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Is This The Best Time To Trade?

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Written by Timothy Sykes
Updated 7/21/2023 5 min read

July has been a lot better than I expected…

Nailing 8 out of my last 10 trades…

This is a market that ALL of you should be looking to take advantage of…

And it’s critical that every trader knows what to look for every day they trade.

That’s exactly why I remind all of my students what I’m watching and what they should keep an eye out for.

I want every single one of you to be successful when it comes to trading…

So as we head into a new trading week, here are a few things you should really keep in mind.

Short Squeezes

Short sellers are the worst…

Every day I see them in these chat rooms and all they do is feed off one another’s negative energy…

Trying to find that next “big” stock they want to short in hopes to make people’s lives miserable, just like theirs.

They are like a cult…they believe anything they hear and will band together, attempting to bring the stock to zero.

But the truth is…

I’m glad they are so naive because, over the last several weeks, they’ve been flooding us with opportunities!

When they get too aggressive, you get some of these most amazing short squeezes…

Here are just a few examples.

  • GreenPower Motor Company Inc. (NASDAQ: GP)
  • Recursion Pharmaceuticals, Inc. (NASDAQ: RXRX)
  • Knightscope, Inc. (NASDAQ: KSCP)

Short squeezes can be tough to find if you don’t know what to look for…

That’s why I call them out for my challenge students so they can see these stocks spike in real-time.

When you have stocks that are getting squeezed higher and higher every day, it’s a big reason why I’ve been able to nail so many of my trades.

So as you start to spot these stocks spiking, make sure you think about this…

What’s working

Take a second and ask yourself…

What’s working for you?

We’ve been seeing a lot of Breaking News Plays and short squeezes that have been sending these stocks soaring higher…

And as I remind my students time and time again not to chase them…

But to focus on a setup that fits your overall strategy… and right now these morning panics have been red hot…

Take a look at Applied Optoelectronics, Inc. (NASDAQ: AAOI)…

Source: StocksToTrade

This multiday runner has been running like crazy over the last several weeks…

And with it still trying to go higher, we know one thing will eventually happen…

It will start coming back down to earth, and that’s where we are seeing some of these most amazing dip buying opportunities.

If you happened to miss this one dip buying opportunity there is some good news…

I don’t think this stock is done just yet.

I think there could be more opportunities in the coming days as this stock still has yet to break through a key level…

And you shouldn’t be just fixated on AAOI…

With all of these stocks getting squeezed higher, or soaring off of Breaking News….

You need to be prepared.

So ask yourself, what strategy are you looking to use?

I’m going to stick with my bread and butter, dip-buying, as it’s been working for me in this market…

More Breaking News

And no matter what strategy you pick, be sure you all remember to do this…

Cutting Losses Quickly

I’m still recovering from my $27K loss one step at a time…

And even though I’ve managed to make a lot of it back so far this month…

I’m still trading small and looking to lock in these quick profits…

But I’m also being very picky with my trades.

I know that if I’m not, that can lead to me overtrading and that is one of the worst things you can do as a trader.

I know that if I want to continue to profit on 8 out of my 10 trades, I need to be selective…

And if I can keep my losses smaller than my gains, I’ll hopefully wipe away my $27K faster than I hoped for.

Let’s face it, trading isn’t easy and I only want you to trade the best setups possible…

If you find a StocksToTrade Breaking News Play, be sure you know what to look for…

But with any of these penny stocks, it’s important to understand they won’t run forever…

That’s why I typically look to dip buy any of these overly extended stocks.

Keep studying, keep practicing, and make sure you’re focusing on any big percent gainer.

It can be for the day or multiple days, but that’s a starting point for any potential trade…

And then you can ask yourself, why is it spiking, and what your next play should be.

I’ll see you in chat.

-Tim

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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”