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Trading Myths Debunked: Start with Less Money, Keep Your Job

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Written by Timothy Sykes
Updated 3/6/2023 6 min read

Two of the biggest misconceptions I hear about trading are:

  1. You need a lot of money to get started
  2. You have to give up your job or school to trade

After +20 years of trading my own money and 15 years of teaching people how to trade, I can confidently say both are untrue.

You don’t need much money to get started and don’t have to give up school or a career to trade.

Most of my now-millionaire students started with just a couple thousand dollars.

I made seven figures in 2020 and 2021, trading part-time. So I know from personal experience you don’t have to trade full-time to get incredible results.

In fact, there are several strategies I teach that require minimal time.

Today I’ll share with you what one of those strategies is.

Plus, the most important element you NEED to pull off the strategy and how it helped me make over $7.4 million in trading profits.

One Of My Favorite Strategies To Trade

I spend most of my time traveling, working on my charitable foundation, and mentoring students. Trading has become a part-time gig for me.

Nonetheless, I made $1.19 million in trading profits in 2020 and $1.07 million in 2021, trading part-time.

I’ve learned to trade around my hectic schedule.

And of my favorite strategies is the Weekend Trader. 

I love it because this trade happens on Fridays around the same time every week.

So if you’re someone who can only dedicate 1-2 hours per week to your trading, then this is the strategy I would tell you to study and master.

It has delivered some of my biggest gains in 2023.

On February 24th, I utilized the strategy to make $1980 in profits (I risked $2,955 in capital), a gain of 67% in just a few short hours on the ticker symbol FAGI.

It also delivered my biggest winner of 2023, a gain of $6,876 (I risked $30,863.25 in capital) in the ticker symbol GTII. 

For a full detailed breakdown of the strategy, watch this.

The short version of the strategy:

  • The stock must have a strong catalyst
  • The price action must be clean

Often, traders zone out on Fridays, they’re ready to shut it down for the weekend, and they often miss stuff that happens late in the afternoon.

That’s why you get a delayed reaction when some companies issue a press release late on Fridays. The big move doesn’t happen until Monday.

In other cases, in the world of penny stocks, a company will tell you in advance that a press release is coming, potentially over the weekend. They do this to pump their stock. And just like my previous example, you might get a delayed reaction, with the stock not making its big move till Monday.

It’s how I found FAGI and GTII. 

There’s a little bit more to the strategy, and if you want to learn more about it then click here. 

 

How Traders Mess This Strategy Up

Most people who get into trading do it because they want to make more money, improve their financial position in life, and reach their financial goals.

But their actions don’t align with their goals.

For some reason, they think they must always be trading to make money. And they’re constantly looking for stuff to trade.

That’s not the way you should be looking at this.

You should only be trading because you feel the opportunity makes sense and the risk-to-reward is in your favor.

Check out my stats:

Three out of four of my trades are winners.

I don’t trade for the sake of trading. I trade because I think I can profit from the setups I see. Of course, I never know what trade will be a winner or loser. That’s why I am willing to take my losses quickly.

When you first start trading, you know nothing.

You must invest your time studying and learning the setups, strategies, catalysts, and patterns.

But studying doesn’t mean trading aggressively. If you do trade, it should be tiny amounts because it takes time to learn all this stuff.

My best students didn’t make money their first year. Some it took two and three years before it started to click for them.

After developing your skills, you must master the next step…

Patience and Discipline.

Last Friday, I was on the prowl for my Weekend Trade.

I scanned these stocks:

ROBT

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The company had some insider buying—a decent catalyst, but the price action is pretty weak.

RIVN

The company had a decent catalyst with a rumor that it was going to be producing 20% more vehicles than originally reported… but the price action was choppy.

AMBL

A potential press release is in the works regarding its lithium deposits. A decent catalyst, but if you look at the chart, the stock pops and fizzles quickly. So this was another no-trade for me because I didn’t feel the price action was strong enough.

At the end of the day I decided not to take a Weekend Trade.

I know it’s boring right?

But I don’t trade for the sake of trading. Every dollar I make in the market gets donated to charity. My job isn’t to just slap trades on. It’s to find high-quality setups and play them.

If you’re struggling right now, try to figure out where you are lacking.

Do you not have enough skills yet or are you just not patient and disciplined enough?

Either way, I can help you if you’re serious.


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Author card Timothy Sykes picture

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”