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Penny Stock Basics

8 Questions To Ask If You’re Going To Be Successful At Trading

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Written by Timothy Sykes
Updated 1/10/2023 6 min read

How do you know if you’re ready to start trading penny stocks and become my next Millionaire Trading Challenge student? So, you’ve browsed my site, you’ve read about my success and, more importantly, the success of my students and your curiosity is piqued by your potential.

I offer the Tim Sykes Millionaire Challenge to help my most dedicated students ready themselves to be successful penny stock traders. Think you might be a contender? Ask yourself these eight questions for additional clarity; believe it or not, you might be more ready than you think.

1. Are you curious? The first step toward trading penny stocks isn’t actually making a trade, although that will come quickly because you don’t need a big account to get started. Actually, it all really starts with a spark of curiosity. Are you curious about trading penny stocks? Perhaps you’ve heard about my Millionaire Challenge and were intrigued. Or, maybe you just heard about penny stocks when you watched The Wolf of Wall Street (you’re not the only one). No matter how you got here, curiosity is one of the first and most vital steps toward becoming a trader. Without a sense of curiosity and a desire to know and do more, you aren’t really ready to start trading.

2. Do you want the world and then some? Are you guilty of dreaming big? Do you dream of a better quality of life or superior belongings? Do you have serious and specific goals? If so, you may be ready to trade penny stocks.

While the art of trading penny stocks is a fascinating process, for most of us, it’s not a desire to trade that actually gets us into it. It’s a desire for a better life or the ability to attain particular goals that require money. Many students in the Tim Sykes Millionaire Challenge Team find that as a happy side effect, they fall in love with the process of trading, but rarely is it that desire that gets them into it.

If you’re a dreamer, if you want the world and then some, and are willing to do what it takes to realize your dreams, penny stocking might be for you.

3. Are you willing to admit you don’t know everything? I’m serious here. If you’re a know-it-all, you’re never going to get ahead as a trader. Confidence comes with time and experience. To get to that place, you need to admit that you need to learn things. The ability to admit that you don’t know everything will make you a better student, and a better trader.

This is a hard mental hurdle to get over for some people, but the ability to admit that there is so much that you need to learn is a great sign that you are ready to trade penny stocks and embark on my Millionaire Challenge.

4. Do you have good study habits? This goes hand in hand with the last point. To really gain your chops as a trader, you’ve got to develop good study habits. If you don’t have them, or never developed them, this doesn’t mean you can’t trade. It simply means that you’ve got to change your habits.

While you can find any of a number of tutorials online for developing good study habits, ultimately it comes down to consistency. Make a commitment to studying reliably and in a similar routine each time; this will help you stick with it.

5. Can you stick with it? Are you a serial starter…followed by a quick stop when things get hard? If this is the case, penny stocks aren’t going to be for you, nor is my Millionaire Challenge, until you shift your mindset.

Three easy things that can help, as a quick FYI, are as follows. First, setting goals can help keep you motivated. Second, joining my challenge provides a level of accountability. Third, having a mentor can help with general advisement and assistance.

6. Can you handle risk? Are you cavalier with your money, or do you always play it safe? It’s important to evaluate your comfort level with risk before you embark on a career in trading. Let me clarify: you are risk averse, this does not mean you can’t be a trader. Awareness of this fact can be the first step toward combatting it.

Risk is inherent in trading. It’s just part of the process, but it’s also part of why you can reap so many financial rewards from it. It’s not so much that you ever have to love risk but to be successful as a trader, you must reach a place of comfort with it.

7. Are you able to learn from your mistakes? I don’t want to scare you, but the fact is that as a trader, you will make mistakes. Sometimes a lot of them. Even the most responsible trader doesn’t get it right all of the time, because there are just so many variables.

However, here’s the key to making mistakes an asset: the ability to learn from them. Are you able to learn from your mistakes? Are you able to take a step back and see how this mistake can inform you and help you move forward better and stronger in the future? If so, you are a great candidate to become a trader.

8. Are you ready? This is really a gut instinct kind of question. When you look at your life, and you look at what you could potentially gain from becoming a trader, and also consider what it will require of you…does it seem like it’s for you? Basically, what I am saying here is…are you ready for this jelly?

Becoming a successful trader isn’t for everyone, and that’s fine. But if you’re curious, if you’re willing to learn, and if you’re willing to make your wildest dreams come true, then maybe it’s time to see what the next steps are.

Anyone can try their hand at trading penny stocks. However, to truly be a promising and good trader, you need to commit yourself mentally to the process of learning the ins and outs of the market and how to do things right. For those budding traders who are ready, my Millionaire Challenge is waiting.

Are you ready to make your dreams come true? Leave a comment and let me know as it’s not an easy journey, you’re going to have to study harder than you ever thought possible…but if you’re willing, I’ll change your life so let me know! 

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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”