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Trading Recap

Was This Trade In WKEY Too Simple?

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Written by Timothy Sykes
Updated 5/22/2023 6 min read

People always throw shade at me on social media because I trade penny stocks.

They believe I should be trading “real stocks.”

But here’s the thing.

I’ve made over $7.4 million in trading profits from penny stocks. 

Why would I abandon what works for me, and instead trade “real stocks” and compete against the world’s hedge and quant funds?

Are you getting into trading because you want to make money or are you doing it as a for-fun hobby?

At the end of the day, I want to be competing against weak, overly emotional, and inexperienced traders because I feel like that gives me a better chance at winning.

But that’s just the starting point. 

To really boost my odds at success I also want to focus on setups that I believe have a strong likelihood of working out.

Like my trade last Friday in the ticker symbol WKEY.

I’m going to share with you what I saw in the trade and why I believe I’ll be able to score more winners with it.


I Prefer Simple Vs. Hard

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I like trading penny stocks because I believe they are predictable at times.

What I mean is…human psychology doesn’t change much. And the way that penny stocks and penny stock promotions work is something that can be learned, in my opinion.

I’ve taught this process to all of my top students, who have made trading profits of seven and even eight figures.

There’s nothing glamorous about penny stocks.

Most of the companies that are publicly traded penny stocks are complete trash.

But that’s not why I trade them.

I trade them because I believe they offer the best opportunities to grow a small account. It’s what I did to grow my small account into seven figures.

And it’s how I still trade…teaching my students how to build an account by trading small and utilizing my penny stock trading strategies.

Focus On Easy Setups Like WKEY

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On May 15th, I got into the ticker symbol WKEY after seeing this tweet:

It’s what I call legitimizer news.

That’s when a small-cap company can connect itself with a larger, more popular, and profitable business.

While not too many people know about WISeKey…

EVERYONE knows who Elon Musk is and his companies, SpaceX and Tesla.

I bought WKEY at $2.60 per share, and before you knew it…I was getting out at $3.56. A gain of nearly 40% in just a few minutes…

We still have a few more trading days until the month is over, but that was one of my best trades of May.

Fast-forward to Friday, and guess what?

WKEY was in the news yet again…

And according to the press release, the company will launch satellites with SpaceX.

I did not catch the trade when the headline was made.

Usually, when the headline hits, the stock will spike instantly.

In other words, you have a small window to catch the breaking news.

I’m not always at my screen when news like that hits…so I have to patiently wait for my entry.

Personally, I thought the catalyst was huge. But maybe because it was Friday, it was being overlooked.

I decided to take a position later in the afternoon.

It’s how I trade my weekend strategy. 

I felt like it was a good opportunity to get long with the stock down significantly from its earlier highs.

So I bought 1500 shares at $3.37 late in the afternoon last Friday. The plan was to get out for profits of 15-30%.

In less than an hour, I was selling out of most of the position, closing out 1000 shares at $3.94.

Normally, I would sell the entire position. But as I said, I really liked the news and thought the story was overlooked.

Then why sell any?

Two reasons.

First, a lot of times, companies will use PRs to pump their stock price up. Once the stock has been pumped, they will try to raise capital by selling shares.

Second, Elon Musk is very active on Twitter. He could always come out and refute or downplay the story.

That’s why I decided to take some profits.

I decided to hold onto the last 500 shares to see what happens on Monday.

The stock was relatively flat on Monday morning…so I bailed on the rest of the position at $3.53.

I will keep the stock on my watchlist for the rest of the week.

Final Note

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You can make trading as complicated or as simple as you’d like. I prefer to keep things simple. And that’s why I stick to trading penny stocks.

One of my favorite catalyst plays to trade is the legitimizer.

Using a tool like the StocksToTrade Breaking News Chat can help you find plays like WKEY.

If you’d like to test it out and see how it can help you unlock new trading opportunities, then check this out. 

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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”