In this week’s edition of the update, I’ll share two trading patterns working for me now. Also, get three tips to being a self-sufficient trader and how to play a short squeeze. Remember the markets are closed today for Martin Luther King Jr. Day. Take advantage of the extra time to study.
But first, a little about my recent adventures…
Table of Contents
- 0.1 Planning, Planning, Planning
- 0.2 Missed Opportunity to Workout With Thor
- 1 Trading Lessons
- 2 Questions From Trading Challenge Students
- 2.0.1 Self-Sufficient Trader Tip #1: Know Which Stocks to Watch
- 2.0.2 Self-Sufficient Trader Tip #2: Know How to Make a Plan
- 2.0.3 Develop Discipline Trading Small
- 2.0.4 Self-Sufficient Trader Tip #3: Know How to Execute the Trade
- 2.0.5 CounterPath Corporation (NASDAQ: CPAH)
- 2.0.6 Trillium Therapeutics Inc (NASDAQ: TRIL)
- 3 Millionaire Mentor Market Wrap
Planning, Planning, Planning
I’m in the U.S. now for meetings. Planning, planning, and more planning…
I was just in Turks and Caicos where I spent a little time at the beginning of the year. I was supposed to take it easy in Turks. But as you know from my last update, I’ve been posting like crazy on social media. Australia is on fire. The fires are still raging — and over 1 billion animals have died.
The crazy thing is, February is historically one of the worst months of the year. So it might get worse and more devastating.
As for me, I’m working non-stop. I’m trying to plan a good time to visit Australia. But the charities are all overwhelmed with work. So they can’t even tell me a time to visit.
It’s a really bad situation — so I’ll keep posting about it. Check out the Karmagawa posts below.
Helicopters Used to Feed Wildlife
The New South Wales government started doing food drops for rock-wallaby colonies. Carrots and sweet potatoes…
View this post on Instagram
Finally some good news from Australia, the government is using helicopters and airplanes to feed hungry wildlife while the bushfires continue to rage, preventing rescuers from using the roads and devastating the homes of so many animals. The New South Wales government began doing food drops of thousands of pounds of carrots and sweet potatoes for rock wallaby colonies in several national parks in what they call “Operation Rock Wallaby” because even if the animals survive the initial fires, they are left with no source of food as the fire destroys the vegetation around their rocky habitat. The rock wallaby, the main species for the state’s food drop initiative, was already deemed at-risk before the bushfires, but now the fires have made it even tougher for them to survive so we must help these amazing creatures before it’s too late! Please share this post with your followers, celebrities and influencers and tag people people who need to see this because there are still good people out there and we must all work together on operations like this to save more animals during this crisis! #saveanimals #australia #karmagawa
Some Parts of Australia Welcome Rain
The rain is welcome for helping put out fires. But it also creates new challenges for the rescue teams. Check it out…
View this post on Instagram
It’s finally raining in some of the parts hardest hit in Australia, some welcome relief in helping put out some of the fires that have been burning recently, but it also creates new challenges for the rescue teams and for these poor animals looking for safety as they have been through so much! We at @karmagawa and @savethereef have now surpassed 50%+ of our goal to raise $100,000 for the month of January to donate to Australian charities to fight the fires and save more animals so please keep purchasing our new “Save Australia” charity merch (see link in our bio) as we’ll proudly continue donating 100% of our merch profits to this cause all month long! And when you buy this new Karmagawa charity merch, you not only help us donate more $, but also you help spread awareness about this crisis every time you wear this apparel out or post about it on social media because money alone can’t fix this crisis, we MUST all learn to work together to make this a better planet for humans and animals alike and that starts with awareness/education so thank you for all your support, let’s keep working to save Australian communities and wildlife! #saveaustralia #savethekangaroos #savethekoalas #karmagawa
Please like and share these posts. Then go to the Karmagawa shop and buy some merch to help save Australia. 100% of the profits from the new collection go to this great cause. We’ve already surpassed 50% of our $100,000 goal. But we need your help to get over the top.
Missed Opportunity to Workout With Thor
One thing I did to get involved was bid on a workout with Chris Hemsworth (aka Thor) and his wife Elsa Pataky. Unfortunately, I didn’t get it. I put in a bid of $46,000 with a max bid of $50,000. But I was asleep when the auction finished. (Australia time, right?)
Needless to say, I was disappointed. I’m a huge fan of Thor and Chris Hemsworth’s work. Obviously, he’s jacked, so it would’ve been cool to work out with them. They would’ve kicked my butt!
But I had some fun with it. And no matter who won the auction, the money all goes to charity to help Australia. It’s a win/win — even though I Iost.
OK, let’s get to some…
There are some really good trading lessons this week.
First, even though I’m traveling, working with charities, and crazy busy, I’ve averaged $1,087 in profits per day in 2020.* That’s per trading day, of course. Yes, I’ve had some small losses. But they’re like $120 or $150. The gains are much bigger on average.
Very important: you don’t see me having $1,000 losses. Instead, I have $100 or $200 losses and $1,000 wins. Those wins wipe away ALL the losses.
Here’s another way to look at it…
At the time of writing, I’ve closed 25 trades this year with only three losses. My average win is $651.29 while my average loss is $207.77. So even if I was trading with a 50% win rate, I’d be way up on the year. But I’ve had a good year so far with an 84% win rate.
[*Please note: my results are not typical. I’ve spent years developing exceptional skills and knowledge. Always remember trading is risky. Never risk more than you can afford.]
Two Trading Patterns Working (for Me) Now
Recently, morning spikes and first green days on OTC plays have been working for me.
To learn more about morning spikes…
When you finish this post, read this: 5 Steps You Should Take Every Morning. Then, if you already have a Profit.ly subscription, search video lessons under the category Price Action: Morning Spikes. If you don’t have a subscription, now’s the perfect time to get one. Get started here.
First Green Days On OTC Plays
Check out this video about one of my all-time favorite patterns: the first green day…
A first green day is a low-priced stock with some kind of catalyst like…
- A new 52-week high.
- The company introducing a new product.
- A good earnings announcement.
- A billionaire investing in the company.
- Or some other kind of news alerting traders to the stock.
And not just alerting…
… but influencing traders to buy it.
With low-priced stocks, we’re taking advantage of informational inefficiency. With the right catalyst and enough volume, it pops up on the radar of traders who normally don’t trade low-priced stocks. When they see it they say, “This low-priced stock is in play… there must be something in it…”
Then, over several hours or several days, it keeps going. And I look to buy when it’s closing high — or near its highs — after a strong catalyst and big volume. If it plays out right, it should gap up or morning spike the next day.
If you’re new to trading penny stocks, get my FREE penny stock guide here.
Let’s get on with…
Questions From Trading Challenge Students
“Tim, you encourage students to become self-sufficient. How do you define self-sufficiency as a trader?”
To start, it’s when you don’t need to ask me “What’s this stock gonna do?” or “What stock are you looking at?”
Self-Sufficient Trader Tip #1: Know Which Stocks to Watch
All my top students know which stocks to watch. They know how to build a watchlist. (Hint: They’re looking at big percent gainers.) They know their patterns — their favorite patterns.
It’s not just knowing all the patterns. We’re all different. Get to know what you’re best at.
👉🏼Get my FREE weekly stock watchlist here.
Self-Sufficient Trader Tip #2: Know How to Make a Plan
Then, you have to know how to make a plan. So first you have to spot the best plays and know what works for you. Then you have to know what you’re gonna do.
You need to know…
- Which pattern is it? And what’s the price action?
- What’s your risk vs. reward and your ideal entry price? And how much will you risk? What percent gains are you looking for? What will you do when it hits or comes close to your target? What’s your mental stop-loss price?
- How easy are your entry and exit? How much volume is there on the day?
- What’s the stock’s past history of spiking?
- What time of day are you considering trading? How does it fit your personal schedule?
- What’s the catalyst? Has it been working well recently?
- How’s the overall market doing? What’s the environment?
At first, you probably need to go through each of these steps with every trade. Over time you may be able to do a few quick mental calculations and come up with a plan. But don’t rush it. It takes time.
For more on using these indicators, please read “The Complete Penny Stock Course.” (See Chapter II: 11 Sykes Sliding Scale, pg. 235.)
Here’s an example…
Develop Discipline Trading Small
My student Stephen Johnson can be one of the most stubborn people I’ve ever met. He broke all the rules. He was trading large-cap stocks and taking losses. Here we are in something like year three or four, and he’s turned a $600 account into a $2,000 account.**
$1,263 profit in first ten days of year starting with a $600 account trippling it. Im soooo much more consistently profitable. @timothysykes said just trust and believe in me when I say you can do it and give five years of your time as a commitment, it took three to four. Tnx. pic.twitter.com/4gUIN8FSIH
— Stephen Johnson (@Jonk87) January 11, 2020
How is Stephen turning it around? He found discipline trading small. Self-sufficiency is beautiful but … it takes a while. So stay focused and disciplined. It’s a marathon — not a sprint.
Self-Sufficient Trader Tip #3: Know How to Execute the Trade
You also have to know the mechanics of trading. This includes knowing the right order type and understanding slippage. It might be knowing how to get in and out of a stock if it gets choppy or starts moving fast.
Again, it takes time. You need to get market experience. Do it with a small account and small position sizes… Over time you’ll get a feel for it.
Last question for this edition of the Millionaire Mentor Update…
“Tim, going long on short squeezes seems very risky but a lot of your students are doing it. Some are banking. Is there a good risk vs. reward for this kind of play?”
Again, this goes back to knowing your favorite patterns. I know a lot of students who are banking … buying stocks like TRIL and CPAH.** These are/were short squeezes that are in play.
For me … I’m really not good at it.
When I’m long, shorts like to mess with me. They’re no different than promoters. I say shorts are the new promoters. I didn’t like it when promoters knew I was shorting their stocks. And I don’t like it when shorts know I’m longing their stocks.
It’s almost like they do everything to get me out. They know that rule #1 is cut losses quickly.
So … I’m not great at them. But a lot of students are doing well with them. And that’s fantastic.
Also, it’s not as risky going long as it is going short. Because these stocks can spike so quickly.
But if you are going long, recognize that you’re buying a very short-term catalyst. Short squeezes are nice for a few days (at most), but then they crash.
Check out these recent examples…
CounterPath Corporation (NASDAQ: CPAH)
CPAH was a fantastic short squeeze. It went from roughly $1 all the way to $6. Now it’s back in the mid $2s.
Take a look at the CPAH one-year chart first:
And now look at the chart from January 10–17:
Notice the quick morning spikes on the chart. Four out of six full trading days there was a morning spike. Make a note of that.
Here’s another short squeeze…
Trillium Therapeutics Inc (NASDAQ: TRIL)
I called TRIL on my most recent penny stocks to watch list. It went from the mid $1s to the $3s. And now it’s also back down to the $2s.
Here’s the TRIL one-year chart:
Now take a look at the chart from January 9–17:
If you do want to participate in a short squeeze, you’re going for the quick morning spike.
As you can see from the chart, TRIL had news premarket on January 9. That led to a small pre-market spike, and then a huge morning spike at the open. But then it kept going. Day two … morning spike … day three … morning spike…
But I wouldn’t be buying for the short squeeze on day four. Or day five. It’s kinda like a bouncing ball that’s petering out…
Millionaire Mentor Market Wrap
That’s another one in the books. This week we covered the two patterns working for me right now — first green days and morning spikes. Also, three tips on becoming a self-sufficient trader and how to go long on a short squeeze.
Ready to take your trading to the next level? You get to choose your level of dedication and we have different plans…
Pennystocking Silver is our monthly subscription to Profit.ly. Here’s what you get…
- Access to over 6,000 video lessons (with new lessons added each week.) These lessons show you exactly what — and how — I’m trading in the current market. Plus, with access to the full library, you can delve deep into different categories.
- Access to the TimAlerts chat room. Here you can keep up with what your fellow students are trading. This interactive environment is a must for new traders. Ask questions of traders with more experience and make connections with traders of similar experience.
- My daily stock watchlist. Every day I create a watchlist telling you what stocks I’m watching, why I’m watching them, and how I might play them.
- Real-time ProfiDing Trade Alerts. You get these by email, push, and SMS. It’s your choice. While I don’t encourage anybody to follow my alerts into a trade, it’s a great way to learn my process.
- iPhone and Android app
For many traders, Pennystocking Silver is the ideal plan and gives them everything they need to grow as a trader.
Do you have what it takes to be a great trader?
My Trading Challenge is my most comprehensive plan. Not only do you get access to the video lessons, watchlist, and alerts like Pennystocking Silver subscribers…
But you get access to the Trading Challenge chat room. This unique chat room is where all my top students — young stars like Huddie, Jack Kellogg, Dominic Mastromatteo, and Kyle Williams — all hang out. Want to know what these guys are trading? Hit the Trading Challenge chat room.
Plus … you get access to live webinars every week from the likes of Mark Croock, Tim Lento, Michael Goode, yours truly, and … arguably the greatest penny stock trader in the world, the OG … Tim Grittani. We usually schedule two to three webinars per week.
To make it even better, all webinars are archived so you can watch every single one. That’s thousands of hours of highly instructional webinars with some of the best trading mentors on the planet.
Apply today … but fair warning … not everyone who applies is accepted. If you’re lazy, unwilling to commit the necessary time, or not prepared to work your butt off … don’t bother.
[**Students’ results are NOT typical. Roughly 90% of traders lose. Always remember trading is risky, and never risk more than you can afford.]
Chat Room Comments from Market Mastery 2020 Mega Webinar
On January 16, Huddie and I did an all-day webinar — Market Mastery 2020. We traded live and answered questions from the Challenge chat room. Here’s a small sample of the feedback we received from participants….
10:05 AM jupiter6man → timothysykes: these are invaluable videos..live…I am not trying to pick your brain you are freely dispensing knowledge in free form this is like a CLINICAL.
10:22 AM Mk12 → timothysykes: Great webinar…thanks gurus!!!
10:39 AM chrislife101 → timothysykes: What im noticing and what all of us should notice is that Tim and Huddie and both seeing charts that are moving… and they don’t give a [expletive deleted] about them because its not their setup. […] To me, that is the best example of a disciplined trader, this is what i need to apply to myself today and for the rest of my trading career.
02:46 PM RaritanKnight → timothysykes: Just wanted to thank you and Huddie for today. Next week is my last week in the Challenge and I really appreciate all the help and knowledge over this past year. […] your teachings have saved me from trading foolishly and losing $1000s and from potentially wasting hours of learning the wrong information. Wish you continued success with Karmagawa.
03:28 PM CharlieTango → timothysykes: Hey Tim. When I first started out, lost a lot of money just chasing stocks. Your teachings eventually kicked in after enough losses and now I am very very very selective with my stocks and don’t trade mid day. Thanks for being that hard a** drill seargent. LOL.
04:00 PM therealmcdougal → timothysykes: definitely awesome webinar! Loved it, super helpful.
04:00 PM CrazyWillows → timothysykes: WOW that was incredible!!!!
What do you think of the two patterns working for me now? Comment below, I love to hear from all my readers!