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3 Things Jordan Belfort learned from me

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Written by Timothy Sykes
Updated 9/30/2022 5 min read

‘The Wolf of Wall Street.’ Jordan Belfort.

In his heyday, he made around $1 million every week. Unfortunately for him and his investors … it was all a huge scam.

In 1999, he pleaded guilty and served 22 months in prison.

These days, he runs a podcast, so I sat down with him for an hour to talk about my market strategy.

Here’s the video …

This guy perfected the pump and dump. Pump and dumps I’ve been riding for over 20 years. I’ve managed to net over $7 million. It’s a few million shy of Belfort’s past fortune. But at least I’m not doing anything illegal. I’d like to keep my freedom.

Nevertheless, I was really excited to share my strategy with Jordan. And even though he made more money than me in the same industry … I got the impression he really didn’t understand the opportunity.

Here are the three things Jordan Belfort learned from yours truly…

#1: Make Money Legally

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You don’t have to pump stocks to make a lot of money.

Belfort ran the operation. That’s why he made so much money. But prison time isn’t something most people like to flirt with.

It doesn’t take a lot of people to pump a stock. And year after year without fail, a few faceless pumpers continue to inflate prices.

I’ve learned how to ride these pumps before they dump.

Jordan raised concerns about liquidity and feasibility. They’re good concerns. Some stocks are too illiquid to trade. My shares could get stuck and I might not be able to exit.

But that’s why I only focus on the most liquid plays. Stocks that trade more than 1 million shares per day (this measurement is called the volume).

And usually, the higher the trading volume … the higher the spike. So it’s a win-win.

#2: How It Works

Tim Sykes teaches penny stock trading from the stage
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He asked me, “how does it work?”

The king of pump and dumps spent so much time running the show, he never took time to analyze the price action.

If he did, I’m sure he’d notice a repeating pattern.

I call it the 7-step framework.

Here’s a link with details.

That’s what’s so beautiful about this niche. I trade the same patterns over and over again. Once I find a stock that fits the pattern, it’s game on.

#3: Can Anyone Do This?

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Jordan wondered if these patterns can work for any stock. And why isn’t Wall Street trading the same setups?

The patterns work on higher-priced stocks, but the movements are so much smaller. I trade stocks below $5 because they can spike hundreds of %.

The stocks Wall Street plays usually only move about 10% in a day. Sometimes even less.

But Wall Street won’t switch to my stocks for two reasons:

  • Pump and dumpers, like Jordan Belfort, give low-priced stocks a bad rap.
  • Hedge funds trade billions of dollars. There’s not enough room in this niche for position sizes that big.

It comes back to liquidity.

A trader with a small account can turn a couple thousand into a few million. But it’s much harder for someone with a few million to make a billion.

Join With a Small Account

Over the last few years, the number of small account traders I’ve seen become millionaires has increased exponentially.

It’s because there’s more opportunity in the market.

COVID and Biden’s stimulus checks introduced a whole new generation of traders. And that means there’s more money moving with more opportunity.

Plus, more traders have access to the resources required to profit effectively.

There’s been a huge barrier to entry for small account traders. But not anymore.

Here’s everything you need.

Until next time,

— Tim

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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”