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Patterns To Watch

How To Stay Safe Trading Choppy Supernovas

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs
Updated 6/3/2026 7 min read
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I recently made a video lesson for students about the difference between successful and failed breakouts (keep reading to find out how to watch it).

Breakouts are a gimme pattern.

I want breakouts because that’s where most of the money is right now.

But if there are no true breakouts…

There is a LOT of opportunity in choppy supernovas.

The key is to understand how to stay safe and protect your capital.

It’s not a perfect science.

And sometimes I go against something I just told students to avoid.

But when it comes to managing risk in a market like this, I at least TRY to follow these…

5 Risk Management Ideas for Trading Choppy Supernovas

In a perfect world I’d focus on clean breakouts.

But as a teacher I also want to show different patterns and ideas to students.

So, sometimes I take trades based on a stock’s characteristics.

With that in mind, here are 5 things to watch out for with volatile stocks in the current market.

Beware of Double Tops

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We’ve seen some very clear double tops in the last week.

For example, Jin Medical International Ltd. (NASDAQ: ZJYL) double-topped between after-hours and premarket trading June 1-2.

ZJYL after-hours 6/1/26 through regular hours 6/2/26, double top example
ZJYL after-hours 6/1/26 through regular hours 6/2/26, double top example

Technically, ZJYL did break out, but only for just over a minute. So, if you trade these choppy supernovas, know and respect key resistance levels.

At the same time…

Understand the Stock’s Characteristics

ZJYL was a pretty clear double top. But what happens when there are multiple spikes and the trend is up?

Compare ZJYL to STAK Inc. (NASDAQ: STAK) which spiked in premarket on June 2.

Notice how STAK did a series of spikes and drops all day long…

STAK, 6/2/26, spike and drop again and again
STAK, 6/2/26, spike and drop again and again

I’m not gonna be aggressive when I don’t have a perfect setup. At the same time, you can look at how the stock is trading and find places to enter and exit. It’s not ideal for me, but I wanted to mention it because sometimes it’s not so straight forward (and some people like these little scalps)

Here’s another chart showing multiple spikes. But I like this one better because it shows…

More Breaking News

 Look for Repetitive Spike and Consolidation

This is similar to a stairstep pattern. It’s choppy, but you can clearly see it on the Laser Photonics Corporation (NASDAQ: LASE) chart…

LASE 6/2/26 premarket to 6/3/26 premarket, spike and consolidation stair step pattern
LASE 6/2/26 premarket to 6/3/26 premarket, spike and consolidation stair step pattern

Some readers ask how do I know when to buy or sell stocks like this. Again, it’s not a perfect science (and I’m NOT a perfect trader).

The best answer I can give you is this: Apply for my Trading Challenge. That’s where you can watch the video lesson I did on successful and failed breakouts. It’s where I answer students’ questions (during webinars).

But I’ll give you the basic idea…

As the stock is consolidating, watch for an upward trend with increased volume. The key point is to watch. The more screen time you put in, the better you’ll get at recognizing the next leg up.

Here’s the next way to stay safe trading these choppy supernovas…

Beware of One-and-Done Spikers

Xos Inc. (NASDAQ: XOS) spiked after-hours on June 2 on news about mobile power for datacenters.

Check out the chart…

XOS, 6/2-3/26 after-hours and premarket spike, overextended
XOS, 6/2-3/26 after-hours and premarket spike, overextended

As you can see, between 4:20 p.m on June 2 and roughly 7:00 a.m. on June 3, XOS spiked from the low $2s to the high $8s.

You really have to be aware of just how far stocks like this have come. Beware of one-and-done spikers.

That said, you could have traded XOS breakouts, spike and consolidation, spike and drop…

In other words, there are many ways to play choppy supernovas. Always trade with a plan and be willing to cut losses quickly.

Finally…

Always Expect the Worst

Always expect these stocks to be guilty. They’ll all fail (probably). Do not expect any of them to go full Supernova.

Most companies fail, most stocks fail, and all supernovas eventually fail. They all get ahead of themselves.

So, feel free to take small speculative positions.

But keep your risk tight, follow your plan, sell into strength.

If it’s going against you, get out (and move on to the next).

Millionaire Moves

What do Mari Hincapie, Jack Kellogg, Matt Monaco, Kyle Williams, Eduardo Liseño and at least 44 other traders have in common?

They’ve all made at least $1 million in trading profits.

How?

Hard work. Dedication… And a willingness to study and learn from the market.

Today is the day that the PDT rule goes away.

That means this already crazy market is about to be MORE crazy.

Which is why I can’t stress enough that you apply for the Trading Challenge.

Even if you don’t trade right away (or paper trade) this market is IDEAL for watching and learning.

But if you don’t know what to watch (or what you’re seeing) it could be a missed opportunity.

So…

Apply for the Trading Challenge today and LET’S GOOOOO!

Cheers,

 

– Tim Sykes

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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”