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How To Trade The Biggest Spikes:

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs
Updated 9/13/2024 5 min read
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My students and warned everyone about this market BEFORE the recent +2,000%* stock spike.

Take a look at the post on X below, time stamped September 9:

Source

Last week’s spike was a HUGE short squeeze.

I can only imagine how many thousands of dollars these short sellers lost.

And I would feel bad for them … but they create massive profit opportunities for me and my students. Plus, I tried to warn them.

I included my post on X below from last week:

The 2,000%* spike came from Tenon Medical Inc. (NASDAQ: TNON) …

Now, your free chart software probably doesn’t show premarket or after market hours. So you can’t see the extent of this move.

Take a look at the StocksToTrade charts below. I had to split the spikes into two charts because the intense price action screws up the ratios, lol.

Every candle represents one trading minute:

TNON chart multi-day, 1-minute candles Source: StocksToTrade
TNON chart multi-day, 1-minute candles Source: StocksToTrade

An absolutely CRAZY run!

I didn’t even trade this. I’m just appreciating the price action, lolol.

However, I did trade some of the other short squeezes in the market …

That’s right! TNON wasn’t the first squeeze, and it won’t be the last! Here’s how my students and I are trading them:

The Science Of The Squeeze

© Millionaire Media, LLC

Traders who miss out on some of these plays, don’t feel bad about it.

There’s always another squeeze around the corner. Plus, at least you’re not losing money.

It’s easy to think that everyone’s profiting when you see a +2,000%* spike. Not true, most of this price action comes from short sellers blowing up.

They build positions thinking that the price will go lower, because it already spiked so much higher than it deserved to. But if there are too many short sellers in a stock, any bullish momentum could cause a domino effect of short sellers blowing up.

That’s what makes the spike, short sellers have to buy to exit their positions.

Now, the price action can be profitable for long-biased traders who recognize the popular patterns within the frenzy.

The patterns that we use to trade are always the same because people are predictable during times of high stress.

And that especially goes for short squeezes! Trust me, these short sellers are STRESSED, lolol.

One of the squeezes that I traded last week was on Visionary Holdings Inc. (NASDAQ: GV). And I used a classic dip-buy pattern.

See my trade notes below:

Source: Profit.ly

How I Profit

There’s a process that my millionaire students and I use to profit right now.

For short squeezes, we tweak the strategy just a bit …

I already posted everything you need to know on X. See below:

But those of you who are still frustrated, I have a solution!

Every year, technology improves and I find a new way to help my students learn this process. For example …

  • I consolidated all the available trading tools we use into ONE platform.
  • I started live streaming and recording my trades.
  • We created the Breaking News system to even the playing field with Wall Street’s early-news consumption.

And in 2024, my students are using AI to track these plays.

I trade with the same patterns over and over again! After a few months of work, the AI started to catch on.

Last week, the XGPT AI bot alerted 9 profitable trade entries.

Take a look at one of them below for an example. Every candle represents one trading minute:

>> Get The Next XGPT Trade Alert <<

And use it to build smart positions on the market’s most volatile stocks.

Cheers.

 

 

*Past performance does not indicate future results

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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”