channel is full of free videos, too.

The more that you study trades in real time and from the past, the more you’ll be prepared to capitalize.

If you act fast, you’ve got a chance to trade live with me and get some serious market experience — grab your spot NOW for my all-day live trading event coming soon!

I’ve seen plays like this over and over. Just last week, UCPA spiked on news. Like CETI, I found it through a Breaking News alert. Also like CETI, I didn’t get in right away. But I still made a $472 profit.

UCPA stock chart
UCPA chart: Feb. 11 2022, morning spiker (Source: StocksToTrade.com)

When I see runners with price action like these, I see the potential.

But even so, it’s never a sure thing. Which leads to the next reason…

3. I Had a Plan

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CETI went up over 380% — the biggest percent gainer we’ve seen in weeks.

I didn’t know it would go up that much — it was already up 200% when I bought it.

I saw the news. I saw the price action. I saw the potential…

But I still wasn’t sure.

So why did I still enter the trade?

Because I knew that I could take a small position. I knew that if I was wrong, I could cut losses quickly.

It’s not rocket science. If you’re not sure, you can take a small position. You can paper trade on StocksToTrade.

It doesn’t have to be all or nothing. And you don’t always have to be right.

I actually traded CETI three more times over the course of the next 24 hours. I had one more $211 profit

But I also had two losses — a $248 loss in the late morning and a $180 loss on an overnight hold.

But because I cut losses quickly, my wins were bigger than my losses.

You don’t have to be right all the time to grow your account. Small wins can snowball over time … here’s how!

Keep Learning…

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Whenever I have a trade like this, I get a ton of questions…

  • How did I see the news?
  • How did I know to buy?
  • How did I figure out position size?
  • How did I know when to exit?

I made a video to answer all of these questions. Watch it and learn!

You might have missed CETI … But you can still learn from this trade and be prepared next time we see a massive runner like this.

Do you think I was crazy to enter CETI when it was already up? Do you understand the difference between having a plan and chasing? Leave a comment … I love hearing from you!


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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 (205) 851-0506 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”