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One Trade Can Change Everything

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Written by Timothy Sykes
Updated 10/17/2022 5 min read

One trade can change everything.

But not how you imagine.

Very few people hit the winning lottery ticket on one trade. But that doesn’t stop folks from trying.

And I’m not just talking about new traders who just started.

Last week, I watched veteran short-sellers, some of the best around, try to short Intelligent Living Application Group Inc. (NASDAQ: ILAG).

Few survived…

One trade CAN change everything.

Yet, without proper risk management, that one trade can ruin you.

Fortunately, it’s not hard to avoid these catastrophic situations.

All you need is the right mindset.

This is a text I received from one of my students.

Messages like this fill me with pride.

It tells me people used methods and mindsets I teach to avoid trading landmines.

Millionaire Challenge Students get access to my entire suite of education products, including LIVE webinars, hundreds of hours of video, premarket plans, and so much more.

I want to offer you a snippet with three simple strategies anyone can use to evade the most perilous trades.

Locate Your Weak Spots

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In corporate America, they say to climb the corporate ladder, turn your weaknesses into strengths.

That’s a hot load of garbage.

I say manage your weaknesses to make them tolerable and make your strengths great.

Everyone has their own strengths and weaknesses. No two traders are the same.

Long-term success means avoiding those massive losses.

Where do you think those are most likely to occur?

The goal isn’t to get rid of our blindspots but to locate them and work around them.

For me, I suck with large accounts and large-cap stocks.

Notice I say ‘suck.’ This isn’t something that I conquered. It is always with me. It’s a part of who I am.

I accept that and create strategies to work around that weakness.

For example, I reset my account most years to a reasonable size.

I’m also more vocal about my mistakes than my wins.

Calling out my mistake, assigning myself burpees…putting my pain out there for everyone to see keeps me honest.

Weaknesses can also be technical, such as understanding how to design a setup.

Plus, as you progress through your trading career, you will probably uncover new weaknesses.

It’s human nature to deny them.

It takes a stronger person to accept and work with them.

Survival of the Fittest

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Thousands of companies, funds, and traders went bankrupt during the Great Recession.

For some, it was a slow bleed over years.

MF Global was there one day and bankrupt the next.

Trading is an exercise in probabilities. We never know what the next moment brings, let alone the next day or week.

Traders only survive by expecting the worst.

Most stocks that trade below $5.00 are there for a reason – they’re unprofitable.

However, these stocks make great trading vehicles.

These are risky equities, typically of poorly run companies, that get hit with promoters and chat pumps…

Which is why I love trading them.

I don’t have to worry about as many hidden dangers lurking in the background

All the bad actors and obstacles are front and center.

That’s a lot harder with heavily traded stocks like Apple or Citigroup.

There, I compete against high-frequency traders, institutional funds, algorithms…the list goes on and on.

But even if I did trade those stocks, I would still expect the worst from them.

Back in February 2019, the SEC investigated The Kraft Heinz Company (NASDAQ: KHC) for improper accounting practices.

The stock, which typically traded in a range of 1.5% at best, dropped nearly 30% overnight.

Initially, this mindset could lead you to take a lot of small losses.

That’s ok.

With practice, you’ll learn how to slowly learn to turn those into breakeven trades and then tiny profits.

Don’t Force Big Wins

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I hit plenty of home runs over the years. However, I didn’t try to make these happen.

They occur as a natural part of trading.

Just like outlier events can send a stock crashing, some send them soaring.

I teach students in my Millionaire Challenge how to manage risk, lock in profits, and leave a portion of the trade on to capture even more.

A lot of the promoters on social media only post their huge wins because they don’t want you to see their massive losses.

I’m not a flashy trader who swings six figures daily.

My accounts grow slowly, steadily, and predictably.

And THAT’s how you create long-term success.


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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 (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”