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Trading Tips-Tim Sykes Penny Stock

3 Timeless Principles Every Trader Should Live By

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Written by Timothy Sykes
Updated 9/4/2022 6 min read

The stock market doesn’t care if you finished the fourth grade or have a PhD.

It doesn’t care what your gender is…or where you’re from…

…whether you come from money or are self-made.

None of it matters.

If your dreams are to make it in trading and you’re willing to work…

…I believe you have what it takes to unlock your potential.

I’ve seen countless students of mine change their life and their family’s circumstances because of the opportunities the stock market has provided them.

Today I want to share with you three principles I apply to stay consistently profitable in good and bad times.

I think they’ll help you too…

Principle 1: I Will Trade Scared To Make Trading Not So Scary

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There’s an expression that goes: you’ve got to risk it for the biscuit. And while trading does involve risk, and most people who try it fail, there are ways to garner up the courage to stay in the game.

For example, I often tell my students: I will trade scared to make trading not so scary.

But what does that mean?

Active day traders need action if they want to quickly be in and out of trades. That often means trading some of the most volatile stocks. Get in at a bad price, and you will get crushed faster than you can blink. Of course, that type of volatility should scare anyone. And it does for me, even after 20 years and millions in the bank.

But it’s also that fear that makes me extremely cautious. I’m very quick to cut a trade if it’s not working in my favor. And I take my profits when I get them. I don’t let greed beat me.

Even though I’m trading volatile stocks, I do so in a manner of caution. I respect the market and what it can do to me if I don’t play by the rules. That’s why I stick to my trading plan…win…lose…or draw.

If you’re struggling to trade these highly volatile stocks or too scared to do so, that’s okay. It’s human nature. I would suggest trading smaller, just so you can see how things play out. Or even paper trade, if trading one or two shares is too much for you.

Either way, embrace the fear, and use it to trade smarter. Don’t let it paralyze you.

Principle 2: Less Is More

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My life’s work is helping other traders achieve their goals and charity. I’m on the road nearly every day of the year. I’ve traveled to over 130 countries, and currently, I’m in Italy, living my best life.

Why am I sharing this with you?

Because some people believe that traders just sit in front of their screen, from 9-to-4, trading all day. And while I know a few who do that, it’s not my definition of financial freedom.

I’m usually trading on sketchy wifi and a laptop. I do this on purpose so I can stay focused. I’m just like a lot of people…

If I stare in front of the screen all day, I tend to overtrade. So I put myself in situations where that becomes difficult.

Furthermore, I focus on specific setups that have proven to work for me for years.   So while there’s always action in the market, I can laser in on just a few setups. I might take one or two trades on any given day.

Applying the principle of ‘less is more’ will serve you well. I can’t tell you how often I hear traders get into bad setups, get battered, and then get gun-shy when a good setup presents itself because they’re scared to lose more money.

Of course, discipline in trading is not easy. But it’s something that must be mastered if you want to join the elite ranks, like my millionaire students.

You can improve your discipline by outlining the criteria for an A+ trade. If a setup meets everything on your checklist, trade it.

If it doesn’t, skip it. Or you could set a rule like, today I will trade two symbols tops. While I don’t like being that rigid, it’s not a bad practice for you if you struggle with discipline.

Principle 3: Show Up And Do The Work

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While the idea of trading all day sounds miserable to me, that doesn’t mean I stumble into the trading day not prepared. In fact, the reason why I’m still around after all these years is that I set myself up for success.

Even to this day, I’m learning new things. And I’m constantly looking for ways to improve my strategies.

Early on in my career, I was known as a short-seller. Someone who would look to short crappy stocks that moved after getting pumped by promoters.

However, that game has gotten a lot more difficult because so many traders focus on squeezing shorts.

And while I have enough capital to endure a short squeeze, I know that many of my students who are just getting their feet wet don’t. One short squeeze can wipe them out of the game for good.

Heck, it happens to hedge funds that are well-capitalized. Remember Melvin Capital and that whole GME saga? They folded up shop after getting wrecked in that short trade.

Putting in the reps is vital if you want to be one of the few traders who crack the 7-figure profit milestone. So while I advocate trading fewer hours and being more selective, I expect my students to put in their study time.

Study other successful traders and their wins. Look at charts and patterns, and figure out why specific trades worked while others failed. Over time, you’ll develop some sick muscle memory.

If you need some help, click here to see how I can help you 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

* 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”