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Wondering Which 5 Questions I Get Asked The Most?

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Written by Timothy Sykes
Updated 3/1/2023 7 min read

Ever since I hit the scene…

I’ve been getting flooded with emails and DMs from aspiring traders…

I try my best to respond, but given my hectic travel schedule and the overflowing volume of questions…

I’ve decided to answer the 5 questions I get asked constantly.

Are you curious?

#1 How much money do I need to start?

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I have some good news and bad news.

First, the good news.

Most of my +30 millionaire students started with a small amount of money.

Now, the bad news.

Most of them didn’t make money in their first or second year.

You see, starting with larger amounts of money means you’ll likely lose more in the beginning. Learning the catalysts, patterns, and strategies I teach takes time.

In trading, there are dozens of ways to make money. For example, one of my top students, Mark Croock, has experienced a great deal of success trading options.

However, I don’t trade options. And despite making over $7.4 million in trading profits, I would be a below-average trader if I traded options only.

I know my strengths and weaknesses. And I stay in my lane.

If you’re a newbie trader, you won’t know your strengths and weaknesses because you don’t have enough experience.

It takes time to learn risk management, deal with the emotions of trading, and develop the patience and discipline to succeed.

That’s why you want to start small, learn, and lose tiny bits of money initially.

Instead of asking how much I need to start with, you should ask how much I am willing to lose in year one. 

#2 Why Don’t More People Trade Penny Stocks?

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There are a few reasons why I think most people avoid penny stocks.

First, we’ve glamourized investing in America. The idea of set-it-and-forget-it investing is very appealing.

And if you have a high-income job, then investing in an index fund like the S&P 500 and earning a 10% return each year makes a lot of sense.

However, most Americans are living paycheck to paycheck and are not high-earners. They’ll have to take matters into their own hands if they want to achieve their financial goals.

Penny stock trading offers incredible opportunities. But you’ll rarely hear about them in the financial media because most of the attention is focused on investors.

The financial institutions need your money so they can collect their fat fees. They want you to believe that you can’t do it yourself.

In addition, the majority of penny stocks are crappy companies.

They are not investable.

That means your best chance at making money with penny stocks is trading. And as you probably know, most people who try to trade lose money and fail.

But I believe penny stocks have an advantage over blue-chip stocks. For example, there are dozens of analysts who cover Apple. How can you and I compete against an army of analysts whose sole job is to know the ins and outs of a company?

However, the majority of penny stocks have no analyst coverage. And most people who trade them are unsophisticated, degenerate gamblers. I’d rather compete against them, wouldn’t you?

#3 Aren’t Penny Stocks All Scams?

tim sykes in yosemite
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I’m not a legal professional, but I will tell you my philosophy here.

I expect the worst out of these companies. That’s why I look at them as TRADES ONLY. I don’t buy into any of the hype.

Many of these companies don’t make money and are bad businesses.

But I’ve also found that most people running these companies aren’t that smart.

And as I said earlier, I would rather concentrate on a catalyst like a press release or a piece of news than compete with an army of analysts who know the inside and out of a company better than me.

I think penny stocks follow a predictable pattern, and that’s how I’ve exploited them over the years.

#4 How Long Until I Make $1 Million Dollars?

Tim Sykes tosses his book An American Hedge Fund in the Alps
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The reality is very few people will ever reach $1 million dollars in trading profits.

I’ve developed a program that has produced exceptional results.

However, that doesn’t mean it will work for you.

Some people don’t have the time or patience to endure 1-2 years of losing money before they can potentially see results.

That’s why I would not place any monetary goals in the beginning. Instead, you should have process-oriented goals.

Think about this, my two top students, Tim Grittani and Jack Kellogg, made a combined -$2,600 in their first year of trading. They likely would have given up if they had focused on monetary goals in year one.  Instead, they focused on learning the process, and both have gone on to make 8 figures each.

Another reason why you shouldn’t have monetary goals is that you can’t predict the market. For example, 2020 was a wild year for trading, with plenty of opportunities. However, 2023 has been slow thus far.

That’s why you should focus on things you can control.

#5 What Are The Most Common Mistakes?

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Most newbie traders have irrational expectations. As humans, we overestimate what we can do in a year and underestimate what we can do over time.

Most newbies want results right away. These irrational expectations allow fear and greed to overrun them.

Penny stocks are built around hype. Newbies want that homerun trade, and fall in love with the idea of taking $1,000 and turning it into $50,000 to $100,000 on one trade.

While I’ve had some massive percentage gain wins in my career. The majority of my profits have come from hitting singles and doubles.

(Bonus #6) Where Can I Learn More?

If you want to learn more from me, then I invite you to check out my:

If you’d like to learn about my coaching program and how I can help you reach your trading goals…CHECK THIS OUT.

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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”