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6 Important Lessons From A New Student

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Written by Timothy Sykes
Reviewed by Friedrich Odermann Fact-checked by Ed Weinberg
Updated 5/10/2024 7 min read

Here’s another birthday gift and for you in honor of my 36th birthday this past week. I HIGHLY suggest you take advantage of it ASAP CONSIDERING THE SALE ENDS IN JUST 24 HOURS.

I get lots of notes and emails and tweets from my Millionaire Challenge students. Often, it’s just a couple of sentences that say “thanks!” or a paragraph or two about how much they’ve learned from me. But every now and then I get more. Sometimes students want to share what they’ve learned while in the Challenge, which is great, because then I can pass that on to all the other students, or all the other would-be students who haven’t yet taken the plunge and fully invested in their future. It’s all well and good for me to post interviews with my top students who have made high six and low seven figures** like:

…but what about upcoming newer students who might not have made that much yet, but are learning nicely and on the right track?

Most recently, I received a message from my trading challenge student Nick. Nick began his challenge in November 2016, and spent the next few months learning. His takeaways are great, and if you’ve just started the challenge or are thinking about applying to become a millionaire trading challenge student, this is a must read.

The 6 Most Important Lessons I’ve learned After 6 Months In The Millionaire Challenge, According to Nick

Lesson #1:  Want it

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How bad do you want it?  You are responsible for shaping your future. Success takes time and determination. It is earned, as few will be handed anything on that proverbial silver platter. Take a minute to focus on what it is that you desire and what steps you are going to take to get there. Have a plan and make it your mission to execute that plan. You will get discouraged along the way. Everybody falls down. It’s how you pick yourself back up which shapes you as an individual. Don’t make excuses. There is always somebody out there who has it much worse than you, and somehow finds a way to prevail. In summary – Attitude is everything.

Lesson #2 Reflect on the positive, grow from the negative

You have to be able to understand what your proficiencies and deficiencies are when it comes to trading. I’ll be the first to say that I’ve got an incredible distance to cover on my path to achieving consistency and success. I’ve been constantly expanding my trading journal throughout my short time traversing the market. If you don’t have a trade journal, start one now. At the very least, record your trades in detail on Profitly. This is crucial to the success of your journey. I spend a lot of time reviewing each of my trades and reflecting on my entries, exits, risk level, price targets, etc. This has helped to shape my trading going forward as I’m able to think back on the last time I traded something similar, and the outcome of that trade. The biggest losses I’ve taken have also taught me the most. Don’t be embarrassed about mistakes (or in my case – pure stupidity). Grow from it. If life isn’t about bettering yourself each day, then what is it all for?

Lesson #3  Find what works best for you and capitalize on it 

I had never traded a stock in my life prior to October of 2016. I really struggled during the first four months of the challenge, after getting accepted in November. There was an overwhelming amount to learn. It took me a long time to realize that I needed to break the different aspects of trading up into pieces and take it in stride. I watched video lesson after video lesson, focusing on one subject at a time while absorbing what I could about other aspects of the market. And I finally found my passion after discovering short selling. Trading went from something I really enjoyed doing, to something I couldn’t get enough of. I had been getting out of bed each day around 4:30am Central time. This was after hitting the snooze button multiple times. After discovering the joys of short selling, I barely needed an alarm anymore. I continued to focus on shorting and finally pulled myself out of the red, achieving profits after months of struggle. That feeling was unlike any other. I’m finally starting to “see the light” because of it.
Find what your’e good at throughout the vastness of different trading strategies. Focus on it and work towards becoming consistent. Build your knowledge base and skill set off of that.

Lesson #4  Stay focused on your goal

Why did you decide to start trading? For me it was because I was tired of just getting by in life. I wanted more. I have a goal to become financially healthy. It is important to keep your goals in the forefront of your mind. Use it as motivation. Have short term, mid term, and long term goals. This has been a key factor in helping me grow not only in life, but with my trading. Each week I’ll set a goal and repetitively work towards it throughout the day, each day. This week my goal has been to respect risk. I’d taken a few big losses recently in not doing so. I’m working towards this goal day in and day out, in order to become more consistent.
By learning to work towards something specific, I’ve fine tuned my abilities.

Lesson #5 Protect your capital

This is one of the single most important aspects of trading. You must protect your capital. Holding and hoping is not the answer. Make a trade plan and stick to it. Cut your losses quickly when your plan doesn’t work out. Tim Grittani said something in one of his webinars that really hit home with me:
Your job isn’t to trade but to manage risk – where are you risking off going into the trade and with how much on the line? That’s really all trading is.. putting yourself in high odds situations, and getting the hell out the times the situation fails. good trading is much more reactive than predictive.”
If that doesn’t sum it up, I don’t know what does.

Lesson #6 Never stop learning

Knowledge is everything. There are countless hours of material to learn from. I’ve always got a video lesson playing throughout the trading day, constantly absorbing everything I possibly can. As far as i’m concerned, you can never know enough. Never stop building and growing. Keep moving forward.
Thanks, Nick!  If you have a list of lessons that you’d like the share, drop me a line so I can share it.

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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”