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Trading Psychology

How Many Licks Does It Take to Get to the Center?

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Written by Timothy Sykes
Updated 4/18/2022 13 min read

“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…

Profit.ly user suhwateeze cracked a joke in the Challenge chat room. (See his profit chart to see how singles really do add up.*)

Here’s his question…

03:15 PM suhwateeze → timothysykes: “How many licks to the center of a tootsie pop?”

Indeed…

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.

Did you know the question is important to academics, too? There have been several studies. Here’s an excerpt from one such study — the bolded sentence reveals the point I was trying to make…

“[…] 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)

Source: How Many Licks Does It Take to Get to the Center of a Lollipop

© Millionaire Media, LLC

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.” 

(Note: Giving Karma on Profit.ly is the same as a like or a favorite on other social platforms. DocBrian also deserves karma for this challenge for charity.)

Flavor

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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.

Licking Frequency

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.

Your Age

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?

disadvantages of ethical investing
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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

“If the news is positive, why isn’t the stock doing well?”

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.

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.

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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.)

The great news is, even if you’re not in the Trading Challenge, you can watch and learn from the updated version. Get it here: “Trader Checklist Part Deux.” Study it.

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

Tim Sykes pointing at you.
© Millionaire Media, LLC

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.

It’s super important to note that even the highest-rated setups can turn into losses. But I’ve refined these indicators over the years to increase the odds of success.

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.

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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.

If you want access to all my trading webinars (not just four-minute lollipop rants) I urge you to apply for the…

Trading Challenge

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.)


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Author card Timothy Sykes picture

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”