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Trading Lessons

Are Your Favorite Setups Betraying You?

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Written by Timothy Sykes
Updated 5/10/2023 4 min read

There I was in April, staring at my screen, dumbfounded by my first losing month in YEARS. I felt like I had been sucker-punched right in the gut.

I knew my trading was off…

With some nasty habits like overtrading and being overly aggressive.

But there was more to it than that.

The trading setups that made me millions were betraying me left and right.

You know, when the market throws you a curveball like that, you have two choices:

  1. Keep stubbornly doing the same thing, praying for better results
  2. Find out what’s working NOW and adapt.

For me, the choice was a no-brainer.

And that’s how I spotted TCRX yesterday, a biotech stock that soared over 150%

So, what’s the secret sauce behind this new pattern I’ve been testing?

And why am I convinced it’ll bring even more winners to the table in the days ahead?


Adapt Or Perish

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I started trading in the dot com era…

My haters will say I got lucky because I had a favorable market.

The market was amazing back then—I’m not going to lie.

But I made millions more after that…In fact, I’ve been consistently profitable for +20 years.

Even last year…when most traders got their butts handed to them.

And that’s because I’m constantly refining my process and testing out new strategies.

Sure…it sounds logical but it’s also hard.

Whenever you’re testing something new out, there’s a learning curve.

That means you’ll probably be losing more than winning.

But that’s the only way you can survive in this game.

If I was not flexible and opened minded I probably wouldn’t be writing to you today.

You see, my primary strategy back in the day was short-selling scammy stocks.

It worked great…until it didn’t.

And if I stuck with that strategy, I’m convinced I would have blown out my account.

I feel sorry for shorts in these Supernovas that go up 200%, 300%, and even 1000% in a single day…

There’s clearly more upside potential in playing them long…

In fact, I caught one yesterday in the ticker symbol TCRX.

A New Strategy I’m Testing Out

Before the market opened on Tuesday there was a press release in TCRX…

Source: Yahoo Finance

I call it a “legitimizer” whenever a small-cap company can associate with a well-known established company.

Amgen is a +$100 billion company…and this headline gives TCRX validity.

The stock absolutely exploded in the pre-market going to $4.

Of course, chasing is a dangerous strategy…and although I loved the news…I knew my only chance to play was if it dipped.

Lucky for me, it did…and I was able to snag some shares at $2.90.

I wasn’t in the trade for long, getting out at $3.16 for a solid 8.9% gain.

In hindsight, I should have stuck with the trade…as the stock hit a high above $6.

Source: StockToTrade

But I didn’t beat myself about it because this is a new setup I’m trading. I’ll get better at trading it.

Final Thoughts

jack and tim
© Millionaire Media, LLC

Right now I’m seeing great opportunities in buying dips stocks that have pre-market news.

It’s a new strategy for me, and one I’ll continue to test out.

If you want to know how I’m finding these types of plays… this is my secret. 

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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”