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5 Reasons Why It’s Good To Be More Aggressive Right Now

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Written by Timothy Sykes
Updated 2/3/2023 6 min read

2021 was a great year to be a trader. And 2023 is shaping up to be even better!

Back then, I made $1.08 million in trading.

Mariana became my youngest and first female Millionaire Challenge student to hit the $1 million milestone.

So did Kyle Williams.

Bryce Tuouhey, my most recent Millionaire Challenge student to hit $1 million, went from barely turning a profit to up almost $500,000 that year.

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Celebrating his milestone with a victory drink

So, believe me when I say some markets are for earning and some are for learning.

Admittedly, 2022 was a slow year for most traders.

But things began to heat up these last few weeks…like steel-melting hot.

In fact, I’ve started to increase my size, getting more aggressive with my trades.

I know a lot of folks are worried about buying the top because, let’s face it, we’ve been in a bear market for the better part of a year.

However, there are five key reasons why I’m getting more aggressive right now.

Let me lay out my case and see if you don’t agree with me.

#1 A rising tide lifts all boats

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Markets follow the laws of physics like any body of mass.

Once in motion, they tend to stay in motion unless acted upon by an outside force.

When the bears decided to take control in 2022, they made sure to sell every rally.

Technology stocks fared the worst, with some losing more than 90% of their value.

Heck, Carvana (NASDAQ: CVNA) cratered from its $376.83 high to trade below $4.00 by December 2022.

Now, we’ve seen the January effect in full force, with the most beaten-down names jumping 100%, 200%, 300%, or more.

Tesla (NASDAQ: TSLA) has nearly doubled off its lows.

Meta (NASDAQ: META) has doubled off its lows.

These aren’t small companies either. They’re huge and make up significant chunks of the major indexes.

So, when these companies move, it tends to bring in more buying.

That’s why many crypto plays like Marathon Digital Holdings (NASDAQ: MARA) have more than doubled in the past month.

People get FOMO and jump in, not wanting to miss the ride.

#2 Stocks are still well off their highs

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Despite all these huge gains, many stocks are well off their highs.

CVNA was up more than 459% off its lows last week. Yet, that still puts it almost 95% off its all-time highs.

TSLA is still down more than 50% from its all-time highs…META is almost 50%.

Don’t get me wrong, the bounces are huge. But there is a ton of headroom above them.

My 7-Step Penny Stock Framework describes EXACTLY what we’re seeing here.

Companies like CVNA or Bed Bath and Beyond (NYSE: BBBY) didn’t suddenly become profitable overnight, nor did bankruptcy concerns disappear.

This is just what happens when buyers and promoters get ahold of beat-down names.

#3 Lots of excitement and new tech

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On top of that, we’re hearing a lot about some really cool technology like ChatGPT.

Although these types of bullish reactions almost always fail, they create huge opportunities in the meantime.

I’ve watched day after day when our StocksToTrade Breaking News Team reports on a ChatGPT-related headline. The next thing you know, shares are soaring.

Sure, it will run its course. But there are plenty of opportunities in the interim.

Plus, there’s been a recent hype amongst penny stocks trying to go after ‘illegal short sellers.’

That’s scared a lot of bears and sent names like Genius Group Ltd. (AMEX: GNS) up more than 700% in a matter of days.

Broad themes like these, coupled with heavy promoter activity, is a recipe for bullish behavior.

#4 Great price action on bad news

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Last week, the Fed announced another rate hike and said to expect more.

Inflation hasn’t receded all that much, and we’re still looking at a recession.

Yet, the market skyrocketed after the announcement.

I’ve even seen some lousy earnings releases that still send shares higher.

When people start buying news, regardless of how bad it is, you know there’s a bullish sentiment underpinning the market.

And as a trader, we can ride that so long as we manage our risk appropriately.

#5 Multiple intraday runners

Taken together, these influences created favorable conditions for multi-day runners.

One of my favorite stocks last year, Global Tech Industries Group Inc. (OTC: GTII), tripled in the past few weeks.

My watchlist contains nearly twice as many stocks as it did even a month ago.

And most days, those names are green.

This is one of the easiest ways to see how bullish a market truly is.

When there’s momentum and story behind the trade and the market, that’s when the conditions favor higher win-rates and bigger runners.

But do your homework.

Go back through stocks that you watch and see how they’ve performed over the past few weeks. Then compare it to last month.

I’m willing to bet you’ll see a clear difference in the overall trend.

That’s what justifies a little bit more meat in my trading.

–Tim


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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 (205) 851-0506 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”