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Can Scared Money Make Money In The Markets?

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Written by Timothy Sykes
Updated 3/24/2023 5 min read

You hear it all the time…

If you want to be a profitable trader, you have to take out your emotions from trading…

…scared money doesn’t make money.

What a LOAD of BS.

I’ve made over $7.4 million in trading profits and have mentored over 30 students on their path to becoming millionaires.

And if there’s one thing that’s helped more than anything, it is that I trade like a COWARD.

That’s right…even after +20 years of trading…I’m constantly focused on protecting my capital and being safe.

Maybe if some of those banks were focused more on risk and less on profits, they wouldn’t be in a crisis looking for the government to bail them out.

If you’re interested in being a successful trader for many years and not someone chasing fast money, then today’s message is for you.

I’ll show you how I’ve stayed consistently profitable in trading bear and bull markets. And why I recommend newbie traders adopt this style.

The Numbers Don’t Lie

The haters love throwing dirt on my name.

They say I trade like a piker…

I can’t trade real stocks…

That my strategies no longer work…

However, if you take a look at my PnL over the years, they tell a different story.

Source: Profit.ly 

I’ve seen a lot come and go…But to this day, I’ve continued to be consistent.

Trading Like A Coward Pays

Looking at my PnL above, you’ll see I had some slow gain years and some large ones.

I chalk that up to experience.

You see, some traders will go balls to the wall regardless of the market conditions. Not me.

I want to trade aggressively when the markets are hot, and opportunities seem endless…like in 2020 and 2021.

But when things cool off as they did in 2022 (and 2023 so far)…I take my foot off the gas…trade smaller, and focus on risk management.

When most of the market got their butt kicked in 2022, I managed to profit six figures by being selective and trading small.

And that’s how I teach all my new students how to trade. 

Here’s how to do it…

Learn To Be Picky

I often tell people that I’m a retired trader. Of course, I’m not, but that’s the mindset I adopt going into trading.

You see, I only want to get involved in trades that compel me to take action. Trades that are so juicy…that I’ll have regrets for not taking them.

This helps me be selective. And focus on my A+ setups.

Make Safety A Priority

Let’s face it…If these banks focused on safety, they wouldn’t be in this mess.

Before I get into a trade, I think about what I can lose if I’m wrong.

This allows me to focus better on my entries.

For example, last week, I took a trade in the ticker symbol AZYO. 

It was a speculative dip buy on a stock that had a huge spike in earnings… And I bought it when it fell 15% from its intraday highs.

Now, I wouldn’t call this the perfect trade.

But what I really liked about it was my risk.

At worst, I would be out of the trade for a penny or two loss. And it best I would have made five to twenty cents.

The trade didn’t really go my way, and I cut it for a three-cent gain on five thousand shares.

A profit of $150 on a $7,350 investment. Not the most exciting trade in the world, but the risk vs. reward was there.

This Is A Market For Learning

I’ve got plenty of cash at my disposal. If I wanted to, I could trade significantly bigger than I am now.

But there are two reasons why I don’t.

First, I trade a small account because I believe it helps my students learn better. 

Second, the market isn’t great for trading…it’s great for learning.

There’s no reason to slap on huge positions right now. It’s an especially difficult market if you’re a newbie trader.

That’s why you should hone your skills and develop your strategies. And the best way to do that is by staying small.

Small losses will never bankrupt you.

Think of it the way a professional athlete treats the off-season. In the off-season, they’ll work on their game, stay in shape, and prepare themselves for the upcoming season.

You want to develop these skills now when things are slow.

And when things heat up again, you’ll be more than ready to take advantage.

Several of my top students became millionaire traders in 2020 and 2021. 

But they didn’t start trading those years. They were working on their craft earlier. When the right market came along…they were ready.

Bottom Line

Unlike many of those fake traders on social media…I will never tell you to remove your emotions from trading…especially fear.

Fear has kept me in this game longer than most.

Embrace it…it will keep you on the right path even during these uncertain times.

If you’re looking for training to level up…Click here to find out more

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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”