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Trading Tips-Tim Sykes Penny Stock

Small-Account Challenge: How You Can Work to Grow YOUR Account

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Written by Timothy Sykes
Updated 12/22/2021 6 min read

Small Account Challenge Key Takeaways

Many day traders start with small trading accounts.

If this sounds like you, keep reading … I can teach you to grow your small account.

The stock market’s a high-risk/high-reward environment. The more money I use to trade, the more money I can win. But that also means I could lose more.

That’s why I think starting with a small account is better. You won’t lose as much in the beginning.

If you want to survive in the penny stock niche, you’ll need to learn the ropes ASAP. That’s where I come in.

I opened a small account with TradeZero to show students how to maximize a small account in the market.

I want to show you what’s possible. Check this out…

What You Must Know at the Very Beginning

Learning to day trade penny stocks might be the most frustrating thing you’ll ever do. I remember when I first started out…

Stocks would spike hundreds of percentage points, but I had no idea how to predict their massive runs. But I kept at it. (Read more about my trading journey — get your no-cost copy of my autobiography here.)

Long story short, I cracked the code and became a millionaire.

Since then, I’ve started teaching. Now I have over 20+ millionaire students and counting! It’s been crazy the last few years.

My top students all forged their own paths in the markets, but there’s something they can all agree on…

Trading can be really frustrating in the beginning.

People get into stocks to make money. But that’s the wrong mindset! I know. It’s counterintuitive, I know. But the best traders I know learn the importance of focusing on the process first.

So forget about the profits and work to find your strategy.

And remember — small gains add up. That’s part of why I’m doing this small-account challenge. Again, I want traders like you to see what’s possible.

Read on to see how I’m growing my newest small account with the first two trades I’ve made…

Small-Account Challenge Trade #1

On December 16, Q BioMed Inc. (OTCQB: QBIO) released news of increased revenue. A classic earnings winner. I have a lot of experience with these.

I safely bought on a dip, then sold into strength as it broke out. It was a beautiful trade for a 15% profit from $0.425 to $0.49.

QBIO stock chart
QBIO chart 1-day, 1-minute candles (Source: StocksToTrade)

Notice this stock’s price. It was trading at half a cent.

That’s the beauty of penny stocks — their low price. You don’t need a big account to load up on shares.

My gain was just under $450. A lot of big traders look down on that kind of money. I don’t. The whole point of a small-account challenge is to grow your account with small gains and get over the PDT.

It’s how you gain experience, so when you’re ready, and your account is large enough, you can then start slowly scaling up over time.

And my percent gain was incredible! Most blue-chip stocks only move a few percentage points every day. I took the meat of the move.

Small-Account Challenge Trade #2

Not every trade will be a winner. Get used to it.

I’ve made over $7.3 million in profits trading penny stocks. But I still lose about a third of the time. (Check out all my trades on Profit.ly here.)

I’m not afraid to show my failures. Each trade — win or lose — is a lesson and an opportunity to grow. Let’s take a look…

My second small-account trade was later in the day on December 16. Illustrato Pictures International Inc. (OTCPK: ILUS) released news related to electric vehicles. That’s been a hot sector for a while.

In the afternoon, I bought it on a dip at $0.385 and ended up cutting it at $0.38 for a small loss.

ILUS chart 1-day, 1-minute candles (Source: StocksToTrade)

This is the key to penny stock trading…

Wait for the best setups and cut losses if they fail.

I only lost about 1% on that trade. That’s critical! Keep your losses smaller than your wins. That’s how you grow a small account. Cutting losses quickly is my #1 rule for a reason.

Join Me

If you always wanted to learn how to trade penny stocks … now’s your chance.

I can teach you the ins and outs of the stock market. I always share my experiences to help my students. But I’m warning you … this isn’t for the faint of heart.

Think you have what it takes?

Apply here for my Trading Challenge. Already a student? Join my small account challenge here.

Time to start studying!

Are you excited about this small account challenge? Comment below and share how much you’re starting out with. There are no wrong answers!

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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”