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Trading Tips-Tim Sykes Penny Stock

What You MUST Do Before the Next Hot Market

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Written by Timothy Sykes
Updated 4/17/2022 12 min read

What You MUST Do Before the Next Hot Market: Key Takeaways

  • Learn the lessons my students used to crush the 2020 market…*
  • Top tips for new traders — discover what these millionaires wish they knew when they started…
  • It’s not just studying — find out all the ways you can grow as a trader…

Ready to learn to trade through ANY kind of market? Apply for my Trading Challenge here.

Learning from one great trader is good … but learning from six? That’s an optimal trading education experience! These millionaire students prepared for and crushed it in the 2020 hot market.* Now, they have 21 essential lessons to help you prepare for the next one.

Lessons From 6 Millionaire Traders

All my millionaire students learned penny stock patterns and strategies in my Trading Challenge. It isn’t easy, and it’s not for everyone. But these students prove that hard work and dedication can pay off.*

Here’s what every trader must do before the next hot market…

#1. Focus on the Process

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Every trader has to find what works for them. It starts with your trading education. Sorry, no shortcuts to success.

Focus on the process, not the money. The money can come after years of practice and study, but there are no guarantees in trading.

#2. Stay Humble

If you’re not humble, the market will humble you.

Remember that one trade won’t make you rich, but one bad trade can take you out of the game.

You never know how long a hot market will last. Be grateful for every opportunity.

#3. Learn Different Strategies

There’s a time to go long in the market and a time to go short.

Huddie and Kyle are primarily short sellers. But when the hot market came, Kyle says shorting was “quite painful.” They both adapted their strategies to focus on long setups.

Be ready and willing to adapt!

#4. Keep Things in Perspective

monday motivation why you should get in Trading Challenge chat
left to right: Jack Kellogg, Dominic Mastromatteo, Kyle Williams, Timothy Sykes – photo courtesy of Don Mash

The 2020 hot market taught a lot of traders bad habits. Many traders made money without rules or strategies. But a lot of traders — and even hedge funds — lost.

Don’t get caught up in chat room and Twitter hype. Keep things in perspective and focus on your setups and executions. Rinse and repeat.

#5. Have the Right Mindset

Don’t go all in, use leverage, or gamble on stocks going to the moon.

Take it one trade at a time. Practice good trading habits, swing for singles, and stay disciplined.

#6. Focus on Repeatable Patterns

Instead of chasing random spikes, focus on perfecting one or two repeating patterns. That’s how you’ll make it in this game long term. Build a solid foundation of knowledge.

Find what you’re comfortable with and tune out the noise. Then…

#7. Stay in Your Lane

Once you have a few setups you’re good at — stick with them. If you don’t know what you’re good at, test until you do.

My top students still focus on dip buys, breakouts, and the first red day.

Jack Kellogg has made over $8 million in profits and still trades my 7-step pennystocking framework pattern.*

Keep it simple and stick with what works for you.

#8. Don’t Try to Guess the Bottom Or the Top

jack kellogg and sykes in italy
© Millionaire Media, LLC

Dip-buying panics? Don’t try to guess the bottom.

Jack advises, “Look at the history of the stock. Has it had fake turns before?”

Dom says, “If you’re buying panics 3%, 4%, 5% down, you’re going to get caught in a lot more fake turns.”

Also, accept that some stocks won’t bounce. Be ready to cut losses quickly.

And when it comes to exits, don’t try to guess the top. Sell into strength and aim to take the meat of the move.

#9. Keep a Focused Watchlist

Personalize your watchlist to a few stocks that fit YOUR best setups. Don’t try to watch every hot stock.

Like Jack says, “You can only trade multiple patterns at the same time after you’ve done it for so long.”

#10. Avoid Overtrading

My #1 problem is overtrading. That’s why I’d rather miss plays than overtrade. It’s also why I only focus on A+ setups.

Everyone has their own strengths and weaknesses. Again, find what works best for you.

#11. Use the Sykes Sliding Scale

Jack uses the Sykes Sliding Scale to manage expectations and plan every trade.

He says, “Everything goes into it. What time of day is it? Is there a catalyst? What pattern is it? What’s my schedule and all that kind of stuff. And I just do that over and over again.”

And here’s another key part of every trading plan

#12. Use the Right Position Size

tim sykes and michael huddie sitting at table looking at laptops
© Millionaire Media, LLC

The right position size is imperative for risk management.

Huddie took a big loss early in his career. “Once I had lost 25% of my account in two or three weeks, it blatantly scarred me for the next three or four years of my life where I was just scared of size.” 

See how fast you can blow up an account? Taking too much size is scary, even for me. Trade small in the beginning and…

#13. Consider Your Risk Tolerance

When Kyle started trading he risked 1% per trade. Jack started with $50–$200 per trade.

Dom also uses a max dollar loss. “I started with $200 risks and everything I do is just dollar risks. So where my entry is and where the risk level is, the difference between that decides how many shares I take.” 

Learn about risk management here.

#14. Consider the Big Picture

All my millionaire students studied and practiced for three, four, or five years.* I’ve been trading for 20+ years. Recognize where you are in your journey and where the market is.

This is a marathon, not a sprint. All the years of slow markets, studying, and grinding prepare you for the next hot market.

#15. Focus on Learning

matt monaco in Italy
© Millionaire Media, LLC

You can’t rush the process. Matt says it best…

“Learn as much as you can. It’s OK to make mistakes. Keep them small, trade small. Because if it takes you two or three years, there will be another hot market. It’s a long-term game.” 

In the beginning, your goal should be to survive and learn — not make money.

Here’s Jack’s perspective: “Put your priorities straight. If you really want to make it in this game, you got to put 110% effort in every single day.”  

#16. Stay Motivated

Everyone gets into trading for different reasons. Dom wanted a job that doesn’t feel like a job. Now he plays golf, has a boat, and enjoys life.

Huddie thinks trading’s the most freedom you can have. When he crossed a million in profits, he bought himself a fancy suit and a car.*

Jack worked his butt off during the hot market, then took the summer off.

Remind yourself why you want to trade. That’s your motivation to do better every day.

#17. Prepare for the Next Hot Market NOW

You can’t go back in time. You can only put in 100% effort right now. So study everything you can now.

Huddie says if he could go back in time, “The thing that I would tell myself in the first six months is to watch “Trading Tickers”, “How To Make Millions”, and the “Pennystocking Framework”. Study those three DVDs like they’re your bible.”  

#18. Maximize Every Single Day

sykes and kyle williams on laptop
© Millionaire Media, LLC

Jack says, “Maximize every single day. Whether it’s learning or if you’re already profitable, try to maximize your patterns. Don’t compare yourself to others. Compare yourself to yourself. How are you doing on your journey?” 

Maximize every second, minute, hour, and day for your education. If you haven’t started yet…

#19. Start Today

“The best time to start is today. You’ll thank your future self later,” says Matt.

Do whatever you can to start NOW. Watch my YouTube videos, study my trades, and paper trade on StocksToTrade.**

Do whatever it takes! And always…

#20. Surround Yourself With Successful People

Matt credits a lot of his success to this quote: “You’re the average of the five people you hang out with the most.” 

In other words, “Level up your friend group.” Well put, Matt. Learn everything you can from successful traders. Then put the pieces together to suit you.

#21. Take Advantage of Every Opportunity

All my top students maximized opportunities in the hot market. They were ready when preparation met opportunity.

Ready to get started?

Kick Start Your Trading Education Today

tim sykes in arizona riding on a jeep
© Millionaire Media, LLC

These students worked and studied hard for YEARS to become millionaires.* Now they give back to the community with lessons, webinars, and Q&A in my Challenge chat room.

If you want to be part of a community of dedicated traders — apply for my Trading Challenge now.

Leave a comment saying “I will STUDY HARD!” if you appreciate these millionaire traders’ lessons. 


*Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. 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. I’ve also hired Kyle, Jack, Matt, and Huddie to assist in my education business.

**Tim Sykes has a minority ownership stake in StocksToTrade.com.

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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”