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Penny Stock Basics

Trading Challenge to Co-founder of Karmagawa

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Written by Timothy Sykes
Updated 4/17/2022 5 min read

I believe that, as a trader, you have to work hard every single day to reach your goals…

But day in and day out, it can sometimes be hard to maintain motivation. That’s why every now and again, it’s good to look back and see just how far you’ve come.

Recently, I had the opportunity to reflect on my life and trading career when I was interviewed on the TV show “Great Day Louisiana” in New Orleans. Check out the video here!

I have a long history with NOLA: I was a college student at Tulane when I made my first millions.* So it was great to be featured on this show and remember how far I’ve come both as a trader and a human being, thanks to my hard work and dedication.

My Big Breakthrough in the Big Easy

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In the interview, host Jacqueline Mazur starts by saying, “Most people don’t turn their bar mitzvah money into millions of dollars through stock trading … but in fact, that is exactly what self-made millionaire and Tulane graduate Tim Sykes did.”

I talk about the evolution of my trading, starting with how I began in high school using my bar mitzvah money. My parents granted me access to the cash. They figured it was my money and that I’d at least learn a big and powerful lesson if I lost it.

But I didn’t lose it. I was obsessed with finding great stocks, and my hard work paid off. I began to find some winning trades and continued my career in college at Tulane. I researched stocks at night and traded any time I could.

I’ve always had an obsessive personality, so even while enjoying all that New Orleans has to offer, I kept trading. I had some very successful trades — and started a hedge fund — all while maintaining my course load.*

In spite of the fact that I didn’t have a mentor or proper trading education, I worked hard and learned from my mistakes. I ended up making over $2 million by the time I graduated.*

Time Changes Everything

Through the years, my goals as a trader have changed drastically. Sure, I’ll admit it: at first, I was in it for the money and all that comes with it. But over time, I found — as do many traders who find success — that the excitement of amassing more and more possessions has diminishing returns.

Don’t get me wrong … I like my cars and definitely enjoy the finer things in life. But over time, my world view has expanded.

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I’ve always had a passion for travel, and my trading money gives me access to the world. In seeing the world, I’m beginning to learn how much impactful work I could do with my money to help make it a better place.

I don’t do anything halfway. So when I started to get involved in charity, I did it in a BIG way. At this point, I’ve donated $4 million. I’ve helped build schools and helped those in need. And I’m deeply involved in environmental causes.

Through it all, I’ve maintained my status as a trader and teacher. I continue to help emerging traders learn the skills they need to become self-sufficient. And with my 2+ million followers on social media, I try to inspire others to do good in the world.

What I’m Doing Now

These days, I’m on the road most of the year. I just marked the milestone of visiting 120 countries. You might find me filming in Seychelles to save the reef or flying around the world to promote the work of my charity Karmagawa. A far cry from being a Tulane college boy … but that’s where it all started.

I’ve gone from being a Tulane student trying to fit in trades whenever and wherever I could to being a successful trader and mentor to my Trading Challenge students. I have the freedom to travel the world and the ability to donate to great causes.

Don’t think for a second I’m slowing down. I haven’t come close to achieving all my life goals. I still work hard at trading and teaching. And just like any other human on the planet, I still have a lot of room for improvement. I strive to keep learning every single day.

But I’ve come a long way from where I started.

I hope by watching this interview you’ll see that if you’re determined and you work hard toward your goals, anything is possible.

You might not know exactly where your trading journey will take you … but if you stick with it, incredible things beyond just great trades can potentially happen. The world can open up in ways far beyond your wildest dreams.

How has your trading career changed since you started? What life goals do you think trading can help you achieve? Leave a comment and let me know your experiences!

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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”