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Trading Tips-Tim Sykes Penny Stock

Why Small Trading Gains Have Massive Long-Term Potential

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Written by Timothy Sykes
Updated 1/5/2023 12 min read

I’m a big fan of small trading gains.

I know that might sound strange coming from someone who runs a trading education business.

Promoters even make fun of me for it…

I don’t care. I consider it my duty to be fully transparent as a trader (check out all of my trades posted publicly here) and to be completely honest about the trading industry.

It’s true that I’ve made millions. But it didn’t happen overnight. It took me 20+ years to build my account to where it is — over $6.9 million in profits as of late March 2021.* You can learn more about my story in my autobiography, “An American Hedge Fund.”

I’ve had some big wins over the years, but most of my profits are the result of small trading gains adding up over time.*

Most people don’t want to hear that … They want to know how to get rich quick.

Sorry, it doesn’t work that way. For traders who really want to be players in the penny stock game, this is a very important lesson…

(*Please note that my trading results are not typical. Most traders lose money. Individual results will vary. Trading is inherently risky. Before making any trades, remember to do your due diligence and never risk more than you can afford to lose.)

Why Don’t People Talk About Small Trading Gains?

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There’s a reason why most people don’t talk about small trading gains. They’re not sexy.

I’ll be 100% honest: posting about a $65 gain on Twitter probably won’t get as many likes as posting about a $65,000 gain.

Then again, who gets into trading for social media likes?

Unfortunately, plenty of people…

There were a lot of people who saw the GameStop Corp. (NYSE: GME) short squeeze, chugged a few energy drinks, and thought ‘I wanna make bank, bro!’ I wish them all the best in their trading … But I don’t want them as my students.

Following hot picks and chasing alerts doesn’t work in the long run.

I’d rather work with traders who are interested in…

  • Learning about stock patterns
  • Focusing on the trading process and how small trading gains add up
  • Developing an intelligent trading strategy

If that’s you, you might be interested in my Trading Challenge. I make potential students apply — I don’t want students who just want to get rich fast. So I need to weed out lazy people.

Ready to get into the right mindset about trading?

What Are Small Trading Gains?

You’re probably wondering what small trading gains mean from a money standpoint.

First, let me be clear — there are no guarantees that any trader will make a profit.

But even if they do profit, it’s still not an easy question to answer.

Some traders might consider small trading gains to be in the $10 to $20 range. For other traders, small trading gains might be more in the $1,000 range.

The reason it’s hard to give a dollar amount is that every trader’s different. The amount will differ depending on account size, risk tolerance, and trading style.

Just to demonstrate that difference, consider the average gain of two of my up-and-coming students…

My student Kyle V., who I recently featured in a blog post, is currently up over $180,000 in profits. His average gain is about $140.*

penny stock checklist

Then there’s my student Matthew Monaco, who recently passed the million-dollar profit mark and is currently over $1.6 million in profits. His average gain is $1,341.*

As you can see, their average gains are relative to their account size. And in both cases, these are relatively small trading gains on a per-trade basis. But they add up over time!

(*Please note that Kyle V. and Matthew’s trading results are not typical. Most traders lose money. Individual results will vary. Trading is inherently risky. Before making any trades, remember to do your due diligence and never risk more than you can afford to lose.)

Why I Go For Singles, Not Home Runs

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Here’s more proof that small trading gains add up…

I’ve made over $6.9 million in profits over the course of my career trading penny stocks.*

But it’s not like I’m making incredible $100,000 trades every single day.

Sure, I’ve had some standout trades. And I’m thankful for them when they come along.

But my average gain is $1,732.*

At writing, my profits have been the sum of over 6,500 trades — thousands of small trading gains, adding up over time.*

Part of why my gains are relatively small is because I trade scared…

For example, consider my recent trade on Exro Technologies Inc. (OTCQB: EXROF) on March 2, 2021.

I dip bought 5,000 shares of this recent winner at $2.28 after it crashed. My goal was to profit 5%–10%, but I was ready to get out fast if I was wrong. I sold soon after at $2.45 and made an $850 profit.*

I could have stayed in longer and made more. The next day it went up even higher…

But OTC stocks are sketchy and I’m very nervous about overnight holds right now.

I didn’t need to get greedy. I was happy to have my small gain and move on!

The Investment Traders Should Really Make

I’m not an investor — I’m a trader.

There’s a difference. I’d never invest in the companies I trade. Most of them will eventually fail. I trade short-term fluctuations of low-priced penny stocks.

But there is something I believe is worth investing in…


I always say that traders have two accounts: their monetary account and their knowledge account. Everyone wants to build their monetary account. But here’s the thing…

Nobody can control whether they’ll make money in the stock market. Most traders lose. 

Even the few traders who do make money have no way of controlling how much money they will make.

But there are two important things you can control. The first is your mindset…

Get Out of the Money Mindset

Instead of focusing on getting rich, focus on getting smart.

I wish more traders would get out of the money mindset where they’re focused on getting rich. Instead, I’d love to see them devote time and energy to actually learning how the stock market works.

Recently, I wrote a post about Mariana, my student who just passed $1 million in profits.*

(*Please note that Mariana’s trading results are not typical. Most traders lose money. Individual results will vary. Trading is inherently risky. Before making any trades, remember to do your due diligence and never risk more than you can afford to lose.)

It wasn’t always easy for her … When she first started trading with a $15,000 account, she quickly lost $3,000.

She realized right away that she needed to adjust her mindset if she actually wanted to survive.

So she started studying DVDs like my “PennyStocking Framework” and top trader Tim Grittani’s DVD “Trading Tickers.” She followed the Trading Challenge chat room and devoted herself to learning how penny stocks work.

She also dialed back her positions big time. Sometimes she’d only take 100 shares in a stock. She wasn’t making much money … But it wasn’t about money. It was about building up muscle memory and experience.

It helped her develop a more conservative, smarter approach to trading. She began to improve. Mariana was able to scale up her positions as she became more confident in her strategy and better about cutting losses.

Now, she’s a millionaire.*

But you know what? As I write this, her average gain is $1,018. The sum of her profits is an impressive amount, but it grew as the result of many small trading gains.*

Cut Losses Quickly!

The first thing traders are in control of changing is their mindset.

The second one is cutting losses.

Cut losses quickly! It’s my #1 trading rule.

By cutting losses quickly, you can preserve as much of your money as possible and move on to the next trade. But if you hold and hope, there’s no telling how bad it can get.

For example, consider Rocket Companies Inc (NYSE: RKT) … People took the company’s name too literally when the stock spiked from the $20s to the $40s. They thought it had to keep going.

It didn’t. Now, a lot of people who hoped it would go higher are holding on to their shares and hoping for a bounce.

Maybe it will. Maybe it won’t. Who wants to deal with that kind of stress?

Instead of holding and hoping, smart traders figure out their maximum loss before the trade. When the stock reaches that point, they get out.

Why I Love Small Trading Gains…

If you ask me, three things have kept me in the trading game:

  • Cutting losses quickly.
  • A willingness to adapt.
  • Many small trading gains added up over time.

It might make me the laughingstock of social media, but I’m not afraid to say it…

I love small trading gains!

People might make fun of me for my small trades or for exiting a stock too soon, but I don’t care. I’ve been doing this for 20+ years. So I’ve seen how bad things can get when you get greedy and go for home runs rather than singles.

Trading isn’t just about moving money around. It’s a mental game more than anything else. That’s why it requires so much practice and discipline. Are you interested in learning more about my strategy? Consider applying for my Trading Challenge.

Do you understand why small trading gains are so important? Leave a comment and say “I love small trading gains!” 

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Author card Timothy Sykes picture

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”