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Trading Tips-Tim Sykes Penny Stock

3 Principles I’m Drilling Into My Students

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Written by Timothy Sykes
Updated 7/18/2023 6 min read

The same economists who didn’t see inflation are those who didn’t see this recovery in the market.

I don’t try to predict the future…

Instead, I focus on price action, patterns, setups, and risk management.

It’s what has led me to make over $7.4 million in trading profits and help over 30 of my students on their way to becoming millionaire traders. 

And while it’s easy to get sucked into all the crazy action, we’re seeing now…

It’s even easier to go in the wrong direction and lose A LOT of money.

To help my students…and get their mindset straight…I’m telling them to focus on these three principles.

 

#1: Be Patient: Think Like A Retired Trader

Put me in front of my laptop all day and guess what I’ll do?

Trade…Trade…Trade.

I know myself and have a hard time controlling my actions if I’m in front of the screen all day.

That’s why I pick my spots…

I try to trade during certain hours and then focus the rest of my time teaching my students and working on my charitable foundation.

But besides stepping away from the screen, there are other things I do to help from overtrading.

Specifically… adopting the idea I’m a retired trader.

What does that mean?

Staying away from the market…only willing to jump into a trade if I find a setup so compelling it would make me sick to my stomach for not being involved.

It might sound silly to you…

But believe me…it works for me.

 

#2: Focus on Risk: Trade Like A Coward

trade like a coward - sykes
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Most newbies who get into the trading game start to think about all the money they are going to make.

But the truth is…

Most traders lose money.

And even the great ones don’t make money their first year.

That’s why you should focus on learning those first few years…

You have to respect the market…

I respect the market so much I trade like a coward.

Now, that doesn’t mean I’m scared to pull the trigger.

But I am cautious about where I enter a trade and the number of shares I trade.

I know small wins add up over time.

I also know that I can be wrong in my ideas.

That’s why I cut losses quickly when I am wrong.

Of course, there is a drawdown to this approach.

I’m often getting out of winning trades too early.

But it has worked for me, and I don’t think you can argue with my results.

#3: Learn To Think Independently: Avoid the Herd Mentality From Chat Rooms

The best traders think for themselves…

Why do you think I have so many students who have become millionaire traders?

It’s because they have developed their trading style and are self-sufficient.

However, if you hop on social media you’ll think trading is easy…

All you have to do is copy and paste trades that you see from chat rooms.

But those chat rooms are not your friends.

Often they are using you for liquidity.

Remember Atlas Trading?

They pretended they were helping traders…

Meanwhile, they were dumping shares on them after they pumped the stock up.

At least, those are the allegations about them…they’ll have their day in court…and we’ll have the full facts in the future.

But since Atlas trading…

Short sellers have become the new promotors…

And like Atlas, they are not your friends.

There are no shortcuts in this game.

If you just copy and paste trades from chat rooms, you will eventually get burned.

You can either take my word for it…or learn the hard way.

Speaking of learning…

Why don’t you take this chance to sign up for one of my free live workshops?

All you have to do is click here to sign up!

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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”