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Success Stories

Why the Best Revenge is Massive Success

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Written by Timothy Sykes
Updated 12/20/2022 5 min read

Anyone can learn to trade the market profitably.

Quality training will get you to your goals…IF you put in the work.

No one knows this better than professional athletes.

To get to the top, they GIVE EVERYTHING to the game.

Former NFL Star Ellis Hobbs joined my MILLIONAIRE CHALLENGE in 2016.

But he wasn’t my first NFL student.

That was Plaxico Burress.

Burress never treated trading like a business.

So, he got out what he put in…very little.

For non-NFL junkies…

Ellis Hobbs set the record for the longest punt return in 2007.

Plaxico Burress caught the game-winning touchdown that same year while defended by Hobbs.

Unlike Burress, Hobbs realized that trading couldn’t be a part-time hobby.

If he wanted to succeed, it meant treating it with the respect it deserved.

By the time the 2020 bull market began, Hobbs already had four years of solid study under his belt.

In 2020, Ellis netted $220,000 in gains, tacking on another $204,000 in 2021.

Burress may have one on the field…

But Hobbs won in life.

Today, I’m proud to call him my student.

He gives back to his local community and traders alike.

So, don’t be surprised if you catch him in the chat room trading right alongside you…

Or offering up some tips in a live webinar.

As you might imagine, Ellis leads a busy life, something we all can relate to.

Business Insider wrote an article on his trading journey.

While they covered the highlights, I wanted to give you a taste of what Ellis teaches when he steps up to the mic.

You’ll be surprised at how practical and intuitive his approach is.

Ellis’ Process

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Ellis trades stocks long and short.

But he doesn’t like to make things complicated.

In 2020 and early 2021, he’d take long trades on multi-month runners leveraging the 7-Step Penny Stock Framework.

Here’s a great example he offered in a recent webinar.

Ellis brought up a chart of Summit Therapeutics Inc. (NASDAQ: SMMT).

He laid out his process to identify multi-day runners which includes looking for the following:

  • A stock with a history of running multiple days
  • Up 20%, 50%, 100% in the first two or three days or within the history before
  • Heavy volume

Once that’s complete, his job is to find the pattern with support and resistance.

Ellis candidly said he didn’t play the initial run. That doesn’t mean there aren’t trades, just that isn’t his style.

Stocks are like humans. They can only run so far.

Eventually, traders will want to take profits, move on to something else, or find other reasons to stop buying.

Some last longer than others. But most go 3-4 days.

Then he looks for the first red day to flag a momentum shift.

Zoomed in on SMMT, this is what it looks like.

Now, when he talks about the first red day, he’s describing the intraday price action.

His initial entry was near the $4.00 whole number.

He knew he could risk the recent highs near $4.50 because there was range to the downside.

Shares ran from $0.6 to $4.50.

Ellis looked for a momentum shift, took the trade as close to the highs as he could, and shorted for lower prices.

As the stock declined, Ellis took profits along the way.

Risk management is key for any successful trader, longs or shorts.

You have to know where your stop loss, profit target, and entry point before jumping in.

Just as important, traders need to keep their size small enough to keep them in the trade.

Taking outsized positions makes folks nervous and less likely to give trades a chance to work.

Now, Ellis also pointed out that long and short traders need to be aware of key developments like short sale restrictions.

Once a stock drops 10% or more from the prior day’s close, it’s hit with a short sale restriction that sticks for the entire day.

The rule only permits traders to short a stock on upticks once implemented.

Essentially, market orders for short sales disappear.

The point of this nuance is knowing that it reduces downward pressure from short sellers.

Coupled with other momentum signals, long traders can use this to look for momentum shifts in the other direction.

If you go back to the chart, you’ll notice that Ellis covered around $3.60, roughly 10% below the prior day’s close.

That’s not a coincidence, it’s preparation!

Everything discussed here only covers 20 minutes of Ellis’ recent hour long webinar.

So, when I tell you that the Millionaire Challenge is content-rich, I mean it.

I want to help everyone craft their own strategies and process to profitably trade the market and achieve their goals.

Do yourself a favor and sign up for my Millionaire Challenge.

–Tim


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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 (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”