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Trading Tips-Tim Sykes Penny Stock

How to Trade Like a Pro, Even If You’re a Beginner…

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Written by Timothy Sykes
Updated 5/11/2023 7 min read

It happened again.

I was riding an 8-trade winning streak…

My losing month in April was becoming a distant memory.

But like many traders I started to feel myself…and I got cocky.

I was quickly humbled after taking three straight losses.

Inconsistency in trading can be extremely frustrating.

It can feel like you’re spinning your wheels.

I know, because I’ve been going through it all of this year.

But I’m determined to work through this and get back on track.

Luckily, I have +20 years of experience to lean on. And it doesn’t hurt that I’ve made more than $7.4 million in trading profits during that time.

I know what it takes to trade at a high level consistently.

If you’re struggling with consistency in trading, I encourage you to read my story.

I’m sharing my experience in the hopes that it will help you avoid making the same mistakes I did.

Perspective Matters

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As humans we have a tendency to overestimate what we can accomplish in a few months to a year…and underestimate what we can do in 5 to 10 years.

Many of my top students didn’t make a single dime their first year as a trader. 

For some that can be deflating. And it’s probably the reason why so many traders give up before they see the light at the end of the tunnel.

I made seven-figures in 2020 and in 2021.

Two of my best years ever.

Last year, I barely made six-figures.

But you know what?

I was actually proud of myself considering the overall market got destroyed and most traders got their butts handed to them.

And while this year the market is doing better, trading conditions haven’t gotten that much better.

That’s why I say there is a time for learning and a time for earning.

Right now you should be learning.

Don’t get me wrong…I wish I was doing a lot better than I am right now. But I also know that trading is a marathon not a sprint.

If you’re struggling right now keep the big picture in mind.

Study hard…you might not see the results now…but if you continue to make an effort day in and day out you will be surprised on where you are five years from now.

If you need further inspiration then watch this video. 

Four Things I’m Constantly Reminding Myself Of

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#1 Focus on the process

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With many of my favorite patterns not working in this market I’ve found myself testing out new strategies.

For example, this week I caught one of the largest gainers in the ticker symbol TCRX.

The stock had a great catalyst and I was dip buying it after a major gap up…

And although the stock doubled in price after I got out…I wasn’t down on myself because this was a relatively new trade for me…dip buying stocks that have pre-market news. 

The reason why I got out is because the stock struggled to go through its previous long-term resistance. I had a reason to get out.

It just turned out I needed to be slightly more patient.

#2 Learn How To Cut Losses Quickly

Tim Sykes tosses his book An American Hedge Fund in the Alps
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I always have a trading plan that includes a profit target. But unlike many other traders I don’t use a stop-loss.

Or a price I want to cut losses at.

I’ll watch the price action…and if it doesn’t make the move I’m looking for then I will bail the trade.

Sometimes I will bail at break-even or for a very slight loss.

While I could do better with my patience…this approach has helped me avoid some big losses.

#3 Trade Small

In 2020 and 2021 I was not scared to slap size onto my trades.

Why?

Because the plays were working and the market kept feeding me opportunities.

However, that has all changed.

If you suffer a big loss now, it’s unlikely you will get a chance to make those losses back right away.

That’s why I would rather keep it small right now…

Now, you might be thinking: Tim, how do you expect to make money then?

No one I know is making big money right now…

I’m trading to stay fresh and preparing myself for when the real action starts.

If you can trade disciplined in smart in a crappy market…then imagine what you can do when things heat up?

That’s why so many of my best students started making money in years 2 and 3 of their journey. 

#4 Trading Isn’t Scary If You Trade Scared

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The other day I found myself in the ticker symbol MVST…the stock was up about 50% when I entered.

Pretty scary right?

It is…any time you trade a stock that is up 50,100, or even 200% …you never know when they are gonna pull the rug on you.

That’s why I go into these trades with small size.

And I’m typically buying off a dip.

Meanwhile, when most newbie traders jump into these high-flying Supernovas…they are not thinking about the risk…they are only thinking about how much money they are going to make.

And if you think like that…you deserve to get slapped.

The name of the game is always to live to fight another day.

Focus on risk first. And you’ll be surprised at how you view each trade after that.

Final Note

If I was a newbie trader right now I wouldn’t focus at all about making money in this market.

Instead, I would focus on developing my skills.

Learning to take small losses, being patient for good setups, and refining my process.

I know it’s probably not what you want to hear but my job isn’t to paint a picture of rainbows and unicorns.

If you want to know what’s possible with this mindset…then YOU watch this video right now. 


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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”