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Are Markets Behaving Badly?

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Written by Timothy Sykes
Updated 10/14/2022 4 min read

By the time you read this, I’ll be up on stage in Miami, speaking to a room full of trading students eager to take their game to the next level.

This is what I live for…not the luxury travel or dining at Michelin restaurants.

I want to leave this world a better place than I found it.

That’s why I hop around the globe, helping charities make life better for everyone.


I relay every opportunity I find and alert them to every danger I see.

Folks that join my  MILLIONAIRE CHALLENGE get access to literally years of video content I created over the last two decades.

My goal isn’t to make someone a millionaire overnight. I want to make them a millionaire in their lifetime.

So far, I’ve got more than 20 students who’ve hit that mark, many of them on stage with me over the next two days.

As they tell their stories, most folks are surprised that the one key that links them together isn’t their strategy or a specific setup…

It’s their risk management.

Every one of my students that’s become a trading millionaire knows how to maximize gains.

But what sets them apart is they know how to minimize losses.

Right now, that’s more important than ever.

You’ve probably seen or heard comparisons between this market and 2008 or the 1970s.

That sounds absurd, right?

Actually, there might be something to this idea.

In fact, it comes straight out of the same concepts I teach my Millionaire Challenge students.

And if I’m right, there could be rough waters ahead for months, even years.

Here’s why…

2022 vs 2008

This graphic has been floating around on the internet for the last few months.

The pattern is rather similar.

Many of you are familiar with my 7-Step Penny Stock Framework.

This process I discovered years ago plays out time and again on penny stocks, meme stocks, cryptos, or wherever a bubble might form.

And it plays out in major markets as well.

Now, I don’t expect the market to make as dramatic of a pattern as the framework entails. Nor do I expect it to fade into oblivion.

However, I do believe it will follow similar phases.

We’ve seen this happen before.

This is a chart of the Nasdaq Composite Index when it imploded during the dotcom bubble.

I want you to compare this to the 7-Step Penny Stock Framework and tell me it didn’t follow the same pattern.

If markets were to follow a similar path, we could still be a long ways from the bottom.

And there are a lot of reasons this is probably true.

At a macro level, the global economy looks just like it did in the 1970s:

  • Uncontrolled inflation
  • Supply chain disruptions
  • Energy crisis
  • Geopolitical conflict
  • Government partisanship

It took us 10 years to pull out of the malaise that was the ‘70s.

If you look at our economy, none of the issues we face seem close to resolution.

The question shouldn’t be why won’t stocks rebound it should be how can they not go lower.

Thankfully, I use the 7-Step Penny Stock Framework to prepare my students for either scenario.

They know what to look for in dip buys and what true rallies look like.

As I’ve noted before, I’m keeping my position sizes small and lightly testing the waters in various sectors.

I won’t make a lot of money this way. But I WILL know when the markets are turning around.

Until then, I’m being extra careful because if markets crack, penny stocks won’t just drop a few percentage points. They can fall dozens of percentage points in minutes.

The Bottom Line

Markets hate uncertainty. Unfortunately, we have that in spades right now.

Instead of trying to force trades, I stick with my process using my StocksToTrade platform, its Breaking News chat, and my time-tested chart patterns to ONLY take premium plays.

Because right now isn’t the time to be a hero. It’s the time to prepare to become one.


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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

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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”