“How many licks does it take to get to the center of a …?”
I bet most Americans could finish that sentence without hesitation. But I bet you didn’t know the answer has huge implications for your trading career…
It was during one of my weekly Trading Challenge webinars. I’d just exited this trade. During the trade, I explained what I was doing from start to finish. Challenge students report that watching live trades is a powerful learning experience.
It’s like looking over my shoulder, seeing what I’m seeing. And I share my thought process throughout the trade. It helps connect the dots. For some students, it’s a sort of epiphany. They finally understand how the different indicators align.
Then it happened…
Here’s his question…
03:15 PM suhwateeze → timothysykes: “How many licks to the center of a tootsie pop?”
Table of Contents
- 1 How Many Licks Does It Take to Get to the Center?
- 2 7 Indicators to Determine How Many Licks It Takes to Get to the Center of a Lollipop
- 3 This Is How I Think (… and the Secret to My Success*)
- 4 Use the Sykes Sliding Scale
- 5 Trading Challenge
How Many Licks Does It Take to Get to the Center?
Needless to say, I had a little fun with this. After all, there are a lot of indicators to consider when answering the question. I’ll get to those in a moment.
“[…] a lollipop with a radius of 0.4 inches (1 cm) licked at the equivalent to a flow rate of 1 cm per second would reveal its center in about 1,000 licks. Of course, plenty of real-world factors affect that number.” (emphasis added)
In other words, my half-serious, half-comedy rant during the webinar was on target. Keep reading to see how this applies to trading.
03:30 PM MoonShot: “SSS applies to everything, even tootsie pops.”
SSS refers to the Sykes Sliding Scale. I’m glad MoonShot gets it. But it also applies to other areas of life. Seriously — this could change your life if you let it.
7 Indicators to Determine How Many Licks It Takes to Get to the Center of a Lollipop
Again, we had a good time with this. Have a laugh but keep in mind there’s an important trading lesson here. Keep reading to get the lesson…
03:33 PM shannbam: “Instead of this webinar being saved as “ALYI or SAVA it needs to be titled ‘how many licks does it take.’”
03:30 PM DocBrian → timothysykes: “whoever asked the Tootsie Pop Question, they need like 1k Karma.”
People lick their favorite flavor faster than a flavor they don’t like. (Scientifically proven? Who cares? It illustrates my point.) If you like a flavor, you’re more likely to slurp rather than lick. Which means you’ll get to the center faster.
This probably has more to do with speed than the number of licks. But you never know… if you lick too fast it could make individual licks less effective.
Does age matter? It’s only a theory, but let’s say the younger you are, the less likely you are to have patience. You might bite into the lollipop before you get to the center, as these two Challenge students pointed out…
03:32 PM TaylorPresler: “don’t be a B**** bite that sucker.”
03:35 PM Flytoy: “Just dont say *** it and bite the tootsie pop.”
But younger could also mean you lick faster because you have a sweet tooth, right?
Are You Facing Obstacles?
In this analogy, I used recent dental surgery as an example. If you’ve had recent surgery, you might not be able to lick effectively. Then again, what if you’re using painkillers to overcome pain?
Tongue Injuries Due to Overlicking
Weird, right? But consider this…
Whether you’re trying to get to the center of a lollipop or achieve any other goal, overdoing it leads to problems. With a few rare exceptions, those who achieve and maintain a high level at almost anything do it over time.
Your End Goal: One Lollipop or 100 Lollipops?
Do you want to get to the center of only one lollipop? What if you have a long-term goal that requires you to get to the center of 100 or more lollipops? Your approach has to fit your lifestyle, schedule, and goals.
What Is Your Purpose?
Like your end goal above. But, you could have a unique purpose whether it’s one or 100 lollipops. (Keep reading for my purpose … mind you, I don’t even like lollipops.)
As you can tell, we had some fun. But it goes much deeper. I promised you a trading lesson, and this could save you a ton of time (and money) so pay attention…
This Is How I Think (… and the Secret to My Success*)
This is how I think about any task. Too many people avoid thinking about all the different indicators. (Keep reading, I’ll go over them.) That’s sad AND risky. You want to avoid big risks. You lower your chances of success by limiting your focus to one indicator.
During my lollipop rant, I was thinking about all the potential problems or issues. I tried to consider everything that could keep you from getting to the center.
You should apply analytical questions like this to anything you do. It doesn’t matter if you’re a meteorologist or marathon runner. Ask as many of the right kinds of questions as possible.
If I was a college professor trying to get my students better prepared for exams, I’d ask questions. And if I was a high school teacher prepping students for the SAT exams, I’d ask a lot of questions.
You can — and should — apply the same kinds of analytics and questions to trading.
Be Meticulous With Your Process
That’s a common question from newbies. Too many people don’t get very far beyond this shallow level of thinking.
You have to be meticulous and work from all seven indicators. (See the seven indicators below.) THAT is why learning to be self-sufficient takes time. It’s not about hitting home runs. It’s about developing a winning strategy and using it over and over again.
So whatever you do, be meticulous.
The crazy part is that successful trading isn't that hard, it's factoring in a few indicators & getting the odds in your favor, cutting losses quickly when wrong & your $ gains adding up more than your $ losses. Don't allow stubbornness to turn small mistakes into big disasters!
Use the Sykes Sliding Scale
The idea of rating stocks/trades came from William J. O’Neil, the founder of Investor’s Business Daily. O’Neil was also the author of “How to Make Money In Stocks.” He came up with the CANSLIM approach.
(As an Amazon Associate, we earn from qualifying purchases.)
His strategy is a buy-and-hold strategy. CANSLIM doesn’t fit my approach, so I came up with my own. The Sykes Sliding Scale comes from my experience. When I came up with it, I had no idea if it would stand the test of time. I was just trying to simplify my thought process for students.
It will all make sense when you…
Watch the Trader Checklist
The Sykes Sliding Scale is a tool you can use to evaluate a potential trade. The original Trader Checklist explained my PREPARE method and how to use the SSS. For a long time, it was a free guide on my website.
Sadly, free killed free access. Believe it or not, Trader Checklist was the least watched of all my guides. It got rave reviews, but the perceived value was low because it was free. (Sounds weird. But as soon as we put it on Profit.ly, the views skyrocketed. Trading Challenge students can watch it here.)
Here’s a hint for the PREPARE method so you can start grading your trades before you get in. Oh, and for those of you who say “But I don’t have time to go through the entire checklist before I get into a trade…”
Going through all seven indicators will get you to slow down and stop overtrading.
How to PREPARE for Every Trade
For me, grading a trade happens almost automatically. That’s what I want for you — so you don’t take trades with low risk/reward. Or trades that don’t fit your schedule.
Here’s a quick peek at the PREPARE indicators used in the Sykes Sliding Scale. Keep in mind that for each of these indicators, there are several questions you could ask.
- P is for pattern/price.
- R is for risk/reward.
- E is for ease of entry and exit.
- P is for past performance/history.
- A is for at what time of day?
- R is for reason/catalyst.
- E is for the market environment.
These are the seven indicators I judge before every trade. Sometimes I forget one or two myself, so the Sykes Sliding Scale serves me, too.
You Don’t Need a Lot of Trades to Make Money
You should review your recent trades using these indicators. Use the PREPARE approach as you review the trades to see if you still would have taken the trade. Check your profit/loss ratio and see if it makes sense based on your risk/reward scores.
Be Willing to Go Back to the Beginning
The moment you think you’re a success or too rich to pay attention to the basics, the market will show you how wrong you are. Today is a good day to start using the Sykes Sliding Scale on every trade. It will help you plan your trades.
I can’t emphasize enough how important this is. Make a plan before you trade. My top students might make it look easy because they have years of experience. But they’re all excellent trade planners. Not ONE of them is a gunslinger.
All my top students are part of the Trading Challenge. You get access to hundreds of hours of DVDs. There are thousands of video lessons. Every week we do two to four live webinars. You get access to all the archived webinars, daily watchlists, and mentoring. It’s a full-immersion penny stock trading program.
If you’re dedicated, apply today. Then do the emailed homework and get ready for your interview with someone from my team. Fair warning: not everyone who applies gets accepted. You have to dedicate yourself to your education. You have to commit.
How Many Licks Does It Take to Be a Self-Sufficient Trader?
It’s really up to you. But I assure you this…
Either you arm yourself with knowledge, or the market will make you pay a steep price for your education. And that is why I teach. I want to be the mentor to you that I never had. My goal is to speed up your learning curve.
Let’s wrap this up with a few more comments from the webinar…
03:35 PM HIMMENY → timothysykes: “this got completely out of hand 😀 ur the best teacher Tim lmaoo.”
03:36 PM javancatnip: “Your simple analogies are helpful to understand the complicated!”
03:39 PM ErykaVS: “Loved the tootsie pop commentary! Makes sense 😂”
04:01 PM KDJourney → timothysykes: It has been an amazing day . . . Green Day for me and not only a great lesson but very entertaining!”
04:02 PM salvaje203: “Thanks Tim! Now everytime I have a tootsie pop I will think of this webby :D.”
Do you want more posts like this? Does connecting other things to trading help burn the lessons into your brain? Comment below, I love to hear from all my readers!
(*These trading results are not typical. Individual results will vary. Most traders lose money. My top students have the benefit of many years of hard work and dedication. Trading is inherently risky. Always do your due diligence and never risk more than you can afford to lose.)