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Trading Recap

From Learning to Earning: Are You Prepared for the Shift?

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Written by Timothy Sykes
Updated 7/14/2023 6 min read

For months I’ve been telling people that this is a year for learning.

Why?

Because the action in the market wasn’t great…there was tons of uncertainty surrounding the economy, interest rates, and mass corporate layoffs.

It was choppy out there, which made for some difficult trading.

But that now all looks like it’s behind us.

With the stocks breaking out of recent ranges, I see SOLID spikers and many classic patterns playing out perfectly.

I’m going to show you what I mean by breaking down a few of my latest trades, what I saw in them, and I was able to profit from the opportunities.

Short Sellers Are The New Promoters

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I get it…

A lot of these stocks going on these runs are pretty crappy.

But if you’re trading, then you’re not an analyst.

Who cares about the fundamentals if you’re in something for just a few minutes?

These short sellers pretend they are doing the world a favor by exposing these companies…

But the truth is…they are the reason why some of these stocks are pumping so hard.

And let’s not forget…there’s an investigation on short sellers and all their shady acts.

But I love trolling them…

Why?

Because if they go on tilt…they’ll create more opportunities for you and I.

Like they did in KSCP…

I traded this stock on Thursday after it gapped down big…

I was able to get in at $1.44 and peel out at $1.65…good for a profit of nearly 15%.

The truth is, this stock probably has no business running…but the shorts are overaggressive, and they are getting steam-rolled.

I mean, this stock on Friday rallied by more than 30% again…

So even the most beaten up and hopeless names are rallying right now.

You Can’t Just Hold And Hope

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Investors once had high hopes for stocks like NKLA…

Those expectations are now gone…

But that hasn’t stopped shorts.

They see a $2 stock and think there’s $2 they can make on it.

However, even damaged stocks like NKLA can catch a bid thanks to overzealous shorts.

But keep this in mind…think like a trader not an investor.

You want to be in and out quickly.

Don’t get greedy…and if the trade looks like it won’t work, then bail.

It’s better to cut losses quickly.

Something I ALWAYS teach to my students. 

Right now, the market is giving us so many opportunities…it makes no sense to be married to one position or idea.

Patience & Discipline Are Essential

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Shares of Nvidia have been 🔥.

When Recursion Pharmaceuticals announced a collaboration and an investment from Nvidia…the stock took off.

If you had the Breaking News Chat…you would have seen it immediately.

But despite the bullish pre-market news…the stock sold off significantly from its +18 pre-market high.

Typically, I avoid the pre-market because that’s where I’ve experienced some of my biggest trading losses.

Instead, I want to focus on buying dips on panic sell-offs.

And while I did trade it the day it had news…my best trade in the symbol happened the day after.

I was looking for some panic selling in the $10s near the open…

And that’s exactly what I got…

I pretty much timed this one perfectly, getting in at $10.62 and out at $10.90.

Looking at the chart, you’ll see I got too early…the stock traded above $12…

But I’m not going to beat myself up about it.

Why?

Because the next opportunity is around the corner.

And that’s the mentality you need to have in this market.

Learn from your mistakes, but don’t dwell on them.  

A few of my students wanted to know why I decided to dip buy in the mid $10s…

If you look at the longer-term chart…you’ll see that level was once resistance.

This isn’t always true…but a lot of times what was once resistance becomes the new support.

Now, don’t take this as gospel because it isn’t foolproof.

But that’s what I was using as my base level for an entry.

Is It Time To Earn?

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The market is feeding us with opportunities left and right.

If you’re missing the skills needed to take full advantage of these opportunities then do yourself a favor…

CLICK HERE TO JOIN ONE OF MY FREE LIVE TRAINING CLASSES. 

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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”