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Can This One Switch Transform Your Trading?

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Written by Timothy Sykes
Updated 5/4/2023 6 min read

Are you tired of seeing your trading account suffer because you’re running a playbook that no longer works?

You might feel stuck, unsure of what to do, and frustrated with the lack of progress.

The good news is there is a way to break out of this vicious pattern.

And it’s pretty simple to implement right away.

I can tell you right now, I wouldn’t have made more than $7.4 million in trading profits without this.

And I doubt I would have had over 30 millionaire students from my program. 

This one switch could be just what you need to turn your trading around.

 

It’s Not About What You Want…It’s What You Need

Tim Sykes tosses his book An American Hedge Fund in the Alps
© Millionaire Media, LLC

In 2020 and 2021 I made more than a million dollars each year from trading penny stocks. 

However, I barely crossed six figures in 2022. Of course, making money in 2022 in of itself was an accomplishment given how horrible the overall markets performed.

And that’s something new traders are now realizing.

You need to be willing to make adjustments and test new ideas out.

Plain and simple.

The stock market is cyclical. Some strategies will work in this market environment…but in another…they can be totally useless.

That’s why you should always be studying. 

Early on in my career I was mainly known for being a short-seller. I figured it was a lot easier to pick out scammy pumps and dumps than guessing which overhyped tech stock would run up.

But about a little over five years ago…I noticed that short-selling penny stocks were getting to be more dangerous.

The squeezes would be longer…

And the Supernovas would be more explosive. 

In my opinion, the risk no longer matched the reward.

If I didn’t make that adjustment I likely would have blown up my account.

It seems like at least once a month now we see 1000% single day gains…like we did in TOPS last week.

Stuff I’m Testing Out Now

top penny stocks list September 13, 2021 Tim Sykes drinks coffee in Positano Italy working on Mindset Master
© Millionaire Media, LLC

With the market acting the way that it has been…I find it to be a good environment for testing new ideas.

Before I tell you what some of them are I should first tell you how to approach new ideas.

You’ve got to be like McDonald’s.

When McDonald’s creates a new menu item, they don’t just roll it out to all their restaurants.

They may pick a few locations to test out, get feedback and gather data before they decide to go for a bigger rollout or kill the experiment.

If you’re making money right now trading a specific strategy that’s great.

If you’re not, you should check this strategy out. 

Either way, you want to be trading significantly smaller on these ideas because they’re not yet proven.

The profit and losses from these trades should be tiny compared to your other trades.

I can’t tell you how many newbie traders will jump into a new strategy and just go balls to the wall.

It’s reckless and dumb.

It’s your money…be smart with it.

Right now, one new pattern I’m watching is buying range movers on former Supernovas. 

For example, check the chart below on the OTC ticker ENZC.

That’s some good upward momentum for 3-straight days.

It has a similar pattern to DPLS…

Spiking…consolidating…spiking…

Of course it’s not an apples to apples comparison…but it’s pretty darn close.

Here is a longer term chart of DPLS…

And EZNC…

Once a pump…always a pump.

And given their recent momentum…maybe there’s a new pump on the way?

I don’t know.

I’m just speculating and testing new ideas out.

As long as I trade these small and keep my risk tight then I should be fine.

I encourage more traders to do this.

I know my students have. 

For example, Matt Monaco has made money trading NFTs and Mark Croock is crushing it with options, and those are two markets I don’t play in much.

Final Note

© Millionaire Media, LLC

If you want to have long-term success in trading then you must learn to be flexible and open to testing new ideas.

It’s the only reason why I’ve had so much success and longevity.

If you’re thinking about taking your trading to the next level, but think you could use some help, then check this out. 


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Author card Timothy Sykes picture

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 (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”