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Trading Lessons

My Preparations for Trading This Fall

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Written by Timothy Sykes
Updated 9/4/2022 5 min read

Historically, August is a slow month for the markets.

Not this year.

During my recent webinar, I explained to my students why I expected this year to be TOTALLY DIFFERENT.

So far, I haven’t been disappointed.

Bed Bath & Beyond Inc. (NASDAQ: BBBY) was a ridiculous Supernova driven by a short squeeze.

I managed to spike some serious profits with fubo TV Inc. (NYSE: FUBO).

With markets taking a faceplant over the last few days, everyone wants to know what’s next…where I expect the major indexes to fall.

While I can’t tell you where the S&P 500 will be in a month, I CAN tell you what I expect for September and October and the preparations I’m making.

Because these two months could be CRUCIAL for your trading.

Two Months of Pure Danger

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More crashes happen during the months of September and October than any other time during the year.

Just look at history:

  • The Bank Panic of 1917
  • The Stock Market Crash in 1929
  • Black Monday in 1987
  • The Subprime Mortgage Crisis in September 2008
  • September 11, 2001

You can chalk it all up to pure coincidence.

But it doesn’t matter what you and I think, it’s what everyone else thinks.

You see, if enough people believe something is true and then act upon it, that thing becomes a reality.

That’s how bubbles form, whether it be in cryptos, oil stocks, or anywhere else.

I’m already seeing risk start to pull out of the penny stock and OTC markets.

BBBY was probably the beginning of the end for the multi-day runners.

Now, I’m starting to see Supernovas build and collapse within the same day or a couple of days.

Take Bright Minds Biosciences Inc. (NASDAQ: DRUG) for example.

The stock made two excellent attempts at a run that went Supernova and failed the same day.

Compare that to the chart below of Ingelligent Living Application Group Inc. (NASDAQ: ILAG) which had multiple runs.

Even garbage stocks like FaZe Holdings Inc. (NASDAQ: FAZE) ran for multiple days before flaming out.

I still expect stocks to hit ridiculous spikes, just in shorter timeframes.

Calibration Keys

diluted shares conclusion
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Given this outlook, these are the adjustments I plan to make.

First, and always the most important, I cut losses quickly.

While this is my gold standard, it becomes more important when there’s an outsized chance for a potential crash.

Yeah, I may give up a few profitable trades here and there for a few hundred or even a few thousand dollars.

But the flip side is a potential loss that swoops in before I can react and drains a chunk of my account.

Trading careers aren’t measured by how much money you make. They’re measured by survival.

Next, I’ll be on the lookout for news catalysts that lift stocks the same day.

My go-to news source is the StocksToTrade Platform’s Breaking News.

Our analysts deliver the headlines that matter to traders faster than anyone I’ve seen.

Candidly, they account for a huge portion of the trades I take.

Next, I’ll be keeping my position size small.

I did expand how much I played with in the last month when things heated up.

Now, I plan to cut back accordingly.

Smaller sizes make it much easier to trade mechanically without letting your emotions get in the way.

Additionally, I’ll be looking for clean patterns, especially panic dip buys on OTC stocks.

This is my bread and butter. It’s where I feel comfortable and where I make the most money.

Lastly, I want to spend time working on my entries and exits.

When I played tennis years ago, I spent hours each week working on the fundamentals. During non-tournament weeks, that went double.

September and October are my non-tournament weeks for the markets.

I want to nail down my trading mechanics, especially since I made a few mistakes in the last few weeks.

Final Thoughts

should you buy depositary receipt
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You’ll notice that half my plan revolves around a specific time period, and half is personal to me.

That’s the way it should be.

My trading plan balances market adjustments with personal adjustments.

No matter what the market is doing, I ALWAYS want to work on my trading basics.


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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”