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Trading Lessons

3 Ways To Navigate A Trading Slump

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Written by Timothy Sykes
Updated 4/12/2023 5 min read

Have you ever heard someone say they’re never drinking again once the hangover hits?

Then the hangover fades…they drink again…and repeat the cycle.

That’s how I feel right now.

No, I’m not referring to drinking. I’m talking about falling off the discipline cliff.

After taking my biggest loss of the year last week…

I told myself I would be more disciplined, patient, and focused on my best setups.

But just two trades later…I got impatient and overly aggressive…causing me to take another bad loss. 

Luckily, I have thousands of trades under my belt, over 7,700 you can see on Profit.ly, and more than $7.4 million in trading profits.

I’ve overcome adversity, gotten out of slumps, and turned my trading around countless times.

And this time won’t be any different.


Identify Your Trigger Points

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For the most part, I see the market well.

And in terms of my stock selection, it’s pretty strong.

But where I’m failing is my execution.

The panic dip buy has been working perfectly. However, I’ve been too aggressive with my entries and getting into the plays WAY too early.

I always preach to my students to be patient and wait for the right opportunities.

Yet I wasn’t following my own advice.


Because I’ve been forcing trades, I’ve focused more on making money and less on my execution, which is the opposite way to think if your goal is to be profitable.

I’ve been frustrated because I’m finding winning plays, but the timing has been off…I’m zigging when I should be zagging…and zagging when I should be zigging.

The frustration has led me to add to losing positions and overtrade.

On the bright side, I’m aware of what my issues are. And I’m taking responsibility for them.

It’s easier to attack a problem if you know what it is.

That’s why I make videos highlighting my bad trades and share them with my students. 

It highlights what I need to fix and allows my students to learn from my mistakes.

Your Self-Talk

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I know I’m off my game and am working my way through fixing my issues.

It’s nothing personal.

However, too many traders are taking losing personally.

Making money in the markets doesn’t make you a good person. But traders love to beat themselves up when they’re losing.

You’ve got to stay positive. And understand that losing is part of trading and that valuable lessons can be learned from losses.

To trade your best, you have to be confident. Knocking yourself down with negative self-talk won’t help you reach your goals faster.

Your self-talk should be positive.

For example, I’ve been jumping into trades too early when I should have waited more patiently for a better dip buy.

I tell myself I will be more patient on the next trade. I will exercise greater discipline and play my best setups.

I even tell myself to think like a retired trader. Someone out of the game and only willing to jump back in if they find a play so compelling they would regret not taking it.

Stick to Your Rules

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My number one rule is to cut losses quickly. And while I’ve done a good job at that, I’ve traded too aggressively, resulting in bigger losses than I’m used to taking in this market.

My rules are relatively simple:

  • Always cut losses quickly
  • Expect the worst out of every company/promoter
  • Focus on making contact on the ball (singles vs. home runs)
  • Ride the hype, but never believe it
  • Never follow alerts or rely on others for picks

Now, I know these sound pretty general. But these rules help build the foundation of my trading. And they keep me in check.

Your rules might be completely different. And that’s okay if they work for you.

Good rules will keep you out of trouble.

You won’t get out of a trading slump by breaking rules.

That’s why it’s a good practice to review your trading rules each day before trading.

Bottom Line

Climbing out of my April hole won’t be easy. But if I follow these steps I’ve laid out for you, I think it’s possible.

For the next few trading sessions, I will focus on safety, keeping my position size small until I get my timing back, paying closer attention to the setups, and not forcing the action.

Let me know in the comment section below if you’re dealing with any of these issues.

If you want to learn more about my challenge, check this out.  


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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”