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Trading Recap

3 Critical Mistakes I Made While Suffering My Biggest Loss

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Written by Timothy Sykes
Updated 4/6/2023 6 min read

It’s a slippery slope…

When you start breaking your trading rules.

One mistake can wipe away days…weeks…or even months’ worth of gains.

I know because it happened to me on Wednesday—leading to my biggest loss in 2023.

And while it sucks…I want to share with you what I’ve learned.

There are three critical mistakes I made while losing my discipline.


What Happened?

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If you’ve been following the market over the last few months, then you’ll already know that AI-related stocks have offered some of the best trading opportunities.

And after a master run-up…they began to get whacked on Monday.

The “leader” in the group is the ticker symbol AI, which went from $34 last Friday  down to $21 on Wednesday.

The sector got rocked on Wednesday following a short report from notable short-seller Kerrisdale Capital.

Now, I wasn’t trading AI, but I did trade sympathy plays like GFAI and BBAI. 

In fact, I traded GFAI last Friday, getting in at $6.60 and out at $7.46.

It was part of my weekend strategy play. And boy, I was really conservative with this trade. The stock traded as high as $21 on Monday.

I’ve found dip buying in hot sectors to work well with me…so given Wednesday’s bloodbath, I am looking at potential dip buy plays.

My Biggest Loss of the Year

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There was absolutely no love for AI stocks on Wednesday. But I figured there would be a potential for a dip buy if there were a panic.

I played BBAI because it was less volatile than AI or GFAI. 

It seemed to be bouncing nicely from the morning lows…so I decided to play the breakout.

Of course, the opposite strategy of what I said earlier worked best for me.

More on that later…

What Was I Thinking?

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I felt like I left money on the table with GFAI. I underestimated how large the spikes could get…so I didn’t want to repeat the same mistake.

The Trade In BBAI

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If you look at the chart below, you’ll see that the $2.60ish area acted as strong resistance.

Old support becomes new resistance. So I thought it would break out once the stock got back up to the $2.60s.

However, as you can see, it briefly traded above $2.70 before it dipped below $2.

How I Played It

Source: Profit.ly

Mistake #1

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I let my emotions from previous trades impact my decision-making. I felt let like I had let a big opportunity in GFAI get away from me, and I was determined to make things right.

However, trading doesn’t work that way.

Moreover, my weekend strategy for GFAI was a completely different setup than in BBAI.

To put it bluntly…

I had no business trading BBAI. 

The overall AI sector was weak…and BBAI struggled to overcome resistance.

Mistake #2

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I was stubborn.

Not only was my timing way off. I was in denial that the stock could dip lower.

I didn’t initially start with 32,000 shares long. I grew the position to that size, trying to average a better price.


I was adding to a losing position…something I never tell my new students to do.

My stubbornness leads to overtrading and sizing too big.

Do you see what I mean by a slippery slope once your discipline is gone?

Mistake #3

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I knew I was in the wrong trade, oversized, and still had a chance to take profits but didn’t.

The crazy thing about this trade is that I was actually up on it at one point but didn’t get out.

That’s right…I knew the setup was wrong…I knew my entry was bad…and I had a chance to take profits and didn’t.

I knew I was breaking the rules…but it didn’t change my behavior.

That’s a very self-destructive mindset.

So what can I do better next time?

  • It’s okay to miss a trade…but not to substitute in another play because you missed the last one.
  • Put safety first. Mostly, I’ve kept my losses small before this trade. It may take several solid days or weeks to compensate for this loss.
  • Size on A+ setups, not subpar setups.
  • If I know I’m wrong…get out.
  • Trade scared and be conservative

This was a totally unnecessary loss for me. But I hope you find it to be a valuable lesson. Even after +20 years, I’ll catch myself doing something dumb.

Now, it’s time to refocus, trade smart, and try to make up for this loss.

If you want to learn more about my coaching program, check this out

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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

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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”