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Trading Lessons

How To Harness Your FOMO

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Written by Timothy Sykes
Updated 3/5/2024 6 min read
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FOMO is real.

And it can be dangerous if you react to FOMO incorrectly.

Just like all fear …

Some people freeze from fear. They might make poor judgments in reaction to scary or stressful situations.

Other people use fear to heighten their abilities.

I’m not a Navy SEAL … but I’d imagine they know a thing or two about this.

I always tell my students to trade scared. That way trading isn’t scary.

Use your FOMO to take necessary precautions when you’re trading.

My students are banking right now because they understand how to harness FOMO. We’ve been doing this for years.

And in the 2024 bull market, the results speak for themselves:

There’s still plenty of volatility for small-account traders right now.

But don’t let FOMO suck you into bad positions!

FOMO Solution

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There are STILL a lot of people sitting on the sidelines while these profit opportunities rip higher …

Some people have FOMO and they choose to ignore the market instead of taking profits. Stop beating yourself up.

Everybody has FOMO. It’s natural. But what you do with the FOMO determines the kind of person you are.

The way I see it, there are 3 choices:

  • Bend to the FOMO and make poor trading decisions.
  • Ignore the FOMO and make no trading decisions.
  • Embrace the FOMO and hone your trading decisions.

Here’s how to embrace your fears …

My students who are profiting right now, they prepared when I warned them about this hot market.

I didn’t know when the bull market would hit and I still don’t know how long it will last. But I don’t need to predict things like that.

The market ebbs and flows. Eventually it will cool down. Then it will heat up again.

Those who prepare are in the best position to pull profits when the market surges.

I’ve got a timestamped Tweet from January 2022 when I told everyone to study while the market slid lower. Look below:

I’m a glorified history teacher.

I knew the hot market was coming. I tried to warn you.

Today’s Profit Opportunities

© Millionaire Media, LLC

So we’ve established … you have FOMO and you’re not prepared for the profit opportunities right now.

There’s no shame in that. Own it. Stand on business.

The question is: What are you going to do about it?

A few years ago you would have been on your own. During the 2020 and 2021 hot market, my students had to watch live streams and study past webinars to gain enough experience.

Then AI broke on the scene in early 2023 …

I taught an AI bot to follow the hottest stocks in the market using my trading process.

One of the most recent picks came on March 4:

NRX Pharmaceuticals Inc. (NASDAQ: NRXP) was on a multi-day run when the XGPT trade bot alerted an overnight trade opportunity …

The company sold off after announcing a $1.5 million public offering on February 26.

At a lower price, the company then announced another $1 million share purchase by an existing investor. This purchase wasn’t a share dilution, but more a vote of confidence. Thus, the price has already spiked 150% from its lows, post-public offering.

Here was XGPT’s trade plan alerted before the market closed on March 4.

Source: XGPT

And here’s the trade overlaid on the chart:

NRXP chart multi-day, 5-minute candles Source: StocksToTrade

The stock didn’t make it to $0.75. But $0.55 to $0.70 is still a 27% profit opportunity …

Wait for the next XGPT alert.

Or prompt the bot with your ticker and it will spit out a trade plan as if you asked me directly.

Don’t let FOMO push you into bad trades. Use XGPT until you become proficient.

Cheers.

*Past performance does not indicate future results

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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”