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Trading Lessons

One Stock is All You Need

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Written by Timothy Sykes
Updated 11/1/2022 5 min read

I love surprising my new Millionaire Challenge students.

They see how much I trade and assume I must have eyes in the back of my head.

How else would I find so many trades week after week?

But guess how many times I traded Global Tech Industries Group Inc. (OTC: GTII) in October?

Eight times with a 75% win rate for $3,758 in profits

On any given day, I actively watch 3-6 stocks and have fewer than a couple dozen on my watchlist.

You see, all I need is one good stock to trade.

Naturally, everyone wants to know how I find these choice stocks.

Well, let me tell you…

Volatility is Your Friend

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I like stocks with big moves.

I’m not talking about ones that jump 3%, 5%, or even 10%.

My favorite stocks are ones that go parabolic.

If you look at my 7-Step Penny Stock Framework, you’ll find examples of tickers that make gains of 50%, 100%, 200%…the bigger the better.

Some traders worry about diving into OTC and penny stocks because…well, they’re typically garbage companies.

That’s EXACTLY what I want.

With big stocks, I never know what stories lurk on the horizon or the games promoters play.

Instead, I assume all penny stocks are suspect and treat them accordingly.

Stocks for profitable companies very rarely double on a single day’s news.

That happens all the time with penny stocks.

Rather than take huge positions in big names to carve out a few pennies I take smaller positions in highly volatile penny stocks.

The key is to stack the odds in your favor and manage your risk.

Take GTII for example.

Shares went parabolic before crashing back down to Earth.

From late September to early October, shares went from below $1.00 to almost $9.00!

That’s a ridiculous gain in such a short amount of time.

In less than a month, GTII dropped back down to $2.00.

Swings like these provide traders with multiple opportunities if you know how to identify and exploit them.

For example.

Once the stock topped out, I watched for an opportunity to catch a panic dip buy opportunity.

At first, this might appear like I’m trying to catch a falling knife.

But I assure you, as my students spend time studying, they begin to understand what to look for and where.

If you look at the list of trades above, you’ll notice one of them was a dip buy on October 17. That was the day GTII dropped hard on heavy volume, bottoming out just below $2.00.

What made this spot so special?

First, it had a massive volume spike.

Second, it ran into a round $3.00 number.

Third, that was also the former breakout area from the end of September.

Did it have to stop there?


There are multiple places that have a higher probability of acting as support than others.

When you combine that with price action, Level 2 data, and other techniques I teach, you begin to see how some spots are more likely to create a bounce than others.

You Never Know Until You Do

Millioniare Mentor Update Avoid the Slippery Slope
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When I buy a panic dip, I do it with the full knowledge I could be wrong.

Sometimes, I misread the price action and the stock keeps falling.

That’s why I always cut losses quickly.

Despite what it may seem, I have no idea whether a stock is about to find its final top or bottom before it happens.

And honestly, I don’t try to.

Instead, I rely on my framework to identify where a stock is in the cycle.

Then, I use that information to select the strategy best suited for that phase.

It’s not rocket science. It’s experience.

Not every stock follows the 7-Step Framework to the letter.

And even if they do, it doesn’t mean it will offer an appropriate setup.

Just because a stock goes Supernova doesn’t mean I automatically have to trade it.

The pattern gets things started.

The setup is where it comes together.

You can have a pattern that never creates a good setup.

But you can never have a good setup without a pattern.

Think on that one.


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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”