timothy sykes logo

Penny Stock Basics

When To Dip Buy vs. Not Dip Buy

Timothy SykesAvatar
Written by Timothy Sykes
Updated 2/2/2021 17 min read

When To Dip Buy vs. Not Dip Buy

It’s fitting that my last blog post of 2017 be about when to dip buy since it has been far and away my most successful strategy …watch 400+ video lesson on dip buys here and also read this MUST READ blog post “Try This Every Morning And You’ll Make Money” to learn how to best dip buy panics so you can be FULLY prepared for when they come about.

My hottest Trading Challenge student this year was Roland Wolf, who I profiled here when he was just passing $100,000 in profits and in this video below:**

…and he LOVES dip buys too, his last trade of 2017 was a classic dip buy into an OTC panic which netted him roughly $5,000 in profits, bringing his year-to-date profits over $500,000 after starting the year with just $4,000:**

That’s right, he made over 100x his money in 2017 alone, not with anyone big win, just taking it one trade at a time like I always preach and now he is one of my top Millionaire Trading Challenge students in terms of profits and he’s been one of my most dedicated/hardest studying millionaire trading challenge students even before he began growing his account exponentially.**

There’s no way I can guarantee you profits, but there’s a DIRECT correlation between your odds of success and likely profits and how much you prepare/study ahead of time…

So watch my latest video here on dip buying (and see the transcription below for my valued deaf Millionaire Trading Challenge students) and use tomorrow’s stock market holiday to study up too!

The Video Transcript

Post image

Get my weekly watchlist, free

Sign up to jump start your trading education!

Hey, Tim Sykes here. It is the weekend. I know you want to be lazy, I know you don’t want to study, but just let me give you one little tip, just taking it very easy this weekend because a lot of you guys are asking me about my take on bitcoin.

And right now bitcoin and cryptocurrencies are fitting a very well-known pattern that I deal with penny stocks all the time. So I wanna make a quick little video.

I should also mention we have this holiday sale going on Profit.ly. Roughly 36 more hours from the time I publish this video, all these guides, all these newsletters. If you ever have any questions about the patterns that I trade, the patterns that my top students trade, we share it all.

It’s not just about our profits, it’s about studying the past and adapting. If you’ve ever seen my “How to Make Millions” guide, which is 35 hours, which is required watching, it all goes to charity or “Trading Tickers,” which is my top students, Tim Grittani’s trades. He actually just uploaded his December trades. He made another roughly half a million.**

So he has made $1 million in the past 2 months.** Now he’s at $5.8 million, starting with just $1,500 6 or 7 years ago, I forget which one.** But just to show you the potential of these patterns and the potential of studying. He also has nearly what? Thirty-five, 40 live trades in this DVD.

And I’m working on these two new guides, “Trader Checklist Part Deux” and “PennyStocking Framework Part Deux.” They will be out in the next 10 days. January 10th is my goal.

Very excited because I’m gonna be talking about a lot of the patterns that are working right now with bitcoin and cryptocurrency. And it’s getting insane past few months. This is probably the best 2 months that I have ever seen, going back all the way to when I started in ’98, ’99, 2000.

You know, when a company announces that they are going into bitcoin or cryptocurrency, it is very similar/exact like when in 1999 companies used to add a “.com” to their name and the stocks would double, triple, quadruple in a few days. We’re seeing the exact same stuff.

And I just made…what did I make yesterday? Oh, yesterday I actually didn’t even trade.

The day before, I made $5 grand, the day before that, I made $2 grand.** Some days I don’t trade, but I am overwhelmed by the number of plays right now. And if you ever want to be prepared, especially…and you wanna take advantage of this holiday, long holiday weekend because the market is closed on Monday, please, please, please get these guides and watch them and study up.

Use the weekends. “Trading Tickers,” “How to Make Millions,” “Pennystocking,” “Pennystocking Part Deux,” and “Pennystocking Framework,” these are all required watching. And Spikeability, too.

Not enough for you guys who’re watching this. And then I have these two new guides. And then also, you know, we have all these different newsletters with literally thousands of video lessons cataloging every single chart. So bear that in mind when I go over this one chart pattern.

This is Bitcoin. It is down nearly 20% today. A lot of you guys are freaking out because it dropped from roughly $20,000 down to like $12,000, and then it bounced to $16,000, now it’s back down to $12,000.

My inbox is flooded with people saying, “What do I do now?” This is consolidation, okay?

You can’t expect bitcoin to go up to $100,000 with no consolidation. I know some bitcoin bulls are like, “This is just a dip, buy now.” Well, hold on for a second.

Because I just saw this tweet from one of my students,

Miah, just a random tweet. And, you know, he doesn’t even have that many followers. I just saw this because it is so applicable to Bitcoin right now. This is from one of my guides. I don’t even know which one.

You know, if you watch “Pennystocking Framework,” this specific chart pattern is outlined over and over and over again.

Where you have this kind of ridiculous run-up, and then a crash, and then a little bit of a bounce. This is kind of what Bitcoin is going on right now.

And with penny stocks, you get the ridiculous run-ups. I mean, they’ve manipulated run-ups.

This is like a boiler room pump, and then you get to crash when the boiler room stops promoting it, and then you get a little bit of a bounce, but usually, the little bit of a bounce fails and it comes right back to its lows.

This is just one example. I have thousands of examples, but it was funny that this guy tweeted it to me, so I’m gonna use this. This kind of morning panic pattern I really, really love, but you have to understand that most of the time the bounces fail. And obviously with penny stocks, you know, they’re being pumped by boiler rooms, it’s not a, you know, apples to apple comparison with bitcoin because Bitcoin is not necessarily being pumped by boiler rooms.

It’s being pumped by thousands of newbies who don’t understand, you know, consolidation or crashes or how to play it safe. But at the same time, Bitcoin, you can make the case that maybe this is just a dip and maybe it is gonna go higher.

What will I tell all of you newbies and all of you Bitcoin bulls is to be careful, okay?

Very similar to a penny stock pump, when it has this kind of ridiculous run-up and a quick crash and then a failed bounce, you usually have another crash. And, you know, today,

I mean, this thing trades over the weekend so this thing is live trading right now as I’m doing this, is down 16%. I know a lot of people who are dip-buying thinking that this thing is gonna go back to $20,000. I want a bigger crash.

Now, understand, I could be wrong. I only trade Bitcoin-related stocks. I haven’t actually even traded Bitcoin itself, but I have made quite a bit of money, you know, roughly 6 figures off of Bitcoin-related stocks in 2017, so I know the patterns. And several of my top students also trade bitcoin specifically.

And one of my former students, who I’ll do a profile on in 2018, has made millions of dollars trading Bitcoin. And he has told me a lot, that basically, it’s the same kinds of patterns as penny stocks.

So what I would say to you permabulls and people who think that Bitcoin is just gonna go to $100,000 or $1 million, just be careful, okay? You’ve had a massive, massive, massive increase.

And to those of you guys who missed out on that massive increase and now you’re thinking about, “Oh, I need to get in,” you don’t necessarily need to chase. You don’t need to have FOMO, fear of missing out. For me, I will dip-buy this. I don’t mind buying Bitcoin itself or trying to in 2018. I prefer stocks, but I don’t mind trying new strategies. And what I will say is that I am not buying right now because this is a very similar pattern with penny stocks, where you have the big drop and then it just keeps going.

You know, this is…it had a chance to bounce in the past few days, and you see it kind of did.

You know, it dropped down to like $12,000, bounced back to like $16,000, and then came down again. And now we’re cracking the low. So this is a very, very bad case short-term for Bitcoin.

I’m talking about the next few days. I don’t know if it breaches below $11,000 or $10,000 or $8,000.

The lower it goes I think the better because it’s healthy for a market to go, you know, up a lot and then down a lot and experience that volatility. Now, I have no bias whatsoever.

I could care less if Bitcoin goes to $50,000, I could care less if it goes to $1,000. I like volatility. And if you’re studying volatility, you know that this kind of failed bounce usually leads to lower prices.

If I’m wrong I miss out on maybe a 20%, 30 % bounce, but if I’m right then that gives me the opportunity to have patience and wait for a better play.

I’ll give you an example of a stock the other day that I really kind of nailed. It’s got a weird… what is it? FMR…these weird tickers. Yeah, this was it. So this had a super spike too.

This is what I call a supernova. And for me, I missed out on the run-up, very similar to Bitcoin. And you can see here, I mean, this is penny stock volatility. Like, each one of these represents one day. So this is one day, two days, three days, four days. On the fifth day, you’ve got a big morning panic, from $1.75 down to $1. And I actually caught this nice little dip here at around 95 cents, selling it for a nice little 25%, 30% gain on the bounce.

But here again, you see this crash and you see a bounce and then you see it kind of lower. This stock most likely will go back under $1 in the coming days, very similar where you have these kinds of failed bounces. And this is straight at out of “Pennystocking Framework,” this specific pattern.

And then, you know, here’s another one, WNDW, same kind of ridiculous volatility. I’m sorry that my internet is slow. I’m in Mexico. And here, you know, you have this ridiculous run-up and then you have a big panic and then followed by the bounce. So this is very similar to what Bitcoin is doing right now, where you have this crash and you had the bounce and now we’re at the lows.

Usually, this leads to lower prices in the next one, two, three, four, five days. We’ll see if that works with Bitcoin. I would love to see a greater crash. But the cool thing is that I can wait for a trade to come to me. I miss tons and tons of trades. WNDW I was actually a little too early, but this thing did bounce $2 a share, so I was on the right track.

Even if I miss a trade, I am not angry because I am specifically waiting for prices to come to me. I’m waiting for the opportunity to come to me that increases my odds of success.

I think of myself as a retired trader. I only come out of retirement and I only will trade if I see a play that is so good that I will feel guilty missing it. And I know that sounds complicated. I know people are like, “Tim, just give me a good pick or a good pattern.”

You have to think backwards. That is what makes trading so tough. Ninety percent of traders lose because they just go based on gut instinct. They go based on a plan. For me,

I want the trade to come to me. I don’t have to trade, I don’t wanna trade, I don’t look forward to trading, but if the pattern is so good, again, this is because I know the patterns and I back-test it and I have experience, then I will trade it because sometimes it’s just easy money WNDW, I cut losses quickly.

I had a small gain, small loss, doesn’t matter. FFRMF, you know, making 30% on my money because the stock had a perfect panic like this.

And so, that’s what I tell everybody asking me about Bitcoin. Do not fear missing out on a bounce.

Do not fear missing out if it goes back to its highs. Let the patterns play out. And if you don’t know what the patterns are then you really need to study, because these patterns work not 100% of the time, understand this is not an exact science, but they work more times than not. And that is part of the key to my success, waiting for trades to come to me. I don’t have to trade 20, 50, 100 times in a day where I make like $20, $50 here or there. I wait for the best plays.

Let me just show you my trade. Out of all my recent trades, it’s not even just about the money, it’s about the patience. QIWI, I mean, I nailed that in the 14s, it went to the 17s. I was way, way, way too early, sold too soon. This play is probably my best play in recent memory.

You know, nailed it. And I actually highlighted this in my chat room before I bought. I said, “Watch this panic playing out potential dip buy.” I linked to this whole pattern. You know, I have a whole blog post on this, and I have 400 video lessons on dip buys and morning panics. So this was a morning panic on ZPAS, and then I feature, you know, tons and tons of panics. Here was CATQ, here was CNAB, here was EMMD. So I love these kinds of panics, and I love these bounces. I mean, these are 50% bounces. So this was a fantastic bounce on FFRMF, but notice how the bounce failed. And so far it’s just been one day after the failed bounce. This is the exact same thing that is happening with Bitcoin right now. So just be careful.

And for me, I missed out on the dip-buy opportunity I guess, on Bitcoin, you know, when it dropped from $20,000 to $12,000 and then it bounced to $16,000, but now here we are back again on $12,000. And I just wouldn’t…I wouldn’t do anything because it had its chance to bounce and it failed. And now that leads me to believe, given the ridiculous run-up, that it should see lower prices. And guess what? If I’m wrong, so be it. I would love to be wrong. I don’t fear being wrong, that’s what makes me very different from most people in finance, where a lot of people are like, “Oh, you said this, you were wrong. You said this, you were wrong.” So what? I’m wrong all the time. It’s okay to be wrong. It doesn’t cost you anything if you don’t take the trade. And even if you are wrong, if you do take the trade, you can cut losses quickly, like I did on WNDW where I was too early trying to get the bounce and I lost a little. It’s okay to lose a little, it’s okay to be wrong, but the key to success is waiting for the plays to come to you, waiting for the patterns to play out.

And so while we’re waiting what you can do is study. What you can do is prepare and be ready. Too many of you guys, if you had the perfect play tomorrow, you’re not ready because you haven’t studied the past. This is why I’m so excited about this sale. It’s only gonna last another few days. There are no extensions. You either wanna learn or you don’t. But the reason why I’ve had success, the reason why my top students have had success is due to studying.

Let me just show you one more guy. Roland Wolf, my top Trading Challenge student right now in 2017, turned $4,000 into $500,000-plus.** He loves this too. This was his last trade of 2017, same exact kind of crash. And this was a bounce on PHOT, okay? He started with $4,000 this year and now he’s over $500,000.** He waits for these panics. And if you look it’s really small. He made roughly $5,000 on the dip-buy on PHOT.** Look at this. He was buying it right here, the little green arrows, and selling it all in here. That is fantastic. That’s what I want for you guys. So study up, take advantage of the holiday sale and wait for the plays to come to you.

And if you understand this lesson, please do leave a comment underneath saying, “I will have patience.” Four words, okay? This is gonna change your life. If you wait for these panics, if you wait for these opportunities instead of forcing it, you will change your life over time. See the link just below this video. I’ll link to the holiday sale, I’ll link to the blog post about these kinds of dip buys, and I’ll link to my 400-plus video lessons on these panics. Wait for them. Thank you. Happy holidays.

supernova placement

How much has this post helped you?

Leave a reply

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”