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Trading Lessons

Learn My Trading Process!

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Written by Timothy Sykes
Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs
Updated 9/20/2024 3 min read

Welcome traders,

There is a process for success in the stock market. But you need to understand something to truly capitalize …

Your profits will be small in the beginning.

A lot of people don’t like to hear that.

Everyone’s focused on catching the biggest fish in the lake, so they ignore thousands of perfectly tasty smaller fish.

Read my post from X below:

We’re small-account traders. We HAVE to be OK with small gains.

I didn’t become a millionaire overnight. None of us did …

Jack Kellogg, one of my most successful students, has $12.7 million in trading profits (including losses).

These days he’s making HUGE trades because he has a larger account.

But if we scroll back to his first few trades, Jack was making (or losing) $100 per position. Take a look:

Source: Profit.ly

Whether you’re starting with $100, $1,000, or $10,000 …

You’ve got to focus on the process. Don’t worry about catching the biggest fish.

These small fish add up.

My Trade Positions

The stocks that we trade can spike +100% in a single day.

Especially in this 2024 market!

But I’m not trying to catch the whole move. That’s a dangerous strategy.

Instead, I focus on the price action that matches our trade patterns.

I get in. And I get out.

I’m not going to hold and hope, that’s a recipe for disaster.

Let’s take a look at some of my trades from Datasea Inc. (NASDAQ: DTSS) last week. On the chart below, every candle represents one trading minute:

DTSS chart intraday, 1-minute candles Source: StocksToTrade

You can find all my trade notes in this blog.

DTSS spiked 55% the day that I traded it. But my largest percent gain was only 7%.

We’re focused on strategic profits. And sometimes, that means we miss out on the larger part of the move. Notice my first trade on DTSS above, I sold right before the stock surged upward.

Don’t cry over ‘missed opportunities’ like that. Outside of our trading patterns, there’s no telling what the stock could do.

It’s easy for my newest students to get lost in the larger price action … But I have a solution for you:

Use AI to track the hottest stocks following my patterns.

The AI gives us trade plans with potential buy and sell levels. It also tells us when to sell in case the play falls apart.

There’s less pressure to keep holding a stock if there’s a textbook trade plan to follow.

Go catch some small fish today!

Cheers.

 

*Past performance does not indicate future results


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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”