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Patterns To Watch

This Pattern Made Me a Millionaire

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Written by Timothy Sykes
Updated 4/13/2022 6 min read

I’ve been trading for over 20 years now. And during that time I’ve utilized a handful of patterns.

But after two decades, there’s one pattern that stands out from the rest. And I’ll show it to you in just a bit.

There isn’t a single pattern responsible for all my $7.3 million in trading profits, but the one you’re about to discover is responsible for a lot of the heavy lifting.

I’ve played it in hot and slow markets alike. And it’s easy to identify. You’ll see…

Yesterday I Made +10% With It

The Bottom Line on E-Trade Day Trading
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Here’s what I mean. Even with…

… I’ve still been able to profit. And this pattern is one of the biggest reasons why.

This pattern is called the panic dip buy. (Learn more about it here.)

Now, trading isn’t an exact science, which means you can’t learn this pattern from one chart. Different stocks will never behave exactly the same.

What’s more important is to understand the process to potentially profit.

That said, here’s the main idea behind this pattern…

When a stock falls too much, there’s often a correctional bounce. That means if the price falls a lot, at the end of that fall, it’ll bounce as traders look to buy shares for cheap.

That doesn’t mean you can just buy every price crash. Only some stocks will bounce, and even then, you never really know how far they’ll pop back up.

For example, yesterday I traded Kona Gold Beverage (OTC: KGKG) twice for a double profit.

Source: Profit.ly

Two trades for a couple of hundred dollars doesn’t seem like a lot. But that’s how traders make millions over time.

It’s impossible to trade a home-run stock every day. Mostly because there isn’t a home-run opportunity every day. You can only trade what the market gives you. That’s what I did here.

Let me break down my entry and exit…

How to Trade This Pattern

First of all, start with watching the right stocks.

I’m looking for volatile charts that have a lot of downside potential. Remember, I want to trade the bounce after the fall.

The best stocks to watch for panic dip buys are ones with overextended charts. Look at KGKG over the last three months up until March 12. It spiked way past the breakout level.

KGKG stock chart
KGKG 3-month chart — courtesy StocksToTrade.com

This kind of growth is unsustainable, especially for garbage penny stocks. You never know how far they’ll go. But just like gravity, what goes up must come down.

After a few green days, I finally saw my chance to profit.

Newbie traders love to ask me, “How much panic is enough?”

Great question. If there’s not enough panic, the stock won’t bounce. I like at least a 20% price drop for a potentially profitable bounce.

Check out this KGKG intraday chart. On the first dip I bought, the price had dropped 16% from highs.

KGKG stock chart
KGKG chart 1-day, 1-minute candles — courtesy of StocksToTrade.com

I know that’s not 20%. I decided to buy the dip considering how overextended the stock was. That’s what I mean when I say trading is an inexact science. Every trade’s a little different, like a snowflake.

When the bounce topped out, I sold for a 5% profit. But as it continued lower, I knew more panic meant another possible bounce.

So I bought back in after a 21% drop from the HOD and took another 5% profit.

Trades like these are how I’ve made millions as a day trader.

Most newbies are swinging for the fences on every trade. I focus on taking the meat of the move and cutting losses quickly.

Learn All the Patterns I Trade

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Hands down, this is my favorite setup. But it’s not the only one I use.

For example, I have a breakout pattern to help me catch supernova price spikes. Like $KGKG’s run before I dip bought the panic. Study up on that strategy here.

If you’re serious about making money in this industry, you must find the patterns that work for you.

I have 20+ millionaire students now, and we all trade a little differently. They used to be where you are. Then they joined the Challenge and learned to trade. Want to become my next student?

Apply Now!

Start studying today. Don’t wait around for the money. Go get it!

Have you heard of a panic dip buy before? What patterns do you use to trade? Let’s find out which patterns we have in common — leave a comment below! 

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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. 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”