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Trading Lessons

The Top Setup This Week

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Written by Timothy Sykes
Updated 4/26/2024 4 min read
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It’s the same thing every week.

Start paying attention, and this will start to click.

Last week we watched huge stock spikes like:

  • Aclarian Inc. (NASDAQ: ACON) 140%
  • NewGenIvf Group Limited (NASDAQ: NIVF) 280%
  • BranchOut Food Inc. (NASDAQ: BOF) 140%

Take a look at the NIVF chart below, every candle represents five minutes:

NIVF chart multi-day, 5-minute candles Source: StocksToTrade

All of these runners have something in common.

This process doesn’t change. We look for the same kind of runners over and over again. And the most volatile stocks tend to follow a specific framework.

It has seven parts.

But before we can trade these runners, we have to find them.

All of the best spikers share this factor …

The #1 Spike Setups

tim sykes in sedona arizona with laptop of stock chart
© Millionaire Media, LLC

Every day there are thousands of stocks moving. There could be a few hundred that look like they match our trading framework. But we only want the best plays.

Anything can happen at any time in the market.

Those who focus on the best setups are likely to save their account from undue risk.

Protect your overall account: Focus on the best setups.

We’re looking for stocks that are most likely to spike higher. And there are a lot of factors that contribute to a stock’s “spikeability”. Things like:

  • History of spiking.
  • Sector.
  • Catalyst.
  • Intraday price action.

But above all things, the #1 factor we should pay attention to right now is the stock’s float.

The float also considered the stock’s supply of shares.

A low float means there’s a low supply. And a low supply helps prices spike higher when demand increases. It’s a simple law of supply and demand.

For the purpose of stock trading, anything below 10 million shares is considered a low supply.

And when we look at some of the most recent spikers …

  • Aclarian Inc. (NASDAQ: ACON) has a float of 428k shares.
  • NewGenIvf Group Limited (NASDAQ: NIVF) has a float of 10 million shares.
  • BranchOut Food Inc. (NASDAQ: BOF) has a float of 2.8 million shares.

A good rule of thumb for this week: Stay away from stocks with a float that vastly exceeds 10 million shares.

(This is an inexact science, so sometimes we’ll see a good spiker with something like a 15 million share float. Keep that in mind.)

The Rest Of The Plan …

We still have to trade the stock once we find it.

I shared the 7-Step Framework earlier in this post.

Volatile stocks can follow this framework because people are predictable during times of high stress. And that predictability manifests itself in the stock market.

You don’t have to worry about these patterns disappearing. I discovered the framework over two decades ago. And it’s still in use today.

It will continue to manifest as long as people continue to trade.

We’re watching for new spikers on Monday morning with a low float … But there’s another stock that’s already a few steps into this 7-Step Framework.

It’s Jack Kellogg’s #1 watch right now.

Jack is one of my most successful millionaire students. In a fraction of my trading career, he’s passed my market profits for a stunning $12.6 million thus far.

Here’s Jack’s writeup for the #1 framework runner right now.

Follow the rules!

These stocks are volatile. It’s possible for newbies to lose money on these plays if they get on the wrong side of the stock.

Get ready for more spikes this week!

Cheers.

*Stock trading is inherently risky.

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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”