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Can You Profit From The Banking Crisis Without Trading Bank Stocks?

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Written by Timothy Sykes
Updated 3/21/2023 4 min read

It seems like anywhere you turn, you hear about the banking crisis.

It created volatility in the markets…and has led to a lot of uncertainty.

Safety first is one of my primary goals…and something I stress to my students.

And that’s why I haven’t traded any banking stocks.

You see, I don’t want trading to be stressful.

But don’t be mistaken. Just because I’m not directly playing banking stocks doesn’t mean I’m not taking advantage of the opportunities.

I am just using a different approach.

I find it to be significantly less stressful but just as potentially profitable.

In today’s lesson, I’ll explain my strategy and how I recently profited from the banking crisis without trading any bank stocks.


An Unlikely Winner In The Banking Crisis

Tim Sykes checking his top penny stocks list in Italy
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The financial sector has had a tough twelve months. Before the banking crisis, cryptocurrencies were in free fall.

Many of the top crypto firms and exchanges got decimated in late 2022, most notably FTX, the world’s second-largest crypto exchange, which filed for bankruptcy.

Riddled by scandals and uncertainty, crypto investors saw the bubble pop as bitcoin dipped under $16K, a drop of 77% from its all-time high of $67,800.

Bitcoin was dead in the water… barely trading above $20K on March 10, 2023…

But thanks to the collapse of Silvergate, Silicon Valley Bank, Signature Bank, the deterioration of regional banks, and the demise of Credit Suisse…it was again viewed as a safe haven investment.

Ironic…I know.

Bitcoin prices surged from $20K to $28K in less than two weeks.

And while I don’t trade cryptocurrencies…I have no problem trading stocks related to them.

How I Played The Banking Crisis Without Trading A Banking Stock

Mondays are historically bad days for stocks.


Because we have the entire weekend to read about all the negative things that are happening in the world, it typically makes investors nervous and scared. And because the stock market isn’t open on the weekends, the first reaction on Monday is to sell first and ask questions later.

On Friday, I thought if people read about all the problems banks faced over the weekend…and saw crypto raging…it would be bullish for crypto stocks on Monday.

So late on Friday, I bought shares of Bitfarms Ltd. (BITF), a cryptocurrency mining company. By the way, this is a weekend strategy I teach to all my students. 

For the most part, crypto stocks can be very volatile, and many of them were getting toward their yearly highs…

I picked BITF because it was a laggard. Meaning that it didn’t go up as much as the other crypto stocks. And I thought it had some catching up to do.

I got in at around $0.93 on Friday and out on Monday morning at $0.972.

That’s nearly a 5% gain in a trade I thought was relatively low risk.

It was nothing huge…but a nice solid single over the weekend thanks to the continued banking crisis and crypto benefiting as a result.

In this market, I want to be conservative and play for singles.

Once things heat up again…I’ll get more aggressive.

Bottom Line

conclusion reversal cadlestick
© Millionaire Media, LLC

Big market themes can impact several sectors. Bitcoin stocks have benefited during the banking crisis. Instead of trading risky banking stocks, I decided to play it safe and go with a crypto stock using my weekend strategy.

Next time you see a big theme in the market, ask yourself what some other ways to play it without going directly into the fire are…

If you’d like to learn more about the mentoring program and how I’ve helped over 30 of my students, on their path to become millionaire traders, then click here.

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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”