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Mentor Updates

Millionaire Mentor Update: Aggressive Trading

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Written by Timothy Sykes
Updated 1/19/2023 15 min read

When is aggressive trading OK? It’s a question that’s come up a lot lately. And it’s understandable. Why? Because my students are watching me trade more aggressively the past several weeks.

What you have to understand is that I’m taking advantage of the market. Even days that start slow seem to pick up. When the market is like this, aggressive trading is OK. But you still have to be careful. Keep reading to understand how to reduce your risk if you trade aggressively.

Last week was another crazy week in the markets. I made $26,963** — overtrading a little. Thing is, there were just SO many plays I couldn’t resist. I’ll get more into that and break down a few trades.

But first…

You Can’t Talk Enough About Giving Back

aggressive trading
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Last week, Trading Challenge student Jack Jablonski did something inspirational…

Jack started the Challenge in August 2019. For the first several months he just studied. Jack did some options trading before he joined the Challenge. So the markets weren’t completely new to him. But he decided to start fresh with penny stocks.

New to penny stocks? Access my FREE penny stock guide here.

Jack just passed $20K in verified profits in 2020. All that’s good, and I’m proud of how hard Jack’s studying.

But this is what I’m most proud of…

On May 12, Jack made a little over $2,100.**

(**Please note these results are not typical. Jack has exceptional knowledge and skills developed with time and dedication. Most traders lose money. Trading is risky. Do your due diligence and never risk more than you can afford.)

So what did Jack do that was so inspirational? Here’s a guy who’s still learning, refining, and tweaking. But instead of gloating about his wins or getting greedy, he decided to give back. Check it out…

I love that Jack made $2,100 and then went out to his neighborhood to deliver groceries and money to homeless people. That was nice to see.

But this is what was inspirational…

He posted about it, too.

A lot of people say things like, “Why not give on your own? Why do you have to talk about it?”

Let’s clear this up right now. Because I think too many self-righteous people really don’t get this. Some people have even accused me of virtue signaling because I post on social media about my charity work.

How to Pay It Forward

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I think it’s important to post to inspire others…  

A lot of people who saw that post re-tweeted it. When that happens, you pay it forward.

For example, when Karmagawa works with a charity, we tag the charity. Doing so gives the charity more exposure.

aggressive trading
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Social media is an underutilized tool for giving charities exposure. It’s an underutilized tool for sharing the idea of giving back. You can’t talk about giving back enough. Especially when so many traders make a lot of money and don’t give back.

If you want to help spread the news about giving back, follow me on Twitter and Instagram.

Let’s get to some trading questions…

Trading Questions from Students

“There are a lot of pumps recently. Is this a coordinated effort between Twitter and chat pumps?”

I don’t know who the pumpers are. They all use crazy screen names. Frankly, I don’t even want to expose them.

Let’s just say there are groups out there that all tweet the same stuff. They’re pushing the same stocks in these chat rooms of theirs. The great thing is you can see it all using the StocksToTrade social media search tool. And also the Breaking News chat room.

How I Get My Penny Stock Breaking News

The StocksToTrade Breaking News chat isn’t just a feed of all the latest news. It’s two stock market pros who find and alert hot news for low-priced stocks. You have to be a StocksToTrade subscriber first. The Breaking News chat room is an add-on.

Get StocksToTrade here. I use it every day. Once you subscribe, you can add the Breaking News chat to your account.

(Full disclosure: I helped develop StocksToTrade and I’m a major investor. That said, it’s my dream stock-scanning tool. It’s designed to help save time in finding the best stocks that fit my patterns and strategy.)

Webinar to Promote StocksToTrade Breaking News Almost Breaks the Internet

On May 14, StocksToTrade lead trainer Tim Bohen and I crushed it. We did an hour-long webinar to promote the new Breaking News Chat Room. The webinar had 2,400 attendees at its peak and over 2,200 stayed until the end. It was crazy.

What happened? We nearly broke the platform. We added well over 1,000 new subscribers for the add-on … overnight.

Here’s the thing…

We had NO IDEA it would be this popular. And right now STT is having trouble dealing with the capacity. The developers are in full-on reaction mode. They WILL get this fixed ASAP or they won’t get any meatballs next time we meet for dinner (inside joke here, but I assure you, our lead developer knows what I mean … and the meatballs were SO GOOD.)

Please, if you’re having issues, be patient. Contact support@StocksToTrade.com if you need help. They WILL get this right.

Let’s take a look at this week’s…

Top Trading Lessons

Again, the market’s been crazy the past several weeks. There are a lot of plays but there’s also a lot of choppiness. Aggressive trading can be profitable in the right market conditions, but be careful.

Some students — those who’ve been studying the most — report making record profits. Even a lot of newbies report making consistent profits for the first time.

So what should you remember if you’re a little more aggressive as you trade?

Small Gains Add Up Over Time

This crazy market is turning some traders into gunslingers. They’re getting too relaxed about following the rules. They’re not managing risk the right way. In other words, they’re going for home runs. (I trade using these rules.)

If you ever start saying, “Screw small gains, I just want big gains…” 

… or you start to get cocky and go for a home run … you usually strike out.

Just go for singles — don’t go for home runs. I’ve been taking a lot of 5%, 10%, and 15% gains. Sometimes I sell too soon … I often sell too soon. But small gains add up.

Another risk-management strategy I employ is to…

Modulate Position Size on Every Trade

Remember, every trade is different. So even though the patterns haven’t changed in 20 years, you MUST consider all the indicators. For example, a first green day stock up 100% heading into the close is different than one up nearly 2,000%.

If that sounds far-fetched…

On May 15, Alexandria Advantage Warranty Company (OTCPK: AAWC) ran nearly 2,000%.

Check out the AAWC chart…

aggressive trading AAWC stock chart
AAWC chart: May 15 and market open May 18 — courtesy of StocksToTrade.com

That might not look like much, but the run started at $0.0018 … and made it all the way to 4 cents a share. That’s roughly 2,000% in one day. Crazy.

I traded it three times — twice on May 15 and once on May 18. The first two times I was chasing. But it’s important to note I took a much smaller position on the second trade. Why? To lower my risk.

One way to manage risk is to modulate your position size. A lot of people use one position size for all trades. My position size changes based on my comfort level with the trade. You can, and SHOULD, modulate.

You have to stay humble or else the market will humble you. And it’ll be in a nasty way. Aggressive trading doesn’t mean reckless trading. You don’t have to risk more — especially while you’re learning.

Watch this video for more information on…

When to Be Aggressive or Conservative in a Trade

Now it’s time for the…

Trades of the Week

This week, I’ll look at a few trades because there were so many. The first goes back to May 8. I want to share it for two reasons … First, it was a great setup. Second, a lot of people didn’t recognize it, and I’ve had a few questions. Check it out…

Vuzix Corporation (NASDAQ: VUZI)

Vuzix is an augmented reality tech company. VUZI spiked on May 7 when the company announced France-based Pixee Medical is using its M400 Smart Glasses.

VUZI isn’t a play that’s really run big in the past. And when it ran nicely on May 7, it finished way off its highs. But then on May 8, the company issued this premarket news on coronavirus and how it’s benefitting.

Take a look at the VUZI chart from May 7–8:

aggressive trading VUZI stock chart
VUZI chart: May 7–8, 1-minute candle, pre-market spiker with news catalyst — courtesy of StocksToTrade.com

As you can see from the chart, there was coiling action on May 7. That established a support level. In premarket trading on May 8, the support level held. The positive press release spiked it again.

When I bought, some people in the Trading Challenge chat room were saying…

“Come on, Tim, this stock never moves…”

But you have to understand that in this market you can be a little more speculative. Especially on coronavirus plays … especially on Friday mornings.

Next trade…

Creative Realities, Inc (NASDAQ: CREX)

CREX first hit my watchlist in April when the company launched its AI-assisted Thermal Mirror. It’s a non-contact temperature detection station intended to help employers get people back to work. On April 28, I alerted CREX well ahead of its press release.

Check out the CREX chart from April 28…

aggressive trading CREX supernova
CREX chart: April 28, Supernova Alert — courtesy of StocksToTrade.com

That was a perfect example of how informational inefficiencies can cause penny stock supernovas.

The stock ran again on May 11. Since it’s a former runner, I was pretty aggressive. I even averaged down thinking it would keep going. Frankly, I was wrong, so I cut for a small loss.

Take a look at the CREX chart from May 11–12…

aggressive trading CREX May chart
CREX chart: May 11–12, two trades using STT Breaking News — courtesy of StocksToTrade.com

I used the StocksToTrade Breaking News and Social Media Search tools for the May 12 trade. I caught it just before the halt and sold just after. It was an 8.53% win for $896** in profit.

(**My results are not typical. I have exceptional knowledge and skills developed over time. Most traders lose money and trading is risky. Do your due diligence and never risk more than you can afford.)

Another Example of Informational Inefficiency

It’s interesting to note that the news catalyst wasn’t really new. It was based on this article in a newsletter about Louisville-based companies. The article focused on what it might look like as companies get back to work. It was really just a story about the same news from April 28.

So why the big spike?

The article said the company was “awarded the exclusive distribution, deployment and support rights to develop an AI-powered fever-detection device to help companies get back to work.”

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There was no mention of any actual contract. But when the story hit Twitter, the stock spiked as we so often see. For more information, read this important post about Twitter pumps.

Lessons From the Trades of the Week

Trading is not an exact science. I was on the right track when I bought CREX on May 11, but it needed some actual news to spike. Even though the news was dubious, it did the job.

Aggressive Trading Tip: Follow Rule #1

Both cases — CREX and VUZI — are examples of aggressive trading on coronavirus-related plays. And even though I had a loss on CREX, I don’t mind being aggressive. I think in this market it’s OK to be a little aggressive … as long as you follow rule #1: cut losses quickly

Millionaire Mentor Market Wrap

That’s another one in the books. This market is wild. Along with coronavirus-related plays, now we’re seeing a lot of low-priced spikers. More about those in an upcoming post.

In the meantime, please do what you can to give back. If you’re a profitable trader, be part of the solution. If you’re still learning or not able to give, share the tweet about giving back — it’s so important!

Whatever you do, keep studying. This market is perfect for learning because there are so many trades. You don’t have to trade aggressively to benefit. You just have to show up every day and learn. If you haven’t read “The Complete Penny Stock Course” yet, I highly recommend it.

What do you think about aggressive trading and the crazy market right now? Comment below, I love to hear from all my readers!

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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”