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Mentor Updates

Millionaire Mentor Update: Take It Trade by Trade

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Written by Timothy Sykes
Updated 1/9/2023 13 min read

Successful traders take it trade by trade. They don’t try to predict, they react.

Yes, an experienced trader might take speculative trades. But the key is they don’t get stuck in it. If it goes wrong, they get out. And if it’s speculative, they take a smaller position size.

It’s not about being right all the time. Nor is it about the money. It’s about learning the process, creating a plan, and sticking to it.

When you take it trade by trade it’s much easier to focus on the risk versus reward. A stock won’t bend itself to your will. The market never bends to your will. It doesn’t care about YOU at all.

Keep reading for more. First…

Observing Labor Day

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The market’s closed for Labor Day today. No doubt, celebrations will look different in 2020.

So I urge you to remember what this holiday is all about: the hard-working people who make this country tick. Think about how you contribute. Use the extra day off to prepare. And if you’re a big StocksToTrade fan like I am, be sure to check out their awesome Labor Day sale … I’ll give you more details about it later in this post, plus some special links for my readers to use.

Now, back to risk versus reward…

The Risk vs. Reward of Traveling

I’m still not traveling. It’s not worth the risk. The risk versus reward is bad. So I’ve been working.

One of the beautiful things about trading and teaching is that I can make money without risk — or at least very little risk. I’m very fortunate. I understand some people have to go out and some have to travel for work. If that’s you, please stay safe. We’re not out of this yet. As for me, I don’t have to travel. So I don’t.

But there’s plenty for me to do…

New Karmagawa Fundraiser for Elephants

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An estimated 100 elephants get killed by poachers every day. They’re killed for their ivory tusks, meat, and other body parts. The worldwide elephant population has decreased by 62% in the last decade.

If the poachers don’t get stopped, elephants could go extinct by 2030. We MUST not let that happen.

Karmagawa is donating 100% of funds raised to charities like the International Fund for Animal Welfare and the Sheldrick Wildlife Trust. Please donate whatever you can. We appreciate ALL donations, great and small. Together we’re going to save the elephants from extinction. Let’s do this!

So far we’ve raised $10,874 of our $200,000 goal. Donate to help save the elephants here. As always, if you’re not in a position to donate, share the link. Let’s prove the power of social media for positive change in the world.

Before I get to today’s important trading lesson … Happy Labor Day! The StocksToTrade team just shot this over to me. They’re having a special extended Labor Day Sale. (It runs through September 14.) Check it out….

StocksToTrade Labor Day Specials

For current StocksToTrade subscribers…

Save over 30% on your first three months of Oracle Daily Direction Alerts! (New ODDA subscribers only.) Receive an email before the market opens every day. Get the best trade ideas from STT’s proprietary Oracle algorithm. (You’re gonna love this.)

And for those of you not yet using StocksToTrade…

StocksToTrade 30-Day Trial with Breaking News Chat. Don’t miss this opportunity to test StocksToTrade with Breaking News Chat. I wish Breaking News Chat had been around when I got started. It would have saved me SO much time. (It’s been a game-changer for me in 2020.)

Trading Mentor: Trading Questions From Students

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The focus this week is on taking it trade by trade. Too many students want it to be an exact science. It’s not. Every trade is a little different. That’s why you should go into every trade with a plan. Learn how to create a trading plan here.

You also have to trade with rules. (I trade with these rules.) If you go into a trade without rules, how do you know when to exit? How do you know when to cut losses?

So there are two sides to this. On the one hand, it’s not an exact science. But there are rules to guide you.

With that in mind, let’s get to the student questions…

“$PASO spiked on news about a reverse merger but the filings sound overly optimistic. Is this just another penny stock pump?”

They’re all penny stock pumps. Everyone gets so obsessed believing the hype. Patient Access Solutions, Inc. (OTCPK: PASO) is no different. Expect the worst out of all penny stock companies.

New to penny stocks? Learn the basics with my FREE penny stock guide.

The funny thing is, PASO gapped down on day two after a big first green day. I had to take a small loss. It was surprising considering how perfectly it finished on day one. But was it a huge surprise? Let’s just say it wasn’t earth-shattering. I took my loss and moved on. And on my next trade, I made back all my losses and more.*

(*Please note: My results are far from typical. Individual results will vary. Most traders lose money. I have the benefit of years of hard work, dedication, and experience. Trading is inherently risky. Do your due diligence and never risk more than you can afford to lose.)

Check out the PASO three-month chart:

PASO stock chart
PASO chart: 3-month, daily candle, first green day failed on day two — courtesy of StocksToTrade.com

As you can see from the chart, if I had held PASO … if I’d said, “This one’s different” … it would have been a BIG loss. Some people say I’m cynical. But that helps me to follow rule #1: cut losses quickly. And THAT protects my profits.

So the lesson is to keep moving and expect the worst. Be cynical.

Next question…

“OTCs are hot. Why? Is this a trend?”

For whatever reason, OTCs have been hot. But not every day. Last week there were hot OTCs that went up one day…

But many of those same stocks dropped the next day. One of those was PASO from the first question…

People often ask me, “Why is this happening?”

I don’t know. Why is the sky blue? Why are we alive? What’s the purpose of life? I don’t have answers to those questions. And when it comes to trading…

I just try to react.

React Rather Than Predict

Do NOT try to predict the stock market. This question sounds like it comes from someone who wants trading to be an exact science.

If you see one OTC spiker … and then another and another … you say, “Wait a minute, this might be a trend.”

It’s no different than if you see Tesla spiking and then other EV makers start spiking. You say, “Ah, this is a trend.”

Or maybe you see a stock like ChinaNet Online Holdings Inc. (NASDAQ: CNET) start spiking like it did on August 31.

Check out the CNET three-month chart:

CNET stock chart
CNET chart: 3-month, daily candle — courtesy of StocksToTrade.com

As you can see from the chart, CNET is a recent former runner. So if other Chinese stocks that are former runners start spiking, you see a trend starting.

But the key is to take it trade by trade and understand how fast things can change. Last week, the S&P 500 and Nasdaq hit new highs. The Dow had its best day since mid-July and closed over 29,000 for the first time since February. Then the entire market tanked on Thursday and Friday.

That said, with these OTC plays I want them to spike as long as possible. The longer it lasts the better. Why? Because I love buying into multi-day breakouts. And I love dip buying the crashes.

Note: All these stocks are so low-priced that you shouldn’t attempt to short them. You know who you are, Stephen Johnson. Don’t make me get out the rope again.

This leads me to the…

Trading Lesson of the Week: Take It Trade By Trade

Repeat after me: “I will take it trade by trade.”

So many people set themselves up for disappointment and failure by being stubborn. Or proclaiming they’re taking this week or that month off. Or by holding and hoping. Or deciding my rules don’t matter for this trade or this stock.

A great play can happen on any day, at any time. You have no idea.

Yes, I teach predictable patterns, but I still lose 25% of the time. And I can’t tell you how many of my wins are me getting out because the stock is NOT doing what I want.

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So take it trade by trade. And be available to trade when there are trades available.

The more days you can be available to trade, the better. Not all day. If you can be there for the power hours, the market open and close, that’s good. And 2020 is a special year so far. So you should push it. Don’t waste it.

If/when we get a vaccine and life returns to some semblance of normality, whether that’s later this year or in 2021 or 2022…

… a lot of traders who are in the market now will be gone. 

Remember, most traders lose. Most of those people are losing now. They’re probably getting very unhappy. They can’t wait for different job opportunities to pop up.

During the pandemic, many don’t have much choice. That’s why there are so many opportunities each day. But when it ends, a lot of them will go back to the safety of their 9-to-5 jobs. So take advantage of this market while you can. Study while you can.

Are you ready to take the leap and become one of my dedicated students? Apply to join the Trading Challenge today.

Millionaire Mentor Market Wrap

As I write, we’ve had two days of market carnage following the best 100 days in stock market history. It wasn’t unexpected. We need corrections in the market. But nobody knew when it would happen. Not me. Not anybody.

But the thing is…

For me and my students, it doesn’t matter. We don’t try to predict the market. We react to it. Which is why today’s trading lesson is so important. As soon as you stop taking it trade by trade, you set yourself up for big losses.

If trading is like a battlefield, then every trade is a mini-battle. And sometimes, no matter how much you think you’re right, you’re gonna lose.

So study. Come to the battlefield every day prepared. Have a plan before you get into a trade. And if you lose, keep moving. There will always be another hot stock.

If you understand, comment below with “I will take it trade by trade.” I love to hear from all my readers, so comment below.

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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”