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Millionaire Mentor Update: Midwest Traders Meetup

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Written by Timothy Sykes
Updated 9/8/2021 12 min read

What is it about the Midwest?

Several of my top students hail from the Midwest. We’re talking students who’ve earned six and seven figures while using my strategies to trade.*

I recently spent a few days in Michigan with Tim Bohen, Michael Goode, Jack Kellogg, and Dominic Mastromatteo.

If you don’t know, Dom and Jack are two of the top up-and-coming Trading Challenge students. Both are in their early twenties and have made six figures from trading in the last year.*

Keep in mind these are not typical results. These guys put in the time and dedication. They’ve developed exceptional skills and knowledge. Most traders, 90%, lose money. Always remember trading is risky. So, never risk more of your hard-earned money than you can afford.

I’ve been trying to figure out for a long time why this part of the world creates so many great traders. I’ve even joked about it. In the past, I’ve said it’s because there’s nothing for Midwest traders to do but but watch the corn grow. Turns out I was wrong. But we did sit and watch some corn grow … swipe left on the Instagram post below.

I rented a farmhouse for us to stay in. The power went out three times so we had to move to a hotel on the last night. But it was cool. We hung out, played basketball, and had a good time together.

midwest meetup farmhouse
© Millionaire Media, LLC

Check out the beautiful sunset. I have to say it was nice to get away from my usual spots in the U.S.

The next pic is from one of our basketball games. Check out Dominic takin’ it to the hoop against Jack.

midwest meetup Dominic rises for a shot over Jack while Tim & Michael look on
© Millionaire Media, LLC

So, what about the Midwest makes it the ideal place for penny stock traders? As it turns out, it’s deeper than I thought. We think we figured it out and have some good lessons — videos I’ll be releasing soon. Hopefully, you can apply them to your life.

Here’s the gist of it: they have the right mentality. Maybe it’s generations of farm work embedded in their DNA. Whatever it is, they have the right mindset and work ethic. So, it’s not magic but hard work. In my opinion, that means anyone who’s willing to put in the effort and study can do this.

I almost forgot to mention the TradersEXPO in Chicago, July 21–23. Tim Bohen, lead trainer at StocksToTrade.com, and I gave three talks. You can watch an on-demand webcast of our keynote presentation from July 22 by registering here.

Now let’s move on to some trading…

Trade of the Week

In the last edition of this update, I shared a couple of my Tautachrome, Inc. (OTCPK: TTCM) trades with you.

I want to revisit TTCM in this edition, because I traded it four times between July 12 and July 23. On three of the four trades, I underestimated the upside. I want to share the trade where I finally nailed the top. The irony is that of the four trades this was my smallest profit.

Tautachrome, Inc. (OTCPK: TTCM)

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As I explained last time, Tautachrome spiked after a news release announcing its combined blockchain and virtual reality app. I played the initial multi-month breakout with one of my best trades of the year.

Take a look at the 1-year chart again, and notice the two red days at the far right:

TTCM: 1-year chart through July 25, 2019 — chart courtesy of StocksToTrade.com
TTCM: 1-year chart through July 25, 2019 — chart courtesy of StocksToTrade.com

First of all, you should know that at the time of writing TTCM is still on my watchlist. It had another first green day on July 25. But the volume has dropped, and I’m not sure how much juice it has without more news.

I hope you’ll go back and reread the last edition. Why? Because it explains my reluctance to go long on a stock once it’s into days three, four, and more after the initial spike. Read the student question about overextended stocks for the answer.

But there’s one major exception…

I LOVE to buy into big morning panics. It’s one of my favorite patterns. Look again at the two red candles on the far right. That kind of sell-off after a multiday run can include a bounce. But it seems like they haven’t been happening as often the last few months.

Now, take a look at the chart showing the crack and bounce:

TTCM: 1-year chart through July 25, 2019 — chart courtesy of StocksToTrade.com
TTCM: 1-year chart through July 25, 2019 — chart courtesy of StocksToTrade.com

It was an almost perfect crack, and I was happy to see the morning panic dip buy opportunity. My position size was small compared to my other TTCM trades. Likewise, my goal was only to take 5% to 10% on the play.

As you can see from the chart, it was a nice little bounce. I definitely miss these morning dip buys — solid risk versus reward. But you have to be careful. Don’t get greedy … take the single and forget about the home run.

I timed the top on this trade nearly perfectly, taking a 9.13% win for a profit of $456.* Remember, my results are not typical. I’ve been doing this for two decades. However, I do have 700 videos on morning dip buys … and you can access them as a Trading Challenge student.

Take one more look at the chart and notice the lower bottom and higher top. I wouldn’t have the patience for that move, but some students reported nailing the bottom.

Finally, one of the big lessons from my series of TTCM trades is that you can use different strategies on the same stock. When you watch my PennyStocking Framework Part Deux DVD, it will make more sense. Think of it like this: When a low-priced stock runs, there’s often not only one pattern, but a series of patterns.

As you learn the different patterns and what works best for you…

… you can develop the skills to trade the stock during the different phases of the overall pattern.

Now I want to give some props to some of my students…

Trading Challenge Student Props

I want to give a shout out to all my millionaire and six-figure students. You all make me proud.

When I’ve been outside the U.S. for a while, it’s nice to be home. Above all, it’s great to reconnect. So, I just had the gathering in Michigan,  and I also met up with Mark Croock in Miami. It was awesome to see Mark, his wife, and their new baby.

Also, Tim Grittani is a new dad — congratulations to Tim and his wife.

Finally, I just want to say how much I appreciate all my students. Keep working hard, keep studying, and think of this as a marathon, not a sprint. Your continued studies can pay off, but only if you stay dedicated. All my top students put in the time and effort to gain knowledge and develop exceptional skills.

Let’s move on to a student question…

Trading Challenge Student Question

“Tim, I’ve heard you say ‘Trading is based on a series of rules. When rules start to collapse it’s very damaging to not only your balance but your trading balance.’ 

Please expand on the idea of balance in relation to trading and breaking rules.”

Yeah. Again, it’s important to remember this is you versus you, OK? It’s NOT you versus the market.

Hot picks can be good, but you need to know when to sell. You need to know when to cut losses.

For example, TTCM tripled from my initial buy. (You can see that trade in the last Millionaire Mentor Update.) But on one recent Rafarma Pharmaceuticals, Inc. (OTCPK: RAFA) trade, I was, frankly, wrong. Rather than hold and hope, I sold into strength and still made money on the trade.

Another recent trade was on Discovery Gold Corporation (OTCPK: DCGD). I was wrong on the second-day breakout. A lot of these second-day breakouts have been failing. But, again, I sold into strength.

So, I made money on TTCM, DCGD, and RAFA because I played safely. I stuck to my own rules. If you don’t play safe — if you don’t err on the side of caution — you can go down with the ship. A lot of these stocks panic quicker than most newbies realize.

I don’t want to be down 20%, 30%, or 40%, wondering what just happened and then holding and hoping. Consequently, sometimes I sell too soon. As a result, I protect myself. Protect, protect, protect.

I definitely think that’s smart for all newbie students and traders. You can get more aggressive later — once you have a big account.

Millionaire Mentor Market Wrap

There you go … another update in the books.

Are you a trader? Comment below and let me know you’re committed to building your knowledge account. Even if you can’t make it, let me know you’re dedicated to the process. I love to hear from all my readers!

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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

* 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”