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Penny Stocks-Timothy Sykes Millionaire Challenge

Millionaire Mentor Update: London Real and Advice to My 20-Year-Old Self

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Written by Timothy Sykes
Updated 2/21/2023 9 min read

I love my life and what I do. I love giving to charity, teaching people to be free, and traveling the world. None of it would be possible without learning to trade penny stocks. And I want to teach you. Are you ready? Apply for the Trading Challenge today.

Recently I explored the Faroe Islands on a foodie tour with The Hungry Tourist. Then I made my way to London. We had some Game of Thrones cast invites, so I got to hang out with several cast members. Taking pictures is pretty much off limits. So, sorry, not much to share in that respect. But it’s pretty cool I’m kind of part of the Game of Thrones family — it’s one of my favorite shows.

I did a bunch of interviews while in London, including a two-hour interview for London Real with Brian Rose. It was a crazy, comprehensive interview with lots of lessons. Brian’s an awesome guy. Check out the interview below (this one takes a while, so set aside some time later if you can’t watch the whole thing right away.)

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London Real 发布于 2019年5月10日周五

Did you catch the part near the end where Brian asks me what advice I’d give my 20-year-old self? My advice to my young self is the same advice I’d give to anyone right now. Anyone. Even you. Make sure you watch the interview. (Hint: that question’s at about the 1:44:30 mark. But don’t cheat yourself — watch the whole interview.)

By the way, while in London I stayed at the Nobu Hotel in the hipster Shoreditch neighborhood of East London. Years ago this was a run-down area, but it’s on the up and considered a cultural hub. A lot of artists live there, and it’s a short walk from the financial district. If you get to London, check it out.

Oh, and even though I was getting room service all the time, I’ve been eating less. The foodie tour I told you about in last week’s update was too good. I gotta cut back.

As always, I’ve been trading while on the go. Let’s get to some trading questions!

Questions from Students

“You bought $KBLB late afternoon on Friday, May 10. The stock continued to go up despite little news since the big press release back in April. Is that an example of market inefficiency?”

Kraig Biocraft Labs Inc (OTCQB: KBLB) has been the single best performing stock for me in the market for a month. (Until this week, that is. More on that below.) It more than quadrupled from where I first bought it when the Polartec press release came out on April 17.

Watch the video below (it’s five minutes) to get a better idea of what news moves stocks. Then, plan to spend some time with my Trader Checklist over the coming week. It’s nearly 12 hours of free content. It will help you understand why KBLB has been on my watchlist — and why I traded it several times — over the last month.

KBLB was a classic example of inefficiency. You had mind-blowing positive news. And if you remember, I went aggressive when I bought that first green day. But it didn’t really do anything. And it wasn’t day 2 or day 3 … it wasn’t even day 4, 5, or 6 … Freakin’ day 8  was the big breakout day.

So the news came out and very few people were watching. It just kept going. On Friday, May 10 it took out new highs. I didn’t know if it would have more news — I decided to buy based on price action. It was a small position this time. I didn’t go big because the stock was overextended.

I’d been looking for the morning panic on KBLB for a couple of weeks, but there hadn’t been any. When a stock hits new highs late in the day it can lead to higher prices. Which is why I went long. My goal was to lock in 5–10% profits, barring news. There’s always the risk of negative news. And there’s a risk of the company doing a financing when the stock is up so much.

Here’s a chart of KBLB showing the gap up:

This trade worked out. It had solid price action going in. It was the perfect gap up despite a tough market due to uncertainty around the China trade talks. I locked in gains to be safe — something I recommend to students. It hit my goals, and I walked away with a 10.14% gain.

Now, look at the right side of the chart…

… I’ll have more to say about KBLB next week as there are good lessons in how this stock played out. At the time of writing it’s fallen more than 50% from its highs. Make sure you read next week’s update. I’ll give you some insight into how some of my top students played it with a different strategy. Even with different strategies many students and I came out ahead.**

“Do you compare trades you’ve made in close proximity to each other? Is there any value in this?”

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I compare trades on similar patterns. So Kona Gold Solutions Inc (OTCPK: KGKG) and Taitron Components Inc (NASDAQ: TAIT) would be comparable because they’re both morning panics. I even did a video lesson for Trading Challenge students about missing the first morning panic on TAIT on May 9. That day I took the KGKG morning panic instead.

Turns out TAIT was the better bouncer. Then it offered me a kind of second chance on May 10 with a low volume morning panic. I took it, and I was dead right. I locked in profits a little too soon. It actually spiked more than a dollar a share from my buy.

It was kinda cool to go out on a positive note on a Friday. Especially after being off a little in the past few weeks on the morning dips. They’ve been happening later in the morning. I wrote a little about that in last week’s update. Check it out — it can be helpful for learning how to adapt to a changing market.

The morning panics are back to happening right near the open, and I’m back, baby!

Let’s take a look at one of those trades as the…

Trade of the Week

I’m going with TAIT. Not only was it my biggest win of the week, but I was dead on in my thesis. I’d done a pre-market video lesson predicting the trade ahead of time. I told students to look for morning panics on four stocks, including TAIT.

For me, this trade isn’t just about the money, it’s about being able to call your shots ahead of time. Being able to call the price action, see the price action, and execute the price action. It was a very nice way to end the week.

Here’s the chart:

TAIT stock chart

I dip bought this recent runner as it tanked on low volume. It had a nice bounce — better than I expected even with light volume. So I didn’t get greedy. Singles win the game in the long run, not home runs. This was an 11.52% winner — very happy with that.

I had a lot of questions from Trading Challenge students about how I saw this trade coming. I’m guessing those students hadn’t seen the video lesson yet, or it would’ve been clear. If you look at the big morning panic followed by a bounce on May 9 it gives you a clue.

As I said in my answer to the question above, I took the KGKG trade on May 9 instead of the TAIT trade. I keep track of ALL multi-week spikers and wait for this pattern. This isn’t an exact science. It’s certainly NOT guaranteed that this will happen. But it happens often enough for me to take advantage of the pattern when I see it.

Millionaire Mentor Market Wrap

That’s another week in the books. Make sure you keep studying every day. No days off! My top students nearly all report studying hard several hours a day … In some cases for a year or more before everything sinks in.

Traders: What will you take away from this week’s update that you can use today? Newbies: How will you use this information to inform your studies and your trades? Comment below, I love to hear from ALL my readers!

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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 (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”