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Trading Lessons

How To Find Stock Spikes In Time

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Written by Timothy Sykes
Updated 3/21/2024 6 min read
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We’re trading volatile stocks for huge potential profits.

There were two solid setups yesterday.

TruGolf Holdings Inc. (NASDAQ: TRUG) announced some fluffed up AI news during premarket: A new AI technology licensing agreement with company mlSpatial, an AI and machine learning business.

Take a look at this run, every candle represents one minute …

TRUG chart intraday, 1-minute candles Source: StocksToTrade

We don’t need to take the whole move. That’s a dangerous mindset. Instead, we focus on ‘predictable’ intraday price action.

Now, when it comes to the stock market, no one knows for sure what will happen next. But we can use popular patterns to build positions around the most likely setups.

I took 31% from yesterday’s TRUG price action. All because I had eyes on it early.

You can see on the chart above, TRUG only ran for a few hours and then sank lower intraday.

The early bird gets the worm.

I’ve got a process to find these plays before they go vertical.

Breaking News

I get an alert whenever there’s a stock that announces bullish news capable of spiking the price.

When the price starts to move, I know it’s time to plan a trade. One of the best strategies to use is a classic dip buy:

  • The stock spikes with bullish news.
  • I wait for a dip in the price action to buy shares.
  • Ideally, the stock pushes to new highs and I sell into strength.
  • If the stock pushes lower I sell for a small loss.

I’ll show you a chart … 

This was my trade from yesterday, starting stake of $4,832:

Source: Profit.ly

I was alerted when TRUG started to spike.

The price surged a bit and then started to dip.

I’m not buying at random when the stock dips. The few minutes of consolidation is key. It shows the sellers getting stonewalled by buyers. And it’s a sign that the price could push higher.

Look at my trade on the chart:

TRUG chart intraday, 1-minute candles Source: StocksToTrade

I only had a few minutes to build a position after the news was announced.

For other traders, that’s a huge issue. Because they don’t have access to Breaking News alerts.

Truthfully, left on my own, I would have missed this quick spike on TRUG.

I don’t have time to stare at my screen for hours on end every morning. Even if I did, there are a lot of stocks moving every day. Sifting through all the crap news to find a diamond in the rough takes a lot of man hours. Hours I could use to teach students instead:

Anyone can sign up for Breaking News.

I suggest you take advantage of this trading tool. I still use it and I just crossed the $7.6 million milestone. This is for beginners and experienced traders alike!

The Next Alert

TRUG wasn’t the only winner yesterday.

In this 2024 market there are profit opportunities all day long.

No more than a few hours after the TRUG alert, Breaking News alerted a spike on XTL Biopharmaceuticals Ltd. (NASDAQ: XTLB).

Take a look:

XTLB chart intraday, 1-minute candles Source: StocksToTrade

I snagged a profit from this runner too, my starting stake was $8,374:

Source: Profit.ly

There’s a new opportunity to profit every day. Stop missing out.

This is where I find the Breaking News’ runners.

It takes a lot of the grunt work out of trading. I don’t have to scour the market for hot news all day. Instead, I pull up Breaking News and wait for an alert.

This next part is important: 

If the stock doesn’t move after the news announcement, don’t touch it.

Nothing is a 100% guarantee in the stock market. Some of these Breaking News plays don’t spike higher. That’s to be expected. And it’s why we react to volatile price action instead of trying to predict it.

Let the stock jump a bit, then plan an entry based on the price action.

Cheers.

 

*Past performance does not indicate future results

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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

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* 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”