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Short Selling- Tim's Trading Challenge

4 Myths Short Sellers Peddle to Their Followers

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Written by Timothy Sykes
Updated 12/20/2023 8 min read

On Monday ZJYL went from $25 to $509.87!!!

A Supernova move that destroyed several short sellers…

Although you’re unlikely to hear about those stories.

You see…short sellers have been feeding tales that lead many to financial ruin…and it’s time to challenge these narratives.

If you’re tired of the misinformation and ready to see the real picture…

I’m going to uncover the four big myths short sellers don’t want you to know.

Knowing these can not only protect you…

But put you in a position to exploit these massive opportunities.

Myth #1: Win-Rate Fallacy

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What if I told you there’s a strategy out there that’s right about 99% of the time.

Would you want to trade that strategy?

It depends, right?

What if the one time the strategy fails it causes losses that bankrupt your entire account or even have you owe money…

Still want in?

Most of the stocks having these Supernova squeezes are trash companies. And nearly all of them do sell off and lose their gains.

The problem with short selling isn’t the accuracy of the strategy…because it’s very accurate.

The problem is that it’s incredibly difficult to manage risk on these fast moving stocks.

You double…triple down…and before you know it…you’re sized up too much…and the stock is still racing higher.

When you can’t control the risk, don’t trade it. 

Some of these stocks can halt on the upside…and then can re-open significantly higher…giving the trader no chance to manage risk.

If one of your losses is bigger than your previous nine winners does win-rate matter?

Myth #2: The Best Trades Are The Most Exciting

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The ups and downs of trading can lead to poor health…

Sure, it’s fun to experience big wins…

But wants to be trading with an elevated heart rate all day?

Not me.

That’s why some of my best trades are my least stressful.

Like my weekend strategy…a trade where I set it and forget it.

Short sellers…like most miserable people….love company.

They want you to think it’s normal to be in a trade and getting your face ripped off.

That taking heat is part of the game if you want to be a short seller.

But why stress yourself out, when you don’t have to?

You can get into these exciting stocks without having to risk your entire account each time.

 

Myth #3: Short Sellers Are Looking Out For You

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Short sellers are doing us a favor by exposing scammers in the market.

While that sounds good…nothing could be further from the truth.

Most short sellers are only looking out for themselves…acting on pure greed.

Many of the more notable ones have relationships with brokerage accounts and get paid hefty commissions for referring new customers to them.

And that’s the thing about these short sellers…you never get the full picture.

Many of them have multiple accounts…and they might only show you the one that’s doing good…and hide the rest.

Their selective sharing creates a distorted reality, misleading people about the true risks and rewards of short selling.

 

Myth #4: You’ve Got To Grind All Day

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Trading is counterintuitive.

Being at our desk and watching the market all day makes us feel like we put in a full day’s work.

And while that sounds good…and it’s showing that we’re willing to hustle…

It’s actually terrible advice.

Here’s why…

Most of the setups during the day are garbage.

And if you trade junk setups then you will get junk results.

That’s why if you can, focus on the first hour and last hour of the trading day if you’re strapped for time.

These miserable short sellers have to wake up so early in the morning to find and borrow shares too short.

They all huddle in chat rooms stuck with old stubborn beliefs.

I’m not saying being profitable isn’t hard and that you don’t have to put in time…you do…but I’d rather you spend that time studying instead of staring at the market all day.

I have thousands of hours of video lessons for you to learn from. 

Discover your strengths and weaknesses and then start applying the strategies that best fit your current circumstances.

I want you to trade less and study more.

Are You Ready to Unmask the Truth of Short Selling?

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The market’s recent madness, like ZJYL’s Supernova surge, is a clear sign that conventional trading wisdom is no longer enough.

Many are falling prey to the myths peddled by short sellers, leading to disastrous outcomes.

But what if you could turn the tables?

🚀 Join our exclusive live training session!

🚀 Learn how to spot and exploit the massive opportunities hidden behind these myths.

🚀 Get insights into managing risks in these unpredictable times.

🚀 Discover strategies that prioritize your financial well-being, not just market excitement.

Don’t let the myths lead you astray. It’s time to arm yourself with the knowledge and tactics that can help you thrive in this surging market.

🌟 Reserve your spot now and become the savvy trader who knows how to play the game right.

👉 CLICK HERE TO JOIN THE LIVE TRAINING! 👈

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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 (205) 851-0506 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”