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Trading Tips-Tim Sykes Penny Stock

Why This Method Delivers More Consistency

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Written by Timothy Sykes
Updated 12/13/2022 5 min read

Imagine making over $10 million in lifetime trading profits.

Other than a few drawdowns on bad trades, you’ve been relatively consistent…

That is until recently…

Where you lost almost $1 million in the last month.

Jack Kellogg is one of my top-earning students.

And he knows how many opportunities exist right now with the Winter Glitch.

But his need for green pushed him into a space where he wasn’t as consistent.

I asked him why not stick with OTC stocks rather than play with triple-leveraged ETFs.

Like many traders, Jack sees stocks popping off and wants to ride the wave.

Because let’s face it, why would he settle for a 10% win that nets $10,000 when he could swing for $50,000 wins?

Yet, the results speak for themselves.

FOMO and greed are two sides of the same coin.

They push into aggressive trades in an attempt to score big.

Rarely does this ever work.

Every year I reset my trading account to $100,000, with all my profits going to charity.

Long ago, I learned I don’t do well with large accounts.

My sweet spot is sticking with the 7-Step Penny Stock Framework and trading OTC stocks.

It’s not always the most exciting.

But it’s allowed me to trade consistently year after year, achieving an incredible +76% win rate overall.

Look, I can’t tell you how to turn $100 million into $500 million.

I CAN show you how to take a small account with just a few thousand dollars and generate tangible results.

But let me prove why consistency is more with small account trading and how it can help you make real gains faster.

The Math of a Small Account

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Assume I have an account with $2,000 in it.

There are two strategies I can use to trade it: small but consistent wins (#1) or huge wins that are sporadic (#2).

Here are some basic stats on the strategies to get us started:

  • Strategy #1: 75% win rate, 5% average gain, 5% average loss
  • Strategy #2: 50% win rate, 15% average gain, 10% average loss

If you repeated either strategy over and over, they would both yield an average gain of 2.5% per trade.

But there’s a catch…

If I risk my entire account on every trade, there is close to zero statistical chance I would hit a losing streak so bad with the first strategy that I would cut my account in half.

In fact, there is less than half a percent chance I would lose with that strategy four times in a row.

But with the second strategy, there is a 1.56% chance I could hit a losing streak that would cut my account in half. And there’s a 6.25% chance I might lose four times in a row.

When most traders start out, it’s tough to achieve a win rate over 60%, let alone 70%.

Swinging for larger gains automatically means you’ll capture larger losses.

That’s why I favor a more consistent approach, even at the expense of some extra gains.

I tell my students to cut losses quickly precisely because large drawdowns destroy accounts.

Earning small, consistent gains is not only mathematically better for most traders, but it’s also often psychologically better.

Focus on Morning Panics

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99% of you are not Jack Kellogg trying to trade for tens of thousands of dollars each day.

That means the morning panic dip buy is perfect.

It won’t make you $50,000 in a single trade.

But it can build a few hundred to a few thousand dollars each time with stunning regularity.

All you have to do is find stocks that went Supernova, wait for them to crash down, and then look for morning panics and promoter pumps.

Yes, it will take practice to get a handle on when and where to jump in.

That’s why I offer so much educational content to my students.

There are thousands of videos and commentary to help you learn the tools and how to wield them.

You don’t need to flail at stocks with large moves just because they’re large moves.

Only take the trades that fit the EXACT setup you’re looking for.

Sure, you may miss a few here and there. But you’ll win more trades and profits overall.


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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”