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Trading Tips-Tim Sykes Penny Stock

How to Learn This Essential Skill

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Written by Timothy Sykes
Updated 12/1/2022 6 min read

You probably don’t realize how good of a trader you are.

It’s true.

Half the folks that sign up for my Millionaire Challenge know what it takes to trade profitably.

Yet, +90% of trading accounts go bust in the first few years.

Why is that?

Because folks lack the patience to trade properly.

It’s not a skill that comes naturally.

No one wants to wait to make money.

But we can’t let our impulses take over.

Otherwise, complacency sets in, and you screw up trades you were correct in the first place!

Heck, I did this just the other day, botching several in a row, even though I had the right idea.

Click on the link to see why I’m all about the January effect…

Like any talent, you need to practice being patient over and over.

As someone who’s always on the go, this wasn’t easy for me.

I fought it tooth and nail.

Eventually, I noticed the more patient I was, the better my performance.

Now, this wasn’t easy…

But over the years, I discovered several techniques I want to teach you.

You’ll learn how to practice patience, making it a core strength of your trading.

Pick a Specific Number

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Trading is part art, part science.

When I perform a morning dip buy, I use a combination of technical analysis and Level 2 data to time my entry.

However, many traders, like Karan Khanna, use supply and demand zones (support and resistance) for their trades.

While this gives you an idea of where to trade, it still leaves some ambiguity for a lot of traders.

One of my other Millionaire Challenge students, Clay Ruf, came up with a solution.

Pick a specific number.

Say your support zone is between $1.25 and $1.30.

Stick with $1.25 to be conservative, $1.275 for the middle ground, or $1.30 if you are aggressive.

Whichever you choose, that’s your number.

If the stock comes up short and bounces without you, let it go.

At first, this will frustrate you.

Eventually, you’ll find it much easier to manage. Because once you’re in the trade, you know EXACTLY what to do since you have precise numbers.

Take an Emotional Inventory

conclusion reversal cadlestick
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The majority of losses happen because of our emotions.

Sometimes it’s FOMO on a stock racing higher.

Other times it’s one bad trade influencing another.

Here’s an example from a recent double loss I took in Clean Vision Corp. (OTC: CLNV).

One impatient entry led to another, leaving me with one of my largest losses for the year.

We have to recognize when we’re off our game – when we’re not in the right headspace.

It can be difficult to pull away from the screens.

Many new penny stock traders assume they’re missing out on trades just because the broader market rallied, which isn’t necessarily true.

Back in 2021, traders bounced from one meme stock to the next, afraid of missing the next big move, never taking a break, and eventually draining their accounts.

Focus on the trade at hand.

Once you notice you’ve started worrying about what other stocks are doing, pull back for a minute and reset your mind.

Focus on Decisions, Not Outcomes

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Trading is an exercise in probabilities.

We can’t control the outcomes, only the decisions we make.

Select any card randomly from a deck, and there is a 25% chance you’ll choose a heart.

If you wait until 4 cards are removed from the deck, all of them non-hearts, now your odds of picking a heart increase to 27.1%.

You choose where and when to buy and sell a stock and how much.

What it does afterward isn’t up to you.

All you can do is put yourself in the best position to make a profit.

With the right pattern, setup, and risk management, your winners will outweigh your losers over time.

Limit Yourself

artificial intelligence stocks under 5 to watch in 2021
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Marianna joined my Millionaire Challenge right out of high school

For an entire year, she didn’t trade. All she did was study.

Once she started trading real money, she did it methodically and slowly.

Bryce Touhey spent two months risking no more than $2 per day.

Adding constraints keeps you focused on making the right decisions, not profits.

Plus, it can prevent you from spiraling into serious losses.

Now, one thing you shouldn’t hold back on is your education.

Every moment you spend learning to trade is valuable.

With thousands of hours of video and content, my Millionaire Challenge is designed to help folks from all walks of life take their trading to the next level.

Will you be next?


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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”