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Trading Recap

Confession Time: I’m In A Trading Rut

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Written by Timothy Sykes
Updated 3/16/2023 6 min read

Trading is a beast with teeth…

And it doesn’t care who you are or how much experience you have.

You’re going to have days where you feel like a god…and others where you’re wondering why even bother.

It’s just the nature of the game.

And right now, I’m in the thick of it.

Even with over 20 years under my belt, I’m still getting my butt kicked from time to time.

But instead of whining and blaming the market or bad luck for my failures, I sit down, grit my teeth, and analyze every last decision I’ve made.

I want to know where I’m screwing up, and what I can do to fix it. Because let me tell you, if I’m going through these struggles, then you better believe will too at some point.

I’ve mentored over 30 students who’ve become millionaire traders

And I can tell you straight up…

Success in trading is a rocky road.

But you know what’s cheaper than paying the market through trading losses?

Learning from my mistakes.

So if you’re feeling like you’re in a rut, pay attention.

This could be the important thing you read today.

 

Figuring Out What’s Going Wrong

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Over the first two weeks of March my trading hasn’t gone anywhere.

But instead of blaming the markets I sit down and analyze my trades.

I then share my insights with my challenge students so they can learn from them too. 

So what have I noticed that’s different in my trading?

I’m trying too hard.

Now, this is also a problem I see from a lot of newbie traders. They want to make money so bad that they force trades.

Maybe they feel pressure from their family and friends because they were told that trading is a waste of time and that they’re likely going to lose money…

So they try to move fast so they can prove them wrong.

For me, I’ve already proven myself. And I have over 30 millionaire students, proving that what I teach can work. 

But if I stay in front of my computer screen for too long…I have the tendency to force trades.

There have been some good opportunities in the market.

However, my eagerness has gotten the better of me.

Recent Trade Example

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Last Tuesday I saw a panic dip buy opportunity in the ticker symbol EPAZ. 

It looked like there was one giant seller, which gave me the impression that once the seller was out, the stock would rip higher.

I also noticed that the stock had a ton of support at the $0.093 to $0.094. Knowing where support is gives you a better idea on where you can get out.

The stock didn’t make an immediate bounce…and given all the volatility in the market…I decided to play it safe and get out for a tiny gain.

Of course, shortly after I exited the position, the stock rallied nearly 70%

LOL.

With that fresh in my mind…I was thinking I wasn’t going to miss the next EPAZ. 

The next day…I saw a dip buying opportunity in another recent big runner trading off its highs and near support level. It was in the ticker symbol ABML. 

Now, if it did anything close to what EPAZ did I figured my execution didn’t have to be that precise.

Here’s where I went WRONG:

  • I wasn’t thinking about the downside
  • I was watching the stock too early
  • I wasn’t patient…I was thinking I don’t want to miss this
  • I was trying too hard

So I got in at $0.94…

But that was a bad entry…support was near the $0.83 to $0.85 level.

Again, I had the wrong mindset.

When I’m on my game, I don’t mind missing a trade if it’s not at my levels.

But I was feeling antsy.

So when the stock started to downtick, I quickly bailed taking a small loss.

I re-entered again later in the afternoon, this time closer to the support level.

But because the bounce didn’t happen quickly enough…I cut this trade too for a small loss. Had I been more patient the second time around, I would have been able to get a decent win out of it.

To my credit, I’m taking losses quickly.

However, I am not happy with my overtrading.

One thing I’m constantly telling myself is that this isn’t the market for pressing the action. I made $1.076 million in trading profits in 2021 because that was a hot market. When things cooled off in 2022, a down year for most traders, I remained patient, and managed to make $130K in profits.

2023 is a slow year so far. That means I need to trade less and wait for the right opportunities. Overtrading hasn’t helped me, and I need to get back on track.

This is what I’ve been telling my students.

If you’re struggling right now, don’t blame the markets. Dig into your trades and analyze where you’re going wrong.

I do it every day. And while I might be in a mini-slump right now…it won’t be long until I get back on track.

If you found this helpful, and want to learn more about the program that’s helped over 30 of my students become millionaires then check out this link. 


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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”