Last week was a good reminder that as the market shifts…
Patterns you’ve grown accustomed to might not work as well.
At the same time, old friends come back to life.
For example, my old favorite, the morning panic dip buy, had me doing this…
Jumping for joy over my favorite pattern.
I cannot deny, I LOVE a classic morning panic dip buy.
Just remember that in a nasty overall market you MUST be safe.
And that means following rules…
Following rules now can save you from losing months (or even YEARS) of progress.
With that in mind, for AT LEAST the next few weeks (until October is behind us and the midterms are over), I plan to follow these rules…
Rule #1: Trade With Caution
Even if it means missing out on potential plays. I said last week that a market crash is possible…
Some traders laughed. Maybe it’s yet another case of me being too conservative.
I’m fine with that, okay?
I will err on the side of caution again and again. The reality is, I have good rules and a lot of experience.
Maybe I trade too cowardly. And I agree that I don’t have that same killer instinct as when I was young.
But I have seen SO many traders get destroyed because of their ego and aggression.
Mind you, it can happen on one or two plays, right?
You can be right for a decade, decide to go all in, use leverage, and…
BLOW UP.
Which brings me to…
Rule #2: Do Not Use Leverage As a Beginner
Here’s a quick story…
Every summer I invite traders out to a villa in Positano, Italy. It’s always great.
Source: Millionaire Media
Some of my millionaire students get the chance to meet friends who have made much more than me.
I’m talking about traders who’ve made $100M or $200M.
They’re mixing with my students who have made $1M, or $5M. Or, with Jack Kellogg, who’s made $25M.
Going into this past summer, markets were down. A lot of people were in drawdowns. Everyone was saying, “Oh, I blew up.”
My traders were talking about being down 10%–15%. And that sucks, but it’s not blowing up. It’s losing a few hundred thousand dollars.
Those big traders put things into perspective. Some of them were down $5M, $10M … even as much as $50M or $75M.
They weren’t down 10%. They’d lost 40%–50% of their net worth.
So, even though they had higher highs, they had lower lows.
A lot of that had to do with using leverage.
So, for 99% of people, using leverage is completely unnecessary. You don’t have to use leverage to be successful. Especially if you’re a newbie.
Here’s another one for new traders (if you haven’t been trading for three to four years, you’re still new).
Rule #3: Be Patient and Selective
When there are fewer trading setups available, one of the WORST things you can do is overtrade.
When there are no big percent gainers, don’t force it. You can still look for trades and be opportunistic.
But wait for the play to come to you. Know exactly what pattern you’re looking for and be sure it fits your strategy.
Remember, the market doesn’t care what you want. So, be selective.
Rule #4: Study and Understand Basic Technical Analysis
You don’t have to use a bunch of technical indicators. I use support & resistance and VWAP. I pay attention to volume and price action.
That said, you DO have to understand the basics.
For example, last Thursday (October 15), I traded SciSparc Ltd. (SPRC) after it spiked on AI news.
But unlike most of my recent trades, I waited for the market to open because the overall market was down that day.
The best part of the trade was buying right near support on a stock that was already spiking (even though the whole market was dipping).
You can clearly see the $4.10 support level on the chart below. It held until the afternoon when it cracked (HARD)…
Source: Stocks To Trade
SPRC 10/15/26, 1-min candles, support.
Right near the open, I’m always looking for dip buys. But ESPECIALLY when there’s panic in the overall market.
We haven’t seen much in the way of dip buy opportunities this year, so it was nice.
Which leads to…
Rule #5: If You Nail the Entry, the Rest of the Trade Is Easier
Even though I was WAY too cautious, I was really happy with my entry…
Source: Stocks To Trade
SPRC 10/15/26, 1-min candles, morning panic dip buy.
I was happy to lock in the single.
Regardless of what’s going on in the overall market, nailing the entry helps.
In a market like we saw last week, it will save you a TON of frustration.
Understand that you won’t always nail the entry, but you ARE in control of whether you chase.
You ARE in control of knowing where there’s support and resistance.
So, you might be wrong sometimes, and that’s fine. But don’t let emotions draw you into a trade where it doesn’t make any sense based on the chart.
Rule #5: Stay Within Your Personal Strengths
There are times to test new strategies, and times to stick with what you’re good at.
Which means you have to KNOW what you’re good at, right?
For example, I’m NOT good at holding through choppy plays like Netcapital Inc. (NCPL) the first part of last week:
Source: Stocks To Trade
NCPL 10/12/26 to 10/15/26, 1-min candle, choppy uptrend.
I traded it a few times, but it was tough.
That is, until Friday morning when NCPL had a CLASSIC morning panic…
Source: Stocks To Trade
NCPL 10/16/26, 1-min candle, morning panic dip buy.
Again, we haven’t seen these kinds of plays for a while, but back in the day it was my favorite pattern.
So, it’s good to see them come back (even though it means we may be in for a big crash).
Whatever happens in the coming days and weeks, be sure to follow…
Rule #7: Focus On the Process
Whether it be premarket, regular hours, or after hours, there are ENDLESS plays to learn from.
But you MUST keep your wins bigger than your losses.
It’s all about the process and not getting greedy. It really is that simple.
Focus on the process!
How to Win in the Stock Market
These are exciting times.
Whether we get a crash or bounce to new all-time highs, try to capitalize on all the plays.
Trade small, take profits into strength, and once you lock it in, don’t look back.
Have a great week and let’s CRUSH it!
If you have any questions, email me at SykesDaily@BanyanHill.com.
Cheers,
Tim Sykes
Editor, Tim Sykes Daily
