timothy sykes logo

Penny Stock Basics

10 Lessons From My 2 Best Dip Buys of The Past Week

Timothy SykesAvatar
Written by Timothy Sykes
Updated 1/9/2023 8 min read

I recently got this email from one of my Trading Challenge students:

Tim,

I feel you gave me the secret decoder ring this week. I saw the pattern, I didn’t trade it, but I am finally seeing the tip of the iceberg and it is glorious. Loved your comment in PennyStocking Framework Deux: “… Are you good at Tetris is more of a concern for me.” hahaha!

Please continue being “cruel to be kind.” 

Thank you,

– Len

What is the secret decoder ring Len is talking about?

Well, it’s this pattern that played out again and again and again this week.

In fact, I have over 650 video lessons on this one pattern here because it’s my single favorite pattern in recent years that has helped made my top students and I seven figures, just a few thousand dollars at a time.**

Seven figures, a few thousand dollars at a time? What does that even mean?

Well, take a look at my two trades this past week on this one pattern …

I nailed the intraday bottom on CVSI both times, sold too quickly both times, but still made roughly $10,000 between the two trades, leaving roughly $30,000 on the table had I taken the whole bounce instead of just a fraction of it.**

So, that’s lesson #1: You don’t need to take the whole move, or even a majority of the move, to profit nicely on morning dip buys.

Lesson #2 is from my Trading Challenge student, Len, who actually missed the play but still witnessed it and learned from it … that’s a HUGE step in the right direction, as these morning panics happen again and again and again.

See this video lesson and this video lesson and this video lesson, too.

So lesson #3 is this: It’s not a question of “if,” it’s a question of “when” the next one will be — and how well or poorly prepared will you be when it does happen?

More Breaking News

As I’ve said on far too many webinars (remember, my Trading Challenge students receive 2–4 live trading and Q&A webinars each week from me and several of my top students), 99% of my students are unprepared for the next great play …

So while everyone whines about a lack of plays during slow markets, instead they should be grateful because a slow market gives them time to catch up, as this game has been going on for decades, even if most students are just learning about it in the past few months or years.

Lesson #4: You cannot over-prepare enough. But FAR too many traders are unprepared, whether they don’t know the pattern, aren’t ready for it with the right broker (see my favorite brokers here), don’t know the proper position size to take, don’t realize how quickly the bounces happen, etc. 

So it’s not a coincidence that if you follow me here on Twitter or here on Instagram, my central theme every single day is to “study hard” with “no days off,” as preparation is the key to increasing your odds of success on future plays.

Lesson #5: Yes, a few thousand dollars at a time multiplied by thousands of trades DOES add up to millions of dollars over time, especially if you follow rule #1 and cut losses quickly on the times you are wrong.

And remember here that NO pattern works 100% of the time, so you will be wrong sometimes. And it can happen on any trade, so don’t EVER get too cocky, bet too big, or refuse to cut losses quickly due to your own ego or stubbornness.

Lesson #6: Patience pays off. If you try to trade random patterns every day — like far too many traders do — you will get random results. You’ll also get a ton of unnecessary work, become frustrated that “trading is so hard,” and you’ll probably end up losing like most traders do.

So, why not listen to someone with 20 years of trading experience and now 10+ years of teaching experience?

Lesson #7 is, sadly, due of all the many fakes in my industry: There’s still a lot of hate and doubt when it comes to listening to my instructions

I have a small squad of moron haters who don’t realize that it’s in my best interest to create the most successful students possible, as that’s what brings me the most joy and fulfillment.

It’s also best for my fast-growing educational business, as it’s good to be real in an industry full of fakes and frauds who teach flawed — and ultimately, dangerous — techniques to newbies who don’t even realize the consequences yet since they’re just starting out. 

Lesson #8: I will repeat the same lessons over and over and over again.

Why? Because this isn’t rocket science. The same patterns repeat. If you study enough of my now 5,600+ video lessons, you’ll see that even the same penny stocks are often in play — so the sooner you learn these lessons, the sooner you’ll be ready to start potentially profiting from the patterns, and eventually won’t need me anymore
And if you’re like some of my top Trading Challenge students, you’ll get annoyed how often I repeat myself and probably dislike me (which is fine because I’m not here to be liked; I want to teach you the basics and be your “training wheels,” then you’re free to discard me).

After a while, lot of people feel guilty that they don’t like listening to me repeat myself over and over again. But what they don’t understand is that I WANT THAT FOR YOU. Because once you feel that way, that means I’ve done my job teaching you to be self-sufficient and independent — like my top students. 

Lesson #9: Once you do get it, you’ll laugh at others when they hate on penny stocks.

I don’t want you to try to change their mind, I’m very grateful for all the misguided hate, as it keeps competition away and it allows these simple patterns to work time and again. So it’s easier just to laugh at those who don’t believe, and keep building your account a few thousand dollars at a time … just like my top students and I show every few days/weeks when a perfect pattern like this comes along. 

Lesson #10: It’s not enough just to know key support and resistance levels — you must learn to understand the patterns and the “why” of what creates them

That’s why I encourage you not just to watch my 650+ video lessons on dip buying, but also ALL 5,600+ video lessons, like one of my Trading Challenge students, Mark Croock, did three times — and he’s also responsible for tagging and categorizing them all here**

What daily “trading lessons” do you follow? 

How much has this post helped you?



Leave a reply

* 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”