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3 Questions You Must Answer Before You Trade

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Written by Timothy Sykes
Updated 10/24/2023 7 min read

One thing that’s been scary about the recent sell off in the market to most traders has been how orderly it’s been.

In many cases we need to see a total flush out before buyers can step back in…

However, that hasn’t been the case.

Meanwhile, we’re entering one of the most volatile periods of the year: earnings season.

Not to mention, uncertainty surrounding interest rates and geopolitical tensions in the Middle East.

In a market like this you’ve got to be extremely careful.

In fact, if you want to give yourself the best chance to succeed, then you must answer these three questions.


Question #1: Where’s My Risk?

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During times of uncertainty and high volatility the emphasis should shift from profit seeking to capital preservation.

So many newbies focus on trying to make money all the time…they forget about the risk.

Yes, we are seeing plenty of short squeezes. But at the same time, none of them are really clean.

That’s why you need to think defensive first.

Finding the hottest plays isn’t hard if you have a tool like the StocksToTrade Breaking News Chat…

However, you can still lose money if you’re not careful.

Are you a trader that likes buying the breakout…or someone like myself who patiently waits for a panic to buy the dip?

Before you get into a trade it’s better to know your outs.

On the profit side I usually aim for 5%-10%. If I don’t see that move right away I will bail.

Other traders will set stop losses based on a specific support or resistance level.

The reason why having an out is so important is because it’s easier to honor it.

If a trade starts working against you and you don’t have a mental stop in mind…then you’ll likely get emotional…not exit the trade…possibly double down…or not sell because you’re too stubborn to take a loss.

In a fast and volatile market you can’t let emotions interfere with your decision making. Let me correct myself, if you’re going to let any emotion in, it should be fear.

If you trade scared…trading won’t be scary.

Keep things simple and don’t risk more than you can potentially make.

Question #2: Do I Know All The Information

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Anyone with a high/low ticker can find where the action is.

But that’s not enough.

You need to be an informed trader. Again, that’s where something like the StocksToTrade Breaking News Chat can play such a huge role.

For example, have you looked into the stock’s structure?

Is it a low float or has it already been diluted heavily?

What’s the catalyst moving the stock?

Is the news legit, or are we dealing with a stock that is getting pumped?

Is the stock hard to borrow, are short sellers involved?

Does the stock have a history of making big moves? How does it typically react?

Knowing this stuff in advance, will help you make better decisions in the future.

Question #3 What’s The Current Sentiment

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I’ve said many times…three out of four stocks will follow the market.

Right now, the overall market is down, and most stocks are trending down with it.

However, if you stick to catalyst specific small caps then you can still find stocks that are surging higher.

On the other hand, it’s a lot easier to make money in a bull market. All you have to do is go back to 2020-21 and you’ll see what I mean.

In addition to getting a pulse on the market…you want to know what the latest working trends are.

Right now, it’s been short squeezes.

Furthermore, you want to take note of the price action.

Have we seen stocks make huge gap ups in the pre-market and then fade?

Are the best trades happening in the afternoon?

Is the price action choppy or clean?

Traders tend to have short term memories…they will ride a trend until it stops working.

This is extremely helpful to be up on the latest trends. However, elite traders are also aware of the past.

History tends to repeat itself…if you can study the past and also apply it to the latest trends then you’re super prepared to take on this market.

📌 Mastering Market Uncertainty: 3 Questions Every Trader Needs Answered! 📌

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Navigating the market’s unpredictable twists isn’t just about finding the next big stock or following the mainstream advice.

It’s about understanding the core principles and being two steps ahead.

🔍 Are you assessing your risks properly?

🔍 Have you done your due diligence on a stock’s background?

🔍 Can you gauge the market’s ever-changing sentiment?

In a market landscape where every tick can result in gains or losses, where volatile periods like the earnings season shake even the experienced traders, the right knowledge and a timely decision make all the difference.

🌪 Don’t get swept away by the chaos.

📊 Don’t just trade… trade smart.

📊 Gain the clarity you need in this topsy-turvy trading world.


🌟 Join our exclusive live training session this week. 🌟


💡 Dive into real-world strategies molded for these unpredictable market times.

💡 Witness real-time chart analysis, revealing the underlying stories of the current market moves.

💡 Empower yourself to anticipate and pivot, rather than react and regret.

The path to informed trading starts with the right questions. Are you asking them?

🚀 Your Blueprint for Trading Success in a Chaotic Market Awaits. 🚀


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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”