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Trading Tips-Tim Sykes Penny Stock

3 Bold Face Lies They’ve Told You About Penny Stock Trading

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Written by Timothy Sykes
Updated 8/9/2023 7 min read

Penny stocks are misunderstood by most and I’m okay with that.

Why?

Because if we were all playing on the same level how can we all make money in the market?

The truth is, most traders lose money to more skilled and prepared traders.

That’s how it should be.

I’ve been hearing a lot of noise around penny stocks lately, and to be honest, it’s awful advice.

If you catch yourself believing these things, you can kiss your chances of being my next millionaire student goodbye.

 

Lie #1: You Have To Go All In

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Eat…breathe…sleep trading.

What a bunch of baloney.

A lot of people fail in trading because they don’t have reasonable expectations.

Look, I don’t care who you are, chances of you making considerable money in year one is very slim.

That means you need to have some breathing room.

Some people go to college…put themselves in massive debt…in hopes of making money in the future to pay that off and live a good life.

They have patience for that…but when it comes to trading…they think they need to make money right away.

You need to be patient with the process.

And it’s not anything you can really rush.

Sure, you can watch all my training videos religiously…but you are still lacking screen time and real world experience.

It’s like…would you rather have a pilot who has watched 100s of hours of flying lessons and never flown…or a pilot who has flown for 100s of hours and never watched a flying lesson?

I think we all know the answer to that.

You have to commit to your education, no doubt about it, but don’t look at it as a sprint but as a marathon.

Have a backup plan, and be prepared not to make money. You want to focus on learning, if you are worried about paying the bills then you’re in trouble.

Don’t put pressure on yourself.

And once you make it…don’t be one of those traders who become slaves to their screens.

Get out, and enjoy life.

If all you do is think about trading you’ll eventually burn yourself out.

That’s why it’s important to have a life outside of trading.

For me, that’s charity.

For you it might be something different.

Trading has given me an incredible life…but it’s not my life.

You need to be serious about the time you dedicate to trading but you don’t have to be a junkie to be successful.

Lie #2: Expect Profits During Specific Time Periods

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I know the other day I wrote to you and said September is historically the worst month for stocks and October is the most feared.

But that doesn’t mean it’s going to happen this year.

We’ve seen the December Santa Claus rally not come before…

In addition, we’ve heard that summer months are slow…yet this summer was awesome for trading.

Sure, you should know your history, but remember, anything can happen.

Plus, as traders, we should be focused on what we’re trading, and not what investors worry about.

Just this week, ticker symbol VTGN rallied from $2.50 to $60.

Some of my students caught that long and an amazing day.

You can make money in bear and bull markets and you can lose money in bear and bull markets.

How you trade and what you trade will decipher your results.

Everyday is a new opportunity…and that’s how you should approach trading.

Lie #3: OTCs Died Due To New Filing Rules

Trading mentor Tim Sykes realizes he made a trading mistake
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In 2020 the SEC adopted amendments to enhance retail investor protections and modernize the rule governing quotations for OTC securities.

The amended rule was said to enhance disclosures and investor protection in the OTC market by ensuring that broker-dealers, in their role as professional gatekeepers to this market, do not publish quotations for an issuer’s security when current issuer information is not publicly available, subject to certain exceptions.

And while I think protecting the retail investor is very important and this rule helps them…I don’t think that takes away from trading opportunities in OTC stocks.

In fact, I have traded a handful of OTC stocks over the last few months including VPLM, HDUP, ENZC, DPLS, AITX, GDVM, and HCNWF to name a few.

To completely write off OTCs is silly…

What is old becomes new again…

It was just last year all the talking heads were calling for the death of FANG stocks…and that an entire new class of stocks would lead the market.

Whoops!

Stocks like Nvidia, Meta Platforms, Amazon, Apple, and Microsoft have led the Nasdaq to one of its hottest starts in decades.

OTCs are not dead.

You just have to be selective and patient.

You’re One Step Away From Leveling Up

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You can listen to whoever you want. But let me ask you this, would you rather listen to some talking head or family member who has no skin in the game or someone like myself who has made over $7.4 million in trading profits…tell you how this game is played?

Success in trading isn’t easy…but I don’t think it’s impossible either.

I have dozens of students who have gone on to become millionaire traders themselves.

In fact, I invite you to learn from them.

That’s right, I’m personally inviting you to one of free live training classes. 

Why?

Because I want you to see what successful trading looks and feels like…

You may attend one of these sessions and decide trading isn’t for you…which is okay. At least you tried to find out on your own instead of listening to someone who has no skin in the game.

On the other hand, you could attend one of these classes and find out that trading could be your ticket for a brighter future.

Either way…you owe it to yourself to find out.

Click here to register for our next live training class. 

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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”