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Penny Stock Basics

Yesterday’s +100% Spiker

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Written by Timothy Sykes
Updated 1/18/2023 4 min read

When you trade the type of stocks I do, it’s not uncommon to see a stock rip 100% or more in a single day.

It usually happens at least once a week, and when the market is rocking, it happens a few times a day.

Right now, OTCs are pretty dead.

However, there’s a lot of action in listed stocks, primarily due to the January effect…beaten up names like APPH, FUBO, BBBY, and PRTY have all caught a bid.

Today, I want to talk to you about a 100% mover from yesterday’s session. I didn’t take the trade, but it serves up plenty of good lessons that I believe can help you navigate the current market environment.

The Monster Move In Celyad Oncology SA (NASDAQ: CYAD) Explained

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The first reason it caught my eye … at 4 A.M. it spiked +280%.

If a stock can spike that high in premarket, there’s usually more juice in the tank.

Plus, it’s a cell therapy biotech play. Biotechs are notorious spikers. Especially if they’re related to something serious like cell therapy and cancer.

Here’s a chart of the whole move…

There were multiple opportunities to enter this play …

First when it double-bottomed at $1.20, second when it pulled back after a spike past the open price, and third when it consolidated before the final push of the morning …

Anyone who bought at the first opportunity had the chance to profit +100% …

When there’s that much volatility, the stress level is off the charts for traders that aren’t disciplined …

That’s when they panic and get predictable.

And that’s when I profit.

In order to find volatility like this, I scan for very specific stocks.

They need to have …

  • A price below $5
  • Recent news/catalyst for movement
  • High volume (at least 1 million shares traded on the day)
  • Proven volatility on the day (the price has spiked at least 20%)
  • A history of spiking

After that, it’s all about the wait …

Stake Out

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These tickers move up and down all day long.

If you buy in at the wrong time, you could subject yourself to the same market-induced stress you’ve been trying to trade.

That’s where the patterns come into play.

We wait until the chart matches a popular pattern, we buy safely above support, and we ride the momentum to profits or a small loss.

I say a small loss because any trade can fail.

It’s all part of staying disciplined. If a trade starts to turn sour, I always cut the loss.

It’s easy to get back in later for another trade. And I definitely don’t want to get stuck holding the bag.

This is my favorite pattern at the moment …

And remember, these trades are quick.

The goal is to be in and out for a cool 10 – 20% profit in a few minutes.

After the trade, I sit safely in cash and wait for the next one.

It takes a bit of time to get the hang of. But anything worth having never comes easy.

Mark Croock knows that better than anyone. He’s one of my millionaire students.

After a few years, he’s managed over $3 million in profits.

And tonight at 8 PM ET we’re sitting down to discuss his most recent strategy LIVE.

The sign-up is right here.

Don’t miss this event!


— Tim

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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”