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Patterns To Watch

Use This Pattern And Finish Before Lunch

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Written by Timothy Sykes
Updated 9/14/2022 5 min read

I like to think of myself as the buffet of trading.

There’s a little something for everyone.

Whether you want to trade dozens of times a day or once a week, I’ve got something for you.

Because let’s face it – not everyone lives on the same schedule.

Half the time, I’m globe-trotting between my home base in Miami and building schools and homes in Bali.

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Check out my Instagram or Twitter and meet this family in Bali we’re helping put into a wonderful new home.

Spread awareness where you can!

Since I can’t sit in front of the computer all day, I focus on the times when the market provides the best opportunities.

And one of my favorites is the morning panic dip buy.

This is a great setup that many people can use, regardless of whether you have a $500 account or a $50,000 account, because it focuses on limiting losses and maximizing gains.

Let me walk you through an example trade I took in Ilustrato Pictures International Inc. (OTC: ILUS), where I used this pattern to walk away with a tidy little profit.

Morning Panic Dip Buys

If you had to buy a pullback, would you do it in an uptrend or downtrend?

Obviously, an uptrend is much easier to work with.

Small pullbacks in larger uptrends tend to get bought up.

The trick is to know when and where to jump in.

Now, I’ve written about morning panic dip buys in the past.

To start, I run a screener in the StocksToTrade platform.

I filter for tickers that saw increased volumes and decent gains recently. Ideally, they’re in multi-day uptrends.

Additionally, I use the Breaking News Chat room to identify news catalysts behind the move.

This team is an incredible resource for traders looking for the real headlines behind a stock’s move.

Plus, the team keeps tabs on chat pumps that can mess with premarket movers.

Keeping this in mind, here’s a taste of what I sent my mentorship students well before the market opened…


ILUS, NRBO, LGIQ are 3 low priced spikers worth watching for potential dip buys into any big morning panics, but I can’t just buy gradually uptrending or downtrending action and prefer intraday panics to chasing anything up too high. I made a little dip buying ILUS, but it was midday with no clear catalysts so I’ll look closer to the market open and ideally a news catalyst comes out too.


No joke, I sent this at 1:15 a.m. Eastern, which proves a point. You don’t have to be in the market every second of the day.

I, and plenty of my students, do our homework after the market closes when we have time.


Ilustrato Pictures International Inc. (OTC: ILUS)

Once I had the stocks identified, it was a simple matter of waiting for a pullback to the appropriate levels.

If you want to make things easy on yourself, our StocksToTrade platform comes with automatic support and resistance levels created by our proprietary algorithm.

You can see how well they worked in the chart below.

But let’s say you wanted to do this the old-fashioned way.

I find support and resistance spots by looking at the swing points and consolidation ranges.

Here’s what that looks like in ILUS.

I drew a yellow box around the closest consolidation area.

However, that wasn’t far enough away to really give a good pullback.

The next two white lines come in where the stock made a swing low on the one-minute chart.

That was far enough away to offer a nice sized pullback.

Ideally, I want to see the stock yank back in there quickly and then stop on heavy volume.

When you see volume increase and candlesticks go from long bodies to narrow ranges, it’s a sign that buyers are stepping up to purchase shares.

I also rely on signals I get from level 2 data.

I often let the stock show me it made a bottom before jumping in. That way, I’m not the first one in and I have a low to trade against, narrowing my risk.

And that’s a big part of trade management.

To generate consistent gains over the long-haul, I cut losses quickly and keep them as small as possible.

That’s why you’ll see my average win is much larger than my average loss.

Remember, trading doesn’t need to be complicated. All it takes is one setup to change everything.


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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”