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Trading Lessons

I Bought a Stock up >200% and Made a Profit

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Written by Timothy Sykes
Updated 5/26/2022 5 min read

My job as a trader and mentor is to show my students what’s working in the market and how to turn it into profits.

That’s why I’m so excited that Mark Croock, one of my millionaire students, is revealing a brand new strategy, one he calls Shadow Trades next Thursday, June 2nd, at 8 PM ET.

He’s applied it to make six figures in less than 24-hours, and he swears it works in any type of market, even in a bear market.

Attendance is free, but you must register to gain access to the event.

Now, as a mentor, I’d be remiss if I didn’t come right out and say this…

Markets have NOT found a bottom.

I expect stocks to thrash around in the coming weeks with violent rallies and massive drops.

That’s why I’m dialed into simple setups that limit my risk while maximizing gains.

Right now, my favorite is the morning dip buy.

And the trade I took in The Very Good Food Co. Inc. (NASDAQ: VGFC) provides another great example of this setup.

I bought this stock AFTER it was up 200%!

Plus, it demonstrates two key concepts to surviving and thriving in this market.

Entries Matter

I know plenty of traders out there that say exits are the most important part of a trade.

At face value, that makes sense, especially when I trade explosive moves on penny stocks.

But here’s the thing…

If I don’t get the right entry, I’ll never make it to the exit.

Let me show you what I mean.

Take at the 1-minute chart of VGFC.

StocksToTrade Platform: VGFC 1-Minute Chart

I bought into this stock on the dip after shares peaked at around 47 cents.

My entry was just above 38 cents.

If you look at that range, the low up to that point was 38 cents.

Essentially, I was $0.007 off the lows.

Ideally, I wanted to see shares try to take out the highs at 47 cents. Otherwise, I could cut my losses when either:

  • The stock dropped below the lows and didn’t appear as if it would rebound
  • Volume declined and the stock traded sideways

In this case, I saw the latter, which has been more common this week.

From my entry point, the highest the stock got before my exit was just under 42 cents.

Based on my entry, when I saw the stock wasn’t going to continue, I exited the trade, but still managed to turn a profit.

Imagine if I had been impatient and chased the stock, buying at 40 cents instead of just above 38 cents.

That doesn’t seem like much if I’m looking for a run-up and through 47 cents.

However, my profit would have shrunk from $128 to $35.

What many traders don’t realize is that these small wins add up over time.

Plus, in this type of market, I don’t want to give stocks too much rope.

So when I cut trades, I’d rather make a couple of % rather than break even or even lose.

It might seem like such a small thing, especially with a small trading account.

But this is how I maximize my performance.

Treat Setups Individually

Let’s go back to the chart and highlight another area of importance…

StocksToTrade Platform: VGFC 1-Minute Chart

This consolidation point where the stock sold off offered a dip-buying opportunity long before I took the setup.

Several of my students managed to get in at this area and trade it for some incredible gains.

Since I missed the early entry, I had to look at my setup as a separate trade. I couldn’t let the setup that I missed influence my decisions.

So, rather than take an aggressive position, I lightened up (even when I only got a partial fill).

It would’ve been far too easy to chase this stock.

Early in my career, I let missed opportunities and losers push me into revenge trades. It’s a good way to decimate an account.

Now, I take each trade as it comes. If I feel like an earlier setup might influence my thinking, I take a step back, possibly avoiding all trades for the rest of the day.

Even when I take multiple trades in the same stock on the same day, I look at each independently.

Are You Up for a Challenge?

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I’ve helped dozens of students that became millionaire traders.

I want to help you achieve your goals.

Sign up for my Trading Challenge and get started on your path to success.

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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”