The overall market recently is a good reminder of just how important it is to focus on safety first.
I thought there would be a crash last Monday on the anniversary of Black Monday (I was wrong).
But I’m not convinced the danger is past.
Predicting crashes is a VERY inexact science.
But I can say one thing for sure…
We are SO overdue.
The point is, you must be vigilant and safe above all else right now.
Fortunes are lost by those who are unprepared during crashes.
Look, no trade is ever completely safe. Trading is risky. But everything I teach is about reducing that risk as much as possible.
It’s why I always trade cowardly and constantly repeat “trade scared, so trading isn’t scary.”
With that in mind, I’ve been doing my best to trade safely this week. And I’ve put together my top 9 lessons for you in this kind of market…
Safe Trading Lesson #1: Prepare Before You Trade Extended Hours
Try to be up at 4 a.m. ET. That’s when we have a lot of these runners.
I know it’s not fun. It’s laughable to me. But 4 a.m. is the new hot spot. It is what it is.
Remember, in December we’re going to 23-hour trading.
I covered what 23-hour trading means for you here.
So, this is just the start. But you have to practice for extended-hours trading. You can’t just jump in and expect to do well.
Start preparing now.
Safe Trading Lesson #2: Always Look for Former Runners
I’m always looking for former runners, right?
STAK Inc. (STAK) has been making some beautiful moves even though it was choppy…
Source: Stocks To Trade
STAK 10/21/26 to 10/22/26, 5-min candles.
One reason I was watching STAK is because it had a nice multi-day run in June. Always pay attention to former runners.
Source: Stocks To Trade
STAK 6-month, daily candles, former multi-day runner.
I traded STAK in the after-hours spike on Wednesday (October 21). Which brings me to…
Safe Trading Lesson #3: Dip Buys Are Back
One thing I’m testing right now is dip buys.
For years, the morning panic dip buy was one of my favorite patterns. But for the last couple of years, it hasn’t been working as well.
Why test now?
Because the overall market is ugly. Also, after-hours trading has been hot for me.
So, I tried a dip buy on STAK during the after-hours spike.
Source: Stocks To Trade
STAK 10/21/26, after-hours, 1-min candles, dip buy.
I got out for small gains. Why not hold longer? I didn’t want to be aggressive given how many failed spikes there were that day.
There’s another reason I was happy to lock in the quick single…
Safe Trading Lesson #4: Know What You’re Good At
I’m not good at $1 stocks. That’s nothing new. I’ve proved it to myself over multiple years.
I’m better at $2–$5 stocks. I thought STAK might be able to get back to $1.30, but not much higher.
Sometimes with $1 stocks you get that quick spike, and then they just fade and go back under $1.
Also, it was near midnight in my time zone…
Safe Trading Lesson #5: Know When It’s Time To Rest
I keep talking about 23-hour trading coming in December. And I encourage you to take advantage of extended-hours trading as soon as possible.
At the same time, you have to get rest. When I was in STAK, I was exhausted.
It’s stupid that I’m staying up past midnight every day and waking up so early for premarket trading.
But it’s where the opportunity is. So, I’m trying to do my best. To trade safely, recognize when you’re exhausted, okay?
Safe Trading Lesson #6: Expectations Are Key
I had a better trade on Tuesday (October 20) with XIAO-I Corporation (AIXI)…
Source: Stocks To Trade
AIXI 10/20/26 1-min candles, double top.
It was a nice 16% winner for me, but as you can see on the chart, it was a clear double top.
I sold it right near the top expecting exactly that.
So, I think expectations are key. We’ve seen a LOT of double tops recently.
Safe Trading Lesson #7: Focus On Risk-To-Reward
Even though the Nasdaq has been ugly the past two weeks…
Source: Stocks To Trade
QQQ 2-week, 15-min candles.
There are opportunities. But you have to focus on stocks with good risk-to-reward.
There’s so much reward IF you focus on the right stocks.
Yes, there is some risk. You’ve got to be real, right? But if you trade safely, you can navigate this market.
Which brings me to…
Safe Trading Lesson #8: Your Environment and Personal Schedule Matter
I had a crazy experience last week. Here’s where I was trading (check out the view):
This was one of my most perfect views ever.
Sadly, the outlets didn’t work. I push the laptop lifestyle so much that I guess it shouldn’t be a surprise. It was bound to happen eventually, right?
I was in a trade, my battery was at 3%, and I had to get out. I don’t want to be in a trade with my laptop dying, okay?
So, I got out of the trade and went to get coffee. By the time I got back, my trade would have been a big winner. But you never know.
So, it’s better to follow…
Safe Trading Lesson #9: Always Be Willing To Exit
This might be the most important lesson from all of my recent trades.
You never have to be afraid on any play.
If you’re willing to cut losses, you don’t have to be scared. Some people say, “It’s so scary trading these stocks, you can get crushed.”
It’s true, you can. But if you have your finger on the trigger and you’re willing to exit, it’s not scary.
Safe Trading is Key Right Now
One of the most important things to remember right now is that these are junk companies that we trade.
You’re not trading them for their long-term quality. You’re trading them for their short-term upside.
Yes, there’s big downside too. That’s why you MUST focus on trading safely right now.
Every trade, you’re trying to learn a little something good and bad. You’re trying to make adjustments.
Try to take advantage of these awesome plays, and see just how far they can go.
Stay safe.
If you have any questions, email me at SykesDaily@BanyanHill.com.
Cheers,
Tim Sykes
Editor, Tim Sykes Daily
