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Trading Lessons

5 Lessons From +20 Years of Trading Experience

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Written by Timothy Sykes
Updated 9/14/2023 8 min read

I’ve seen it all over two decades of trading…

I’ve racked up $7.5 million in trading profits during that stretch and counting. 

And let me be clear: The journey to becoming one of my 30+ millionaire students isn’t just about mastering trades…

It’s about sidestepping the pitfalls that snag most traders. 

I’ve identified five major missteps that newbie traders consistently make. 

But I don’t just want to highlight these problems, I also want to show you how to avoid them. 

If you’re struggling or think you should be doing better, this is for you. 

Lesson #1: Set Realistic Expectations

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No one ever steps into a Brazilian JuJitsu class for the first time and expects to earn their black belt within the first week. 

Or watch an F1 race on TV and think they can compete with Max Verstappen.

However, when it comes to trading, people have the wildest expectations. 

They hear about all these fake traders on Twitter who only post their wins, delete their losing trades, or never mention them. 

It gives people the false impression that trading is easy, and that if you’re not profitable right away there’s something wrong with you. 

Let me tell you something. 

I know there are a lot of people on social media bragging about how great they are at trading and how easy their “system” is to follow…

But where are their success stories?

Do they have +30 millionaire students?

From being in the trenches both as a trader and a mentor– trading isn’t that simple. 

If it was, it wouldn’t be as lucrative as it is. 

That said, my most successful students took years before they started making life-changing money. 

And that’s what I tell people. 

I don’t think you need a fancy degree or be a genius to succeed at trading. 

But you do need to log in the reps, and it will take time and patience. 

Most folks want results immediately… their lack of patience gets the best of them, and they lose money. 

Lesson #2: Focus On Developing One Strategy At A Time

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There are so many ways to make and lose money in trading. 

Some people are excellent options traders. Others focus on swing trading, trading catalysts, and whatnot. 

But like I said earlier, you don’t want to try to do too much in the beginning. 

Even today, I still focus on trading just a couple of setups. 

I still primarily trade penny stocks. 

You won’t see me trading options, crypto, or large-cap stocks. 

I stick to what I’m good at. 

Try to learn one strategy at a time. If it fits your risk profile and personality, then master it. 

Some folks prefer buying breakouts vs. dip buying. Both can be profitable if you know what you’re doing.

Lesson #3: $STUDY

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You’ll never know what your strengths and weaknesses are unless you review your trades and journal. 

I still do it after all these years. 

It helps me identify the best patterns, where I’m finding success, and what I should avoid. 

If you’re a newbie, you should also study trades from other successful traders. 

Don’t copy their trades. 

But try to understand what they’re doing. Again, just because someone makes money with a strategy doesn’t mean you should be doing it too…if it doesn’t fit your personality, then you should forget it.

Lesson #4: Don’t Compare Your Chapter 1 to Someone Else’s Chapter 11

students kyle mari and jack
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You may have a friend who started trading at the same time you did. And you find out they are doing better than you. 

Don’t feel like you should be scaling up because they are. 

We are all running our own race. 

You’re exactly where you need to be. 

Work on your game and develop your skills. 

They say comparison is the thief of joy…and I believe it. 

The cool thing about trading is it’s not like sports, where your timeline is limited. 

You can trade well into your 90s if you wish…

The other thing is, that success doesn’t move in a straight line. 

In other words, your results can be exponential if you build enough momentum. 

Just look at Jack Kellogg. 

Lesson #5: Focus On Risk Management First

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Everyone loves thinking about how much money they will make in trading…

That’s why most people who try trading lose money. 

If they only focused on risk management, they would have a better shot at beating the odds. 

My results are not usual…but I can tell you this…I’m far from being a top trader. 

What I do better than most is focus on risk management. 

My number one trading rule is to cut losses quickly. 

In the early stages of your journey, you want to rack up as much experience as possible. 

That means you have to survive. 

The best way to survive is by keeping your losses small. 

Taking The Next Step

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If most people who try to trade lose money, does it make sense to follow most people?

On the other hand, my team and I have discovered a process that’s produced uncommon results

What are we doing so differently that most traders aren’t?

Instead of telling you…

I want you to see for yourself. 

Every day, we are hosting live training classes.  

Are you ready to see what leveling up feels like?

CLICK HERE TO JOIN OUR NEXT LIVE TRAINING 

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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

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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”