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Trading Psychology

Do you suffer from frequency illusion?

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Written by Timothy Sykes
Updated 10/12/2022 5 min read

Our thoughts become our beliefs.

If you think that’s true, this will be the most important message you read today.

Right now, it’s hard to be positive about things.

Inflation is running out of control, our country’s leadership is failing us, the housing market is starting to crack, and we all know how the stock market has performed this year.

Every website or social media platform you flip on…

Is there to remind you of it…

But if you’re like me, frequency illusion is a good thing…

Frequency Illusion

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Tell me if you’ve ever played this game as a child in the car.

You see a vehicle on the road, a red-colored Buick, and then you try to see if there are more. At first, you’re thinking, there’s no way…

But all of a sudden … they’re popping up … left and right.

Why does this happen?

Because you’re now putting focused attention on finding something.

Next time you’re on a road trip, try it out, and you’ll see the frequency illusion phenomenon at work.

So what does this have to do with trading and making money in the stock market?

A LOT.

You see, we’re constantly being fed negative headlines on social media, newspapers, and television.

And while the economic picture may not seem rosy…

That has nothing to do with how you’ll perform in the stock market.

How To Use Frequency Illusion To Make Money In The Market

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Instead of drowning yourself with doom and gloom, change your lens.

For example, members of the Tim Sykes Challenge are surrounded by winners in my chat room. A few traders in there are up over $1 million in trading profits this year!

Imagine trading alongside Tim Lento, who is up $1.04 million, or Jack Kellogg, who is up $1.67 million this year…

Instead of doom and gloom, your eyes would be lit up with opportunity.

Sometimes new traders think the key to success is developing certain skills. And while there is truth to it…

I believe you also need to have the right mindset and be around like-minded people who achieve the things you want.

Our society has developed a bad habit of celebrating victimhood. And it bothers me.

I’m here to tell you that you have more control over your situation than you think.

My best advice is to surround yourself with others who are winning.

When I first started trading, I had to do it the hard way, alone.

I had periods of self-doubt, anxiety, and frustration.

I didn’t have someone to look up to saying “this is how you do it.”

Wall Street was secretive back then, and electronic day trading was fairly new in the early 2000s.

It’s probably why I garnered so much media attention in my 20s.

A regular person from a small town, earning the type of income once reserved for Wall Street’s elite.

I broke the mold.

And to prove my success wasn’t a fluke, I created the Tim Sykes Challenge.

To date, I’ve helped 20+ of my students become millionaire traders.

That’s why it pains me to hear about traders struggling, making excuses, and not living up to their true potential.

Get away from the haters…

Get away from the naysayers…

Get away from the negative thinking…

Start working with people who are winning, goal-oriented, and with a proven track record of success.

The market might suck, but that doesn’t mean your trading should suck.

If you’d like to join the Tim Sykes Challenge, it starts with an interview.

The program is not a fit for everyone, and not everyone gets accepted.

Now, that’s not intended to scare you away, but to let you know we’re looking for motivated individuals who want to be part of a thriving community.

Not folks chasing get rich-schemes.

If you’re ready to start, click this link to schedule your call with a member of my team. 

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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”