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Trading Recap

Tiny Trades, Big Profits

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Written by Timothy Sykes
Updated 8/8/2022 5 min read

I truly believe that ANYONE can become a profitable trader and build wealth through the stock market.

Over the years, I mentored over two dozen students who became millionaire traders in their own right.

So, it’s no surprise that when you see someone like my student Jack Kellog of Breakouts & Breakdowns pull in almost $300,000, people assume that it’s all about hitting homeruns.

Nothing could be further from the truth.

Let me throw you some stats from my trading account this year:

View every single one of our trades here at profit.ly

My average winning trade is $648.44 while my average losing trade is $341.98.

These aren’t big numbers by any stretch.

But who wouldn’t be happy pulling in over $100K a year trading the market?

I talk a lot about cutting losses quickly and locking in profits.

Now, I want to show you trades that illustrate this point.

You’ll see how I evaluate and manage trades to keep my losses small while maximizing my gains.

And these same techniques can be used by any trader to improve their performance.

TOMI Environmental Solutions Inc. (NASDAQ: TOMZ)

what are penny stocks and whats the difference between penny stocks and regular stocks
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While some traders like to make dozens of trades every day, I keep things simple.

I look for stocks that fit my chart patterns and then signals for an entry.

TOMZ is a perfect example of a stock where I took two tiny trades for a couple of nice wins.

At 8:30 a.m. EST, the busiest time for news and data drops, TOMZ released a statement that their Steramist provides protection against Monkeypox and other pathogens.

For anyone who hasn’t read the news, Monkeypox outbreaks continue to climb. While it’s at serious levels, it’s by no means a pandemic.

Plus, we already have vaccines to deal with the disease.

Nonetheless, before this year, it was rare to see cases outside of developing countries.

Now, it’s gotten bad enough that the mayor of NYC declared an emergency.

As you can imagine, anything tied to Monkeypox, like SIGA Technologies Inc. (NASDAQ: SIGA), pops on the slightest news.

So, I had a catalyst for a name that’s a Supernova from 2020.

Now that I have the stock identified, I look for a setup in the name.

I’m a big fan of either buying pullbacks or breakouts that push past important resistance levels.

In this case, I bought shares of TOMZ once the stock broke over the open of the day after a quick dip at a price of $1.40.

Unfortunately, shares didn’t follow through. However, I added to my position on a dip to $1.31, giving me an average price of $1.355.

I used the next major spike to sell into strength and lock in my profits at $1.42.

By no means was this a big win. But these little base hits add up over time.

Had the stock dropped below the low of the day I would’ve exited and cut my losses.

Now, as the day went on, I saw another opportunity with shares starting to break out on decent volume.

So, I waited a few minutes for the dip and bought on a pullback at $1.57.

I used the next spike to sell into strength at $1.66.

Neither of these were huge trades.

Yet, I waited for the stock to come to my entry, focused on getting the right price, and used my chart patterns and dip by strategy to lock in a profit.

After either entry, if the stock failed to move higher, trading sideways or drifting lower, I would immediately cut the trade.

I’m not one to give trades a lot of time. With the way I trade, I expect things to work out very quickly.

So, if a stock doesn’t act the way I want, I cut it loose.

That’s specific to the way that I trade. Some traders use strategies that require more time.

However, if you’re going to give a trade more time, you need to be aware of the additional risk involved and size your position accordingly.

Final Thoughts

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The key here is to develop a trading method that minimizes risk and maximizes profits.

I do this by watching for bounces to occur almost immediately.

I’m very particular about where and when I enter.

You should be too.

Don’t chase trades. Instead, wait for them to come to your price targets.

That way, your entry is close to risk, limiting your downside while increasing your upside.

—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”