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Millionaire Update: Reminiscing About My First 100K Trade

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Written by Timothy Sykes
Updated 1/4/2023 10 min read

Those were heady days — when even a freshman in college could make a 100K trade in a single day…

Back to Boston: A Trip Down Memory Lane

Recently I made a visit back to Tufts University. If you’ve read my book, An American Hedge Fund,” you know that’s where I had my first $100K+ day. It’s where I made my first $700K. And it’s where I took the entire dorm out to iconic Boston restaurant, FiRE+iCE.

(Get your free copy of “An American Hedge Fund. Once you get the book, read it from start to finish — it’s a real eye opener. If you absolutely can’t wait to read about my $123K day check out Chapter 6: Once in A Lifetime. )

So, while in Boston, I once again visited FiRE+iCE. We got lots of photos and videos. At some point in the future I’ll post a few. It was pretty cool to visit my old stomping grounds and reminisce about treating the entire dorm to a meal. (It’s all in chapter 6 of my book.)

It’s a great reminder how much trading has changed my life. And now it’s an honor to share my 20+ years of experience with the Trading Challenge. Apply today.

Let’s get straight to some questions…

My results are not typical. I’ve spent 20+ years gaining knowledge and experience. Be prepared to work hard. Most traders —  roughly 90% — lose. While losses happen to every trader, don’t let yourself become one of the failed ‘former traders’ who never got it right.

Questions from Students

The first question this week is about informational inefficiencies. It’s one of the biggest and best things about penny stocks

“What kinds of informational inefficiencies should we be looking at?”

Start with good news that people can’t act on right away. So if there’s good news at 3 p.m. — like at the conference with BILZF — most people aren’t gonna see it in the last hour. Instead, they’ll hear about it overnight, especially something like an Instagram story.

But it could be any good news that most people will miss…

The $123K profit I talk about in An American Hedge Fund is a great example. The positive news came out on a Friday. The company, Illinois Superconductor, put out a press release saying they were gonna be on TV. But not until Sunday.

My thesis was that 99.9% of people didn’t see the press release. Instead, they would first see the news when they watched TV. Sure enough, they saw the news on Sunday but couldn’t buy the stock until Monday.

The lesson: Start thinking about news, but not just in terms of breaking news. The beautiful thing about penny stocks is that people don’t have the opportunity to act on good news right away.

So, if you’re quick and meticulous

… you can get in when very few people see it. And you can get out for substantial profits when the slower, less meticulous people buy later.

This is different from big companies like Apple. If Apple has breaking news, everyone’s already covering it. Everyone’s seen it. There are no inefficiencies.

Next question…

“In Profit.ly commentary, you said… 

“‘With multi-week breakouts you usually have two opportunities to profit, the initial breakout and the support hold.’

“Would you please explain?”

Yeah, so you’re just looking for the initial breakout over the previous highs. Then, usually, the stock will come back down to the breakout level. If it comes back down and holds the breakout level again, you can get a bounce or another breakout right after that.

So you don’t always have to buy right away. Sometimes if you miss the first breakout it’s OK.

Also, sometimes the stock will come back down to the breakout level and fail. So the first breakout is a fakeout. Which means you can’t say all breakouts are gonna succeed.

Remember, this isn’t an exact science. As always, follow Rule #1: Cut losses quickly.

“Tim, it seems like a lot of people still want to cut costs using crappy brokers. You’ve talked about this a lot but will you please go over it again?”

Bad executions, missed opportunities … the list goes on.

Everyone wants to cheap it out. It seems everyone wants to put in less time to become a millionaire. They expect to put in less money, not pay commissions…

They’re focusing on the wrong thing. I just wrote about this last week when all the brokers announced commission-free trading. After you read this, read that post and check your mindset.

Too many people are trying to save $5 and $10 picking up pennies but missing the hundred dollar bills. So, for me, I’d rather students focus on this question…

How Do You Actually Get Rich?

It’s NOT by cost-cutting small, stupid, crap. You have to learn to think like a rich person. A rich person understands exponential growth. Poor people are always worried about trying to nickel and dime everything.

So they miss out on the big trends. They miss the potential for exponential growth while they’re busy trying to save 1%–3%…

Rich people are less fearful of missing out on small savings. We’re going for bigger stuff. 

Create a BIG Mindset

I would happily pay $1,000 in commissions on a trade that could bring in $10K.

A poor person would say “Oh, I would never pay $1,000 in commissions!” Why? Because they can’t even fathom making $10K on a trade. They have a small mindset.

That’s why the $123K trade from my dorm room was such a big deal for me. Yeah, the big win was great. But it went deeper.

In one day I made more money than some lawyers and doctors made in a year. As a freshman in college, it opened me up to the big dollar game.

That’s what I want you to focus on. I want you to have your first $100K or $10K day. Then you’ll realize it’s not about these ticky-tacky $5 savings. It’s BS that brokers, frankly, don’t really care about. They’re trying to satisfy the customers. They’re trying to bend to their wills. But it doesn’t address the real issues.

When You Miss a Big Problem By Focusing on the Small

It’s really no different than the video of the turtle with a plastic straw stuck in its nose from a few years back. It went viral and everyone started complaining to food companies.

“Hey, why are you serving plastic straws?”

It created this massive movement. And guess what? Now there are paper straws. Some companies banned plastic straws. Some cities, like New York, Seattle, and Miami Beach banned them. Now states like Hawaii and California are following suit. Over in the U.K., plastic straws will be banned from next year. In 2021, a ban goes into effect across the entire EU.

This is cool because it shows the power of viral content. But it leads some people to falsely believe we’ve cured the plastic problem. When, in fact, it’s not true. It cures a tiny fraction of a much bigger problem.

So people make the mistake of thinking something is big when it’s not. It’s an example of being narrow-minded.

A trader thinking commissions are a big deal is similar. It’s being narrow-minded. Don’t be narrow-minded. Change your mindset and see the bigger picture.

What Students Are Saying

You might not know this, so I want to put it out there. Some people aren’t quite ready for the Trading Challenge — and that’s OK. We have other options available like TimAlerts and Pennystocking Silver.

Check out these recent wins from the TimAlerts chat room… 

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Etdealer: “XELA got mine $204 profit and out for day. good luck all(clap).”

Aidan7dasilva: “$714 dollar week not too bad.”

GooniesTrader81: “$TTNP fit my pattern. Was a sniper. 3000s @ $0.41 sold at $0.45 into strength. 9 minute trade. Definitely sold WAY TOO SOON like Tim always does, but I’m happy with my $120 profit. Missed out on $300+ more. That’s okay. On to the next.”

CovaEspa1: “Sold $UNRG, 1750sh, from .25, sold at .44.”

Big482: “Sold $ADXS $186.84 profit.”

Even the newbies share their paper trades…

Slayertrade: “Paper traded the breakout of $NAT at 2.76 Friday bought at 2.72 held over the weekend and out at 3.01 this morning. good learning!”

And these wins from today’s Trading Challenge chat room…

GarrisonMorgan: “DUDE!!! First trade as a challenge student on $SNNA in 3000 shares at .30 out at .35! $156 profit risking only $850! Wow!!!!”

the_tipsy_nomad: Locked in $475 on $HMLA. My goal was to take 5-10% profit, my goal was met so I won’t get greedy. My entry was 100k shares at 6 cents. I was risking 1-2%. Seeing now that I got out way too early lol. Singles add up so I’m not mad at taking safe profits. This is my 5th green day in a row now. Stay safe out there ladies and gents.” 

And the_tipsy_nomad also shared this one on Twitter…

More recent tweets from students… 

Here’s one from @yojennsemite:

And another from @SavannahPianist:

Trading Challenge

If you’re ready to learn the nuances of trading like these students, apply for the Trading  Challenge today. But remember, it’s a marathon and not a sprint. There’s no replacement for hard work and experience.

Are you a trader? Have you missed great opportunities by focusing on the wrong thing? Share your experience below. New to trading? How will you change your mindset to focus on the right things? Comment below, I love to hear from all my readers!

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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

* 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”