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Dodging Doubt: 3 Strategies to Bulletproof Your Trading Decisions

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Written by Timothy Sykes
Updated 8/29/2023 7 min read

After 20-plus years of trading and banking, over $7.4 million in profits…

I wouldn’t fall prey to a mistake like this…

But last Friday, I received a humbling lesson.

I spotted what looked like a flawless setup, ticking every box.

But instead of banking a potential 10-20% profit, I watched the trade on the sidelines.

The culprit?

Outside voices.

Yep, I second-guessed myself and let external opinions get in the way.

If a veteran like me can make such a blunder, believe me, it’s a pitfall any trader can fall into.

Doubting yourself can spiral into overtrading, revenge trading, tilt, and other account-draining disasters.

So, how do I keep such doubts at bay?

Here are three steps I take to avoid second-guessing myself.

The Trade That Got Away

If you’ve been reading the blog this year, you know one of my best trades this year has been my weekend strategy. 

The potential trade I was looking into was in the ticker symbol MCOM.

One of the reasons why I liked it was that the company was set to announce news late on Monday…

Usually, traders will overlook news late in the day on Friday because they’re winding down and getting ready for the weekend.

However, if the news has substance, it will likely be talked about over the weekend, and chances are it will be some bullish price action heading into Monday.

That’s why I always look for strong-moving stocks late on Fridays with catalysts.

So there we have MCOM telling us they will announce the news on Monday…

Source: StocksToTrade

But instead of just going with what I knew works…

I let outside voices interfere with my decision making.

Some of my students told me the company was trash, and that they were just a pump and dump.

And while I should have been focused on the risk vs. reward, I let those opinions sway my decision.

On Friday, the shares closed at $0.08.

And by Monday, they traded at a high of $0.11.

That’s a 37% move. Of course, I normally don’t hold for that long, but I believe I could have gotten 10-20% out of it.

Either way, I wasn’t in the trade, so it doesn’t matter.

So how do I stop this from happening, and how can you use this in case you’re in the same situation?

#1 Be Data Dependent

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I journal all my trades. Doing this allows me to understand better how I’m trading and identify what is and isn’t working.

And, like I said earlier, my weekend strategy has been one of my best performers all year.

That’s not just me thinking it…that’s what my numbers tell me.

That alone should have been enough reason for me to take the trade.

It’s a setup that’s worked for me in the past and recently.

That’s why it’s important to know where you stand.

You should know what setups you trade well and which you don’t.

Not only that but be aware of what’s currently working in this market.

That’s why journaling is so important.

I keep all my stats on Profit.ly, check them out for yourself. 

#2 Trading Is Not A Team Sport

Tim Sykes checking his top penny stocks list in Italy
© Millionaire Media, LLC

I’m not against chat rooms. Heck, I run one myself.

I think it’s good when people share news and point out moving stocks.

But that’s it.

I want all my students to be self-sufficient.

I don’t want them to depend on anyone but themselves to point out their entries and exits.

Sometimes, when you have too many voices in the mix…

You end up with analysis paralysis.

Do you know who likes to trade in teams?

Short-sellers.

And it’s their herd mentality that often gets them crushed during a short squeeze.

It’s okay to have trading friends…

It’s okay to discuss your trades after the fact, but you must learn how to think and act independently.

#3 Stick To Your Trading Plan & Rules

how to read level 2 trading
© Millionaire Media, LLC

I should have taken the trade-in MCOM.

And put a plan together.

On trades like that, I’m aiming for 10-20%. And if I don’t get that, or if the stock doesn’t move, then I’m out.

I aim to cut losses quickly.

I don’t want to sit around, hope, and prey, it moves my way.

No trade should be stressful if you have a plan and size correctly.

That’s why it irritated me that I didn’t follow through even though I liked the setup.

Every trade has the chance of being a loser.

There are no guarantees in trading.

If you can justify your reasoning and create a plan that makes sense based on risk vs. reward, then you’ve got to trade your plan.

Getting 1% Better Everyday

Tim Sykes pointing at you.
© Millionaire Media, LLC

None of my 30+ millionaire students became success stories overnight.

In fact, most of them struggled during their first and second year.

That’s why I tell my students not to focus on the profits during the early stages of their journey.

If you can get 1% better each day, then you’ll be 37x better within a year.

Here’s your chance to get 1% better today…

Each day my team and I host live training sessions.

They are geared at making you a better trader.

We host these live training sessions at no cost to you.

All you have to do is register.

CLICK HERE TO ATTEND OUR NEXT LIVE CLASS. 


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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”