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Trading Lessons

The #1 Unexpected Strategy You Must Learn for This Market

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Written by Timothy Sykes
Updated 4/8/2022 4 min read

So far this year, it’s been pretty ugly for the broader market. Take a look at the S&P 500 ETF Trust (NYSE: SPY). It just failed the all-important $460 level.

And it’s no secret why.

The world economy is on shaky grounds.

I could talk at length about inflation, supply chain mishaps, the Russian-Ukraine war, and sanctions against Russia. Speaking of which, I just read this in the news…

Source: NPR

But despite all the uncertainty out there. I’ve managed to stay profitable. Here’s a screenshot from my Profit.ly…

Source: Profit.ly

And I’m not trying to shove my success in your face — especially if you’re struggling in the current market.

I want you to realize there’s a way to trade smart. And I can teach you.

I’ve been trading for +20 years. After countless market reversals, I’ve still managed to come out on top. It’s because of my unique strategy.

And it’s the same strategy my top students learned…

The Top Strategy Now Isn’t What You Think

tim sykes looking at laptop
© Millionaire Media, LLC

I’ll tell you what most traders are doing right now…

They’re panicking. The markets are taking a beating, and everyone’s trying to squeeze out a profit.

But not me.

Confused? Let me explain…

I haven’t traded much lately. When the markets slow down, I take a step back.

As a day trader, I only focus on certain patterns and setups. If I don’t see something I like, I don’t get in.

That’s the beauty of day trading. I sit in cash. So while everybody else is losing money in the market, I patiently wait for the perfect play.

Sure, sometimes my trades don’t work out. Nobody’s perfect. In fact, I only win 77% of the time.

I know that because I track all my trades…

Source: Profit.ly

And I’ve learned to control my losses.

Here’s the strategy…

Limit Your Losses

limit losses - tim arms open
© Millionaire Media, LLC

Remember, I focus on specific patterns. Those patterns allow me to buy with low risk and a specific loss level.

(Here’s my favorite pattern right now.)

That means if the price falls below a certain point, I cut it. The trade’s a fail, so I move on.

So the #1 strategy you need in this market — and every market? Cut losses quickly. Keep your losses smaller than your gains.

Don’t get hung up on losses. Instead, learn from them. And spend time looking for your next best play. There will always be another one.

I can teach you the patterns, no problem. But not in this post. That would take too long. And I already have a stockpile of study material for students to learn from.

If you really want to learn my strategy …

Apply for my Trading Challenge

I have 20+ millionaire students who started where you are today. Then they decided to join me. You can too!

Have you been overtrading in this market? How many trades do you make a day?  Don’t be nervous to share — let’s learn from each other!

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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

* 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”