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Trading Psychology

4 Things to Watch in 2021 – Part 2: Wild 2021 Predictions

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Written by Timothy Sykes
Updated 1/4/2023 14 min read

2021 predictions … they’re everywhere right now. Most of them are in the form of listicles. In the financial world, we’re seeing headlines like “3 Stocks to Buy in 2021.” Or “5 IPOs to Watch in 2021.”

If you read the first post in this series, you know how I feel about those lists. You should read the post. But in a nutshell: they’re designed to get clicks. Sadly, for too many newbies, they’re an introduction to the stock market.

Well, this year, I refuse to play that game.

So #2 on my list of four things to change has to do with 2021 predictions…

Learn to React Instead of Predict

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It’s a funny thing about predictions. People want to believe them. They look for reasons why the prediction is right. They try to find confirmation. It’s an example of cognitive bias.

Everyone does it a little bit. And for many things in life, it’s pretty harmless. But in the stock market, it can be painful. During stock market madness like we saw in 2020, it can be devastating.

The sad thing is, the pundits and so-called teachers don’t have to be right very often for people to believe them. They only need to be right every once in a while for people to trust them.

So here’s my take: forget about predictions in 2021. Forget about predicting the stock market from now on.

Anyone trying to give you 2021 predictions about the market is full of BS.

The amazing thing is…

Your Brain Is a Supercomputer

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We evolved to adapt to our environment. We also evolved to react quickly to what we see, hear, or touch. It’s built-in protection.

So it blows my mind when newbies get stubborn about what they predict a stock will do. Or how much due diligence they’ve done. Or worse, even after about a 30% loss, they “just know this stock will come back because this is world-changing tech.” 

You wanna move in the right direction in 2021? Do you want to get closer to self-sufficiency and profitability?

Use your brain and react to the price action. Stop basing your trades on a prediction. And if a trade goes against you, get out. Even if you take a small profit, but it’s not doing what you want, that’s MUCH better than holding and hoping.

Make this agreement with yourself right now…

In 2021, predictions are a thing of the past. Put them behind you. Say, “Goodbye, predictions. Thanks for all the fun. Good riddance.”

To put it in perspective…

I never trade based on predictions. Not predictions about earnings, products, or new deals. Ever. I wait to see how the market reacts. And then I react. That doesn’t mean I wait around when news is spiking a stock. But I also don’t wait around for the stock to tank again.

It also doesn’t mean I never “buy the rumor, sell the news.” But again, I pay attention to how the market reacts to the rumor. There’s no prediction involved.

Even on very speculative trades, I have a trading plan and follow it. If the stock doesn’t do what I want, I get out.

Use the supercomputer sitting on your shoulders. Here are a few examples…

3 Predictions for 2021

Here’s the cool thing about my 2021 predictions … The format is “if you do this, then this will happen…”

So you get to decide whether to take action. And then, at the end of the year, you can tell me if my predictions were right. How’s that? I might be wrong. But I doubt it.

2021 Prediction #1: If You Learn to React, You’ll Be a Better Trader

Learn to react. And that means you have to understand all the indicators I teach. You can’t expect to focus on only one indicator and consistently do well.

Here’s an example…

Learn to React to Breaking News

How does breaking news or different kinds of news affect these stocks? You almost have to be a scientist. You have to experiment every day. The good news is, experiments come at you every day.

So then you take notes and write down your thesis. Then you review your trades and see how well you did. Only then, over time, will you begin to understand what kind of news potentially moves a stock.

But you can’t stop there. Because if you think it will always play out the same way, you’re just as ignorant as the people trying to predict. It won’t always play out the same way. But every time you see it, you gain experience. You’ll know the potential because you’ve seen it. You’ll know the possibilities. And THAT gives you the opportunity to react.

Then, if a stock doesn’t do what you think based on the news, you get out. Keep in mind that the news catalyst is only ONE of seven indicators. You need to learn all seven. (Learn about the seven indicators of the Sykes Sliding Scale here.)

2021 Prediction #2: If You Learn What Your Opponent Desires, You’ll Gain An Edge

Trading is a battlefield. You need to come prepared. Part of that is showing up with the best tools for the job. But another part is understanding your opponent. You want to know how they think. What are their desires?

It might sound crazy, but it’s not. Check it out…

Know Your Opponent, React Accordingly

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Your opponent believes the 2021 predictions. They want to believe. It makes them feel better, especially if they’re lazy. It makes them feel better about chasing alerts and hot picks. And it makes them feel OK about not studying.

But what’s really going on is much deeper. It’s based on hidden desires.

All you have to do is watch the StocksToTrade social media search tool to see how derelict these idiots are. I’m not talking about promoters. (The promoters are unethical, but most of them know exactly what they’re doing. And the eventual outcome.)

I’m talking about gullible newbies. They thank the promoters for their ‘free’ advice, ‘free’ hot picks, and ‘free’ due diligence. It’s THEM you’re competing against.

Do you want an edge? Good. Check this out…

As long as you understand your opponents’ desires, it gives you an edge. What do they desire?

This isn’t specific to trading, it’s everywhere. But when it comes to money, desire gets amplified by greed.

Thanks to greed, your opponent desires…

  • To be right. Everyone wants to be right so badly they’re willing to endure pain. They’ll ride a loss to prove a point. “It’s not a loss until you sell …” Meanwhile, my top students and I take profits along the way.*
  • To be part of something bigger. They want to be in a group where they feel good about themselves and their future. Even if most of what they’re seeing or reading is complete and utter BS. When confronted with disconfirming truth, groups tend to support each others’ false beliefs more.
  • Secret knowledge. Everyone wants to be in on something other people don’t know about. So the promoters give these morons exactly what they want. Until they don’t. Then, like all pumps, the stock fails. But they’re all in it together, so they think it’s OK.

Please read this section again. Note: these are all common desires. We’ve all experienced them. The key is to understand them. And don’t fall prey to them. Learn to react.

2021 Prediction #3: If You Study Every Day, You’ll Start to See the Patterns in Real Time

One thing I’ve said about the stock market and predictions is this: the patterns are predictable.


They’re never exactly the same. And they don’t always play out. So how can I get away with saying they’re predictable?

penny stock checklist

Because even though I don’t know when the next one will happen…

And even though I can’t predict how big or which stock…

It’s the Same Damn Patterns

Again and again. Look through my blog and you’ll see example after example of charts showing the patterns. Different stocks, different sectors, different years … but the same patterns.

I’m 99% sure there will be another supernova. I’m 99% sure there’ll be another morning panic. And a beautiful first green day that gaps up the next morning. There will be stocks that follow my seven-step framework. (My lawyer hates it when I talk like this…)

The point is, when the patterns come along, if you’re prepared, you can trade them. That doesn’t mean you’ll win. Look at dozens of my 2020 dip buys and you’ll see comments like this from December 10…

World Series of Golf, Inc. (OTCPK: WSGF)

Entry comments: I wanted a bigger panic under .05 but its holding so I’m in for small position, goal is to make 10-20% on the bounce, classic https://tim.ly/sykesmorning panic pattern here

Exit comments: No bounce so rule #1 cut losses quickly, looks like I’ll get my wish under .05, potential rebuy into bigger panic.

See details of my $59 loss on WSGF here.

Or this trade about 15 minutes later…

Strikeforce Technologies, Inc. (OTCPK: SFOR)

Entry comments: Even bigger panic this time so I take a bigger position, goal is to make 10-20% on the bounce.

Exit comments: Small gain, but wanted the .06s, Etrade not giving me great executions today, maybe market makers are pulling prices faster too, will do video lesson, but I’m gonna start to size down my trades today since I recognize I’m off or the market’s off, something’s not clicking like earlier this week, always look to adapt.

See my $662 win on SFOR here.*

(*Please note that these kinds of trading results are not typical. Most traders lose money. It takes years of dedication, hard work, and discipline to learn how to trade. Individual results will vary. Trading is inherently risky. Before making any trades, remember to do your due diligence and never risk more than you can afford to lose.)

Those two trades are a great example of why you need to study. And they’re examples of reacting instead of predicting.

Resources to Learn How to React

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© Millionaire Media, LLC

The next post in this series is on the way. In it, I’ll explain one of the most important parts of the entire equation. Get a head start here…

Trading Education Resources

Every day I get DMs asking me how to get started. Here are a few resources … You get to choose your level of commitment.

Weekly Watchlist

If you’re new and want to understand the process better, get my weekly watchlist by email. (Hint: study the stocks on the list to figure out why I’m watching.)

FREE Penny Stock Guide

If you’re brand new to penny stocks, start with my FREE penny stock guide.

30-Day Bootcamp

If you want all the basics in one place, start with the 30-Day Bootcamp. I recorded the Bootcamp with top student Matt Monaco in 2020. (Matt is now over $500,000* in total trading profits.*)

Monthly Plans on Profit.ly

If you want monthly plans, including Pennystocking Silver and TimAlerts … Go here.

Trading Challenge

And if you’re ready for a deep-dive like all my top students, apply for my Trading Challenge here.

Tools for Traders, By Traders

Learning to react is a huge part of becoming a successful trader. But it helps if you get the right news. Imagine two former Wall Street traders curating the most impactful news. Then imagine you get alerts from them super fast. Sometimes they beat the big financial sites by several minutes. In trading, that’s a lifetime.

breaking news stt

Do yourself a favor and use StocksToTrade. Add StocksToTrade Breaking News Chat to your subscription. The new Breaking News feature was a game-changer for me in 2020.

(Quick disclaimer: I helped design and develop StocksToTrade and am an investor in it.)

Next in This Series…

There’s something that happens naturally when you react instead of predict. It almost forces you to trade in a manner that reduces your risk in the long run.

What is it? It’s coming in “4 Things to Watch in 2021 — Part 3.”

What do you think of 4 Things to Watch in 2021 — Part 2: 2021 Predictions? If you get it, comment below with ‘I will react instead of predict.’ Comment either way. I love to hear from all my readers!

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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”