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Trading Psychology

630% in 3 Years, Can You Beat Me?

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Written by Timothy Sykes
Updated 6/13/2023 6 min read

I was recently profiled on Business Insider:

Source: Business Insider

In it, they talk about how I returned 630% from 2020 to 2022…

Along with a bunch of interesting stuff, most people don’t know about me…

Plus…why my students are finding so much success, my biggest fears in the market right now, and a whole lot more.

And while 630% returns in three years may seem abnormal, it’s because it is. However, I don’t think it’s impossible.

In fact, I’ll share with you my three best pieces of advice on how to trade better than me.

 

Your Big Advantage Over Me

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I’ve been a millionaire for 20 years now.

I’m not someone who is out there chasing new toys. In fact, I now donate all my trading profits to charity.

It’s an awesome feeling to give back. And I’m so grateful to be in a position to do what I do.

Traveling, charity, and giving consume much of my time.

My life is complicated and busy.

In other words, I don’t have as much time to dedicate to trading.

I believe you have a huge advantage over me.

You can devote more time to studying and watching the markets than I can.

In fact, you should be very grateful for the market we’re in right now.

Why?

It’s kind of slow.

This is a good market for learning. A slow market will teach how to be disciplined and focus on risk management.

When markets heat up and more trading opportunities arise, you will be able to take advantage of them.

A few of my students cracked the million-dollar profit mark in 2020 and 2021. But that’s not when they started trading.

They started trading in slower markets, like in 2017 and 2018.

So if you are just starting out in your journey, be happy.

Now is the time to put in the work. 

There’s No Exact Science To Winning In The Markets

high frequency trading
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While I believe certain patterns repeat in the market…that doesn’t mean they always work.

The markets are always changing.

Sometimes they are trending up or down.

Other times they are moving sideways and trading choppy.

Some strategies work well under certain market conditions…others work well only if the right circumstances are met.

And while this might sound obvious… it’s not what people want to hear.

If you want to get better at trading, you must understand that your timeline is different than mine.

Moreover, what and how you like to trade may be completely different than how I like to.

THAT’S PERFECTLY FINE

There’s no exact science to success in trading.

However, there are some hard truths.

For example, if you want to achieve long-term success, you must be a master at risk management.

I always tell my students that you must cut losses quickly.

It takes time to figure out what works for you. That’s why capital preservation is critical in the early stages of your journey.

Keeping Emotions In Check

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You are going to hear from a bunch of places.

Likely, your friends and family won’t be encouraging you. After all, day trading is often in the same conversation as gambling.

You’ll have to prepare yourself…that you might not get outside support.

Why is this important?

Because you won’t be getting any support from the market.

In fact, each day, you will be tested. There will be days when you are filled with doubt and question whether you can do it.

That’s why being part of a program like mine can be helpful. 

Having a support system can be extremely beneficial.

In addition, trading will be emotionally challenging.

You must constantly humble your ego.

Imagine trading for eight months, and you are still not profitable.

How will you handle that?

Will you give up?

Many of my millionaire students were not profitable after their first year.

That’s why I say be ready to get humbled.

Regarding trading, I am not one of those mentors who tells their students to trade without emotions.

In fact, I tell them to trade scared.

Why?

Because it will help you focus on risk management and persevering capital.

Bottom Line

I love charity…I love helping my students and seeing them rise.

If you dedicate yourself to studying, working hard, and learning, you’ll be surprised at how far you’ll be in a few years.

If you’d like to learn more about my Challenge program, click here. 


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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”