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Trading Psychology

Lessons From Tom Brady Coming Out of Retirement

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Written by Timothy Sykes
Updated 4/18/2022 5 min read

On Sunday, after 40 days of wandering in the desert of retirement, seven-time Super Bowl champion Tom Brady announced his comeback…

Source: CBSSports.com

As Brady tweeted, “These past two months I’ve realized my place is still on the field and not in the stands.”

What does that have to do with trading penny stocks?

It all comes down to mindset. It’s just as important as your training. You’ve probably heard me say it before. But this is a perfect time to reiterate…

Trade Like a Retired Trader

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Tom Brady is no different than many aging sports stars. The last sentence in his tweet says, “Unfinished business LFG.”

He misses the limelight. Deep down, he knows that most retired sports stars become irrelevant. Especially if they feel like there’s unfinished business.

In other words, it doesn’t matter that he’s 44 and this will be his 23rd season … He’s pissed off that he didn’t get the Bucs to the Super Bowl again. The GOAT wants an eighth ring and he’s leading one of the top teams in the league.

I understand that mentality because that’s exactly what I try to do with trading.

It’s counterintuitive, but I think of myself as a retired trader. I don’t need to trade. But if a trade comes along that pulls me out of retirement, I have to take that trade.

Why?

Because I would feel guilty NOT taking it.

Again, it’s counterintuitive. Why wouldn’t I want to take a trade?

Because, if you actively look to trade, you end up forcing things. You focus on the wrong setups — or worse, random setups. And that leads to random results.

Let me put it another way. If the Bucs had a terrible last season, Tom Brady might not be willing to come back. But they didn’t. They went 13–4, won the NFC South, and made it to the divisional round of the playoffs.

He couldn’t pass up the opportunity to come back, with his team intact, and give it another shot. And I don’t blame him.

That’s how I trade…

Think Like a Retired Trader

© Millionaire Media, LLC

It’s OK to stop your life if there’s a good trade. It’s fine to put things aside when a setup comes along…

But that setup is so good…

… you’d feel guilty for NOT taking the trade. 

But don’t be confused — this doesn’t mean I’m going for home runs. It means that I’m willing to wait for opportunities that best fit my go-to strategies.

For instance, even though energy plays have been running lately, I haven’t traded a ton of them. I refuse to chase, especially when so many stocks are so overextended.

But a few weeks ago, I saw an opportunity in Smart Sand Inc. (NASDAQ: SND). It wasn’t overextended like so many of the other energy plays, and I saw an opportunity for my Weekend Trader pattern.

I bought it on Friday afternoon. On Monday morning, energy plays all opened up nicely — and I got out of the trade with a nice little $1,464 win.

Wanna see how I’m trading energy plays right now? Don’t miss this:

Do You Understand the ‘Retired Trader’ Mindset?

Acting like a retired trader is NOT the same as being lazy.

It means you’re patient enough to sit on the sidelines and wait until the best plays come along.

And while you wait, you prepare. Study the past. Look at my trades (they’re all posted publicly here). Practice by paper trading. Be ready to jump out of retirement and trade like a sniper at a moment’s notice.

This mindset is the result of years of practice and studying. Are you ready to invest in your ‘knowledge account’ so you can be prepared to take advantage of the trading opportunities out there? Apply for my Trading Challenge today.

Do you understand what I’m saying and why I posted this video? Leave a comment below and say, “I WILL NOT CHASE” if you get it!


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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 (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”