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Mentor Updates

Millionaire Mentor Update: Realized vs. Unrealized Gains

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Written by Timothy Sykes
Updated 1/4/2023 13 min read

Serious traders understand the difference between realized and unrealized gains. Sadly, a lot of newbies follow promoters who say, “Don’t sell, buy the dips, and keep holding. This is an investment.”

But it’s not an investment. And the past couple of weeks we’ve seen a lot of stocks spike with very little continuation. Sometimes they fall nearly as fast as they spike. Other times they fade the rest of the day.

Worse, promoters post screenshots of unrealized gains. The same promoters who say it’s not a loss until you sell give different advice for a win. Unrealized gains are meaningless.

Keep reading for more on realized vs. unrealized gains. But first, last week featured two big milestones…

Karmagawa Tops $6 Million in Donations

For the past four years, I’ve pursued another passion aside from teaching and trading. When the market closes every day I work on my charity, Karmagawa. It takes a huge amount of effort. But it’s amazing giving to charities where our donations have the biggest impact.

If you’re reading this, I consider you part of the Karmagawa community. Thank you for sharing our posts and supporting us by wearing our sustainable merch.

We also had another announcement last week…

Again, thank you for helping us to change the world. Keep sharing. Now let’s talk trading…

Trading Mentor: Unrealized Gains Are Meaningless

A successful trade doesn’t happen until you exit. You can have all the unrealized gains in the world, but it doesn’t matter. Many people in penny stocks claim to have big gains, but they fall for the hype. They don’t lock in their gains and they come crashing down with the stocks.

That’s not trading.

If you look at the Dow and the S&P 500, they’re hitting new highs almost every day. But penny stocks just aren’t the same as December, January, and February. Which means you have to adapt and adjust.

And a lot of traders can’t do it. I hear people saying, “This is the worst market.”

They got spoiled. They learned the wrong lessons from BS ‘free’ chat rooms where everyone follows each other. They also lie about when they sell.

Never follow alerts. Ever. I alert students in real time so they can learn in real time.

Show Me the Exit

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One reason we created Profit.ly is because too many websites focus only on entries. But you have to exit for a trade to be complete.

I’m not saying my way is the only way. I know successful swing traders. And Trading Challenge chat moderator Mark Croock is very successful with options.*

(*Mark’s results are not typical. Individual results will vary. Most traders lose money. Traders like Mark and I have the benefit of many years of hard work and dedication. Trading is inherently risky. Always do your due diligence and never risk more than you can afford to lose. I’ve also hired Mark to help in my education business.)

But the promoters say, “Let’s buy together and never talk about selling because then the stock will crash.” It’s nothing new, but it’s disgusting.

Unrealized gains are meaningless. Lock it in. Be transparent. And forget about swinging for the fences.

Want to know…

How to Maximize Profits in the Stock Market? Take Singles Over and Over Again

I posted this video in December 2017. Not only is it still relevant, but it’s also uncanny how similar the market has been the past few months. More importantly, the lessons are the same. Take notes…

Remember, hold and hope is not a strategy. And unrealized gains mean nothing in the world of penny stocks. Take singles. Take them again and again and again.

That’s how last week I hit a…

New Profit Milestone*

Remember, I trade small to teach and donate 100% of my trading profits to charity. If I focused on trading for myself, I think this would be a much bigger number.

At the same time, it shows how important it is to focus on the process. The numbers don’t matter as much as the process. Singles add up over time…

Realized gains are better than unrealized gains any day of the week. But as the market shifts, you have to be flexible. Flexibility is an asset as a trader…

How I’m Adapting to the Current Market Environment

How has adapting worked out for me so far this year? Check it out….

Q1 Recap

March was definitely different from January and February. But by paying attention to what’s working, and avoiding what isn’t working, I made $188,186 in March.*

(*Please note: My results are far from typical. Individual results will vary. Most traders lose money. I have the benefit of years of hard work, dedication, and experience. Trading is inherently risky. Do your due diligence and never risk more than you can afford to lose.)

I have no idea how the next few months will go. But the year is off to a great start at $749,166 in trading profits — all donated to charity.*

Let’s review two trades…

Trade Review

This week I’ll review my biggest dollar win and biggest percent win from last week. Both setups were alerted by StocksToTrade’s Breaking News Chat.

(Quick disclaimer: I proudly helped design and develop StocksToTrade and am an investor in it.)

You have to be fast with this kind of play. Students often ask me about how to approach these plays, and my answer is always the same: practice, practice, practice. Start paper trading using StocksToTrade. Try paper trading the Breaking News Chat alerts. (Breaking News Chat is an add-on subscription.)

Then, once you feel comfortable with it, start trading small. It will take time. Stick with it.

MDM Permian, Inc. (OTCPK: MDMP)

MDMP is a former supernova and recent runner. On March 10, the stock spiked after the company released an update about a refurbished oil well. On March 31, MDMP spiked like crazy on news of a completed acquisition in the Permian Basin.

Again, this was a StocksToTrade Breaking News Chat play. (Past results are not indicative of future performance.) Here’s the intraday chart showing my buy and sell alerts…

MDMP penny stock chart
MDMP chart: March 31 intraday, STT Breaking News play — courtesy of StocksToTrade.com

At $4,288 profit, this trade was my biggest dollar win of the week.* Had I not sold too soon, it could have been double or triple that amount. It’s a good example of the upside potential of breaking news plays. Should, coulda, woulda…

Again, use StocksToTrade’s Breaking News Chat. Yes, I’m an investor in STT. Yes, I know the traders who run Breaking News Chat. They work very hard and I love them for it. And, yes, I’m biased, but…

No other service is specifically designed for curated breaking news alerts on low-priced stocks. 

3D Pioneer Systems Inc. (OTCPK: DPSM)

On March 23, 3D Pioneer Systems announced cybersecurity as its new core focus. The stock didn’t do much. On March 31 the stock spiked when the company announced a rebranding project. StocksToTrade’s Breaking News Chat team alerted it.

Here’s the DPSM intraday chart showing my buy and sell alerts…

DPSM penny stock chart
DPSM chart: March 31 intraday, STT Breaking News play — courtesy of StocksToTrade.com

I only got a partial fill on this trade as it was moving so fast. That can happen with breaking news plays. When it hit my goals but couldn’t keep going, I got out for a 38.7% gain.*

This trade is a perfect example of why unrealized gains mean nothing to me. Had I top-ticked it, this would have been a bigger win. Instead, I tried to be patient and waited for the pullback to see if it could keep going. When it didn’t, I locked in gains.

If I’d held another 11 minutes, it would have been breakeven. Add another 12 minutes, and it’s a losing trade. I’d rather take the single and move on to the next. It’s a lot less stressful for me.

Millionaire Mentor Market Wrap

That’s it for this edition of the update. Remember, unrealized gains mean nothing. NO trade is complete until you exit. No matter what the promoters say. They don’t have your best interests at heart. Their goal is to get as many people as possible to buy their promotions. That’s it.

Focus on the process. That means locking in gains and cutting losses quickly.

Are you ready to learn?

Trading Education Resources

Start where you are. I get so many people messaging me and asking which DVD, video lesson, or archived webinar to watch next. My top students watch every video lesson, every webinar, and every DVD.

You get to choose how dedicated you are. If you’re not sure, start with…

The Complete Penny Stock Course

Someone asked me this week if I still think this is a good book since it was published in 2018. Seriously? It’s the same patterns, indicators, and risk management. The stock market isn’t going anywhere. The basics remain the same. Read the book. 

Get “The Complete Penny Stock Course”

If you’d like to get the book as a BONUS, start with the…

30-Day Bootcamp

In April 2020, Matt Monaco had been a Trading Challenge student for three years. Matt wanted to compress what he’d learned in three years into a one-month guide. The 30-Day Bootcamp is the result.

Since then, Matt has gone from five to seven figures in profits.* He’s a Challenge Chat moderator, co-host of StocksToTrade’s Small Cap Rockets chat room, and co-host of the TWIST podcast.

(*These results are not typical. Individual results will vary. Most traders lose money. Traders like Matt and I have the benefit of many years of hard work and dedication. Trading is inherently risky. Always do your due diligence and never risk more than you can afford to lose. I’ve also hired Matt Monaco to help in my education business.)

Get “The Complete Penny Stock Course” and “Pennystocking Framework” as bonuses when you…

Start Your 30-Day Bootcamp Today

Pennystocking Silver

With Pennystocking Silver you get access to thousands of video lessons, daily watchlists, and the TimAlerts chat room.

Join Pennystocking Silver

If you’re ready to take it to the next level…

Trading Challenge

The Trading Challenge is my most comprehensive resource. Learn the strategies I’ve used successfully for more than two decades in penny stocks.

Get More Information and Apply for the Trading Challenge

If you understand that unrealized gains are meaningless, comment below with “I will lock it in!” Comment below, I love to hear from all my readers!

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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”