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Is This The Key To Surviving A Wild Market?

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Written by Timothy Sykes
Updated 5/2/2023 4 min read

Regional bank stocks on the edge of collapse… low-float Chinese pumps running…and the Big FOMC announcement today…

What a wild week and it’s only Wednesday. 

It’s easy to let your emotions get the best of you in a market like this.

In fact, if you’re not careful you can wipe out days, weeks, or even months worth of gains by making one mistake.

That’s why I’m constantly finding myself doing this one thing over and over.

It helps me stay focused, aware of the dangers that lurk, and puts me in a position to take advantage of low-risk/high-probability setups.

Not only will I share with you why it’s so critical you implement this…but I’m also going to share my thoughts on this volatile market.

 

Staying Fresh

My schedule right now is absolutely nuts. I’ve been flying across the globe non-stop.

I’ve been trading in Turkey lately, working on charity, and trying to raise more money for the people there after the devastating earthquake.

That said, my mind is not completely on trading.

That’s why I’ve taken smaller and more calculated positions.

One of those trades was on Friday, my Weekend Trade in the ticker symbol WETG.

Low-float Chinese stocks have been hot lately, with several of them having triple-digit moves in a single day.

I decided to take WETG late in the afternoon on Friday.

It actually traded higher in the after hours, giving me a chance to take profits.

But since this is a Weekend Trade…I really try to hold onto these until Monday morning.

I didn’t take profits and on Monday the stock was trading lower and I cut my losses.

Was this a bad trade?

No.

If you were watching Monday’s action you would have seen other Chinese stocks surging…

I had the right idea…just didn’t pick the right stock.

I don’t judge my trades based on if I lost money or not. Sometimes we can have a good idea but not make money on it.

That’s why it’s critical you review all your trades after each session. If you want extra credit, review trades you didn’t take, and try to figure out why those stocks made the moves they did.

For me, I review my trades to see what adjustments I need to make.

For example, the WETG trade taught me that I probably should look to take profits quicker when the action in these stocks are choppy.

And that’s what I did when I traded IDEX.

IDEX was experiencing its first green day up…

I like this symbol because it’s a former Supernova

And if there’s one thing you learn from doing this is that Supernova’s have a higher probability of becoming Supernovas again.

Similar type of setup here…I was long near the end of the day, hoping it could pop in the after hours and I could take profits.

It did exactly that…And I was able to book my profits.

My average price was $0.0449…and my exit was at $0.051…locking in a 13.5% gain.

Now, the stock did get up to $0.07 on Tuesday…but how could you have predicted that given the bloodbath in the regional bank stocks.

But guess what?

It’s okay because I’m tinkering right now…

Staying fresh and experimenting some new ideas.

And as long as I’m trading these plays with small size and managing risk properly, I don’t see anything wrong with that.

If you’re not sure what’s working in this market right now or trying to discover a new strategy that you can start implementing then I highly suggest you check out these two strategy presentations:

The Weekend Trade ====> Watch Here

Supernovas ======> Watch Here

You’ll be glad you did.


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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

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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 (205) 851-0506 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”