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Millionaire Mentor Update: How I Got Rich Trading Volatile Stocks

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Written by Timothy Sykes
Updated 3/1/2021 12 min read

In this update, you’ll discover the power of trading volatile stocks. I’ll also share some insight into exponential growth. Together, volatile stocks and exponential growth are what made me rich.

First…

Shelter-In-Place Update

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I’m still in California, just chillin’ … and working. A lot of people are bored. That’s CRAZY. The market is going insane. There are so many plays every day. Now’s the perfect time to study. You have a great opportunity to witness volatile stocks in action.

If people studied more and were better prepared they’d see that. So right now I have two big goals while I shelter in place…

First, I’m trying to trade these plays. Like I said, there are so many plays it’s hard to keep up. Which is why it’s important you don’t feel bad if you miss any one play. Or even several plays.

Every day brings more opportunities to learn…

And that brings me to my second goal. I’m trying to get people to actually study. Which is why I put together my no-cost “Volatility Survival Guide.”

I urge you — if you’ve been thinking about trading stocks — to get your no-cost pass now.

What’s Inside the “Volatility Survival Guide?”

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Four episodes focused on how to trade volatile stocks. Plus, you’ll discover why NOW is one of the greatest times in stock market history. Even if you’re not ready to start trading, today is a perfect day to learn…

  • In episode #1 I explain why volatile stocks are key to my success.
  • In episode #2 you’ll discover three things that make stock prices go up or down … even when the economy is crazy.
  • Episode #3 is an over-the-shoulder look as I break down trades in real-time — what I picked and why. (This alone is worth several hundred dollars, but I’m giving it to you for free in the “Volatility Survival Guide.”)
  • Finally, in episode #4 you’ll meet my friend Tim Bohen, who tells you about the power of StocksToTrade.

So many students ask if StocksToTrade is worth it. Now you can see for yourself. In episode #4 Tim Bohen shows you how to scan for the most volatile stocks and weed out those that don’t matter.

This is your chance to see StocksToTrade in action with the platform’s lead trainer, Tim Bohen.

Get Free Access to the “Volatility Survival Guide” Here

Plus, as a thank you and so you can start paper trading right away…

Get a Special Deal on StocksToTrade Here

All I can do is create as much solid content as possible. It’s up to you to study. I made this guide free so people would have an idea of how many plays there are and what tools to use.

Study up and prepare!

Now, let’s get to volatile stocks and trading questions from students…

How I Got Rich Trading Volatile Stocks*

Are you ready? Here’s the secret…

Volatile Stock Trading Tip #1: Small Gains Add Up

One trade at a time. 

Most of my trades are small gains. My average profit is $1,754.* But you gotta remember I’ve been doing this for 20 years. In my early years, I traded much bigger position sizes. These days most of my gains are smaller.

Another thing people want to know is how I find volatile stocks before they spike. I don’t care about them before they spike. The whole key is waiting for them and recognizing which spikes have legs.

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Remember, my goal on most trades is to make 10%–30%. If a position is going against me, I follow rule #1 and cut losses quickly.

(*Please note: my results are not typical. I’ve spent years developing exceptional trading skills and knowledge. Always remember trading is risky. Never risk more than you can afford.)

Volatile Stock Trading Tip #2: Clean Charts Are Better Than Choppy Charts

I prefer clean charts even though they’re not quite as volatile. So I’m not trading any stock randomly spiking. If it’s too choppy, I tend to stay away. Volatile … yes. Random stocks … no.

Look for big percent gainers with volume and a news catalyst.

Volatile Stock Trading Tip #3: Focus on Clear Patterns

Sometimes I take trades where I only make one to two cents a share. People ask, “Why do you care about making a penny or two on a stock? Isn’t that scalping?”

For me, if it’s a pattern I know well, a stock I know well, and it’s a lower-risk setup, I don’t mind taking small profits. Keep in mind, I’m NOT saying scalp some random big company.

So focus on a clear pattern even if it’s not gonna add up to huge money. See the trading lesson of the week below for more about how I got rich trading volatile stocks…

Trading Questions from Students

“Is the adaptation of your OTC first green day pattern — selling into the close — a new pattern? Or is it just a conservative adaptation?”

No, it’s not a new pattern. It’s a conservative mutation on the first green day. This is important — because I’ve seen and traded the same patterns for 20 years now…

It’s the same exact setup. What’s the setup? A big percent gain, with volume, with a news catalyst leading to an OTC first green day.

Recently it’s been better to buy around 2:30 or 3 p.m. Eastern and sell any time between 3:30 or 4 p.m. Eastern.

In the past, I’ve held this setup overnight. Recently you don’t have to hold — it’s an intraday pattern. I know some people prefer overnight. Maybe it’s because they’re under the PDT rule. My answer to that is … who cares what you prefer?

Do whatever works best for your strategy. Volatile stocks made me rich, but I’ve adapted over the years.* It’s not an exact science.

One more thing…

Just because there’s a first green day adaptation working right now does NOT mean I always sell into the close.

For example, I held a first green day play — Kronos Advanced Technologies Inc. (OTCPK: KNOS) — over the weekend. It finished strong on April 17, and it’s a former runner. So I took a small dollar position size. I wanted a press release and a gap up or morning spike to sell into. I didn’t get it. So I sold for a $140 profit — basically a scratch.

Next question…

“In a recent watchlist, you mentioned too many plays to track in an organized manner. Some traders use 20 screens and track a bunch of stocks. Are penny stocks too volatile to track that way?”

In a perfect world, you could probably have two or three screens. But 20 screens … or even seven screens … that’s overkill.

Maybe if you have a big account and you’re taking 14 longs and seven shorts as a hedge…

… but for penny stock trading you should have one or two plays at any time. Focus on only the best plays. 

What are the best plays? Volatile stocks. That’s key. I say it over and over again … start with the biggest percent gainers. Every. Single. Day. It’s really as simple as that.

(Notice I didn’t say trading volatile stocks is easy … it’s not. Even if it was easy, my lawyer wouldn’t let me say so. But it’s not. And my lawyer is NOT attempting to suck the life out of me. Honestly, I’m grateful for my lawyers.)

Back to all those extra screens…

The extra screens just allow you to watch more charts, more often. More potential setups. But it doesn’t mean you should be trading more. They’re helpful for spotting more…

But remember, volatile stocks can move fast. That’s the beauty and the obstacle. You can’t watch and trade a bunch of volatile stocks all at once. Focus on only the best setups.

Let’s finish up with the…

Trading Lesson of the Week

With volatile stocks, you have to be willing to take small gains. Small gains really do add up. This is how you can grow your small account. I didn’t get rich starting with a big account. Not ONE of my top students got rich starting with a big account.*

[*Note that these results aren’t typical. My students and I put in the time and dedication and have exceptional skills and knowledge. Most traders lose money. Always remember trading is risky … never risk more than you can afford.]

But remember this…

Because a lot of people are almost getting it … They’re saying, “OK, small gains add up.” I’m thinking very small… maybe $50 or $100 at a time. But that’s gonna take a while, right?

So here’s the key: How you make the $30, $50, or $70 matters. Because later — to achieve exponential growth — you’ll have to scale up.

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So when you take those small gains, are you doing it on volatile stocks where you have a small position size?

Let’s look at an example…

Volatile Stocks and the Science of Exponential Growth

Let’s say you make $100 profit on a 1,000-share position. Later you can take the same exact trade but with a bigger position size.

Let’s say you take 10,000 shares — then you’d make $1,000 on the same trade. Or 100,000 shares, you’d make $10,000…

The key is … it’s very important you’re trading volatile stocks. Then it’s a matter of working on the process and learning the rules.

If you’re serious about gaining freedom through trading, watch the 11-minute video below. It’s one of the most important lessons I’ve ever shared. Watch it twice. Take notes.

Exponential Growth Curve: The True Story Behind Stock Spikes

Now that you’ve watched the video, be sure to get access to the “Volatility Survival Guide.”

Why My Strategies Don’t Work for High-Priced Stocks

So some people get the idea of small gains, but they try to apply it to big companies. “Take small gains … OK … I’ll just trade Amazon and take a small gain.” 

NO.

With small gains on volatile stocks, you use the same process and increase position size. So you need to trade low-priced volatile stocks. That’s the key. If you make $100 profit on a $1 stock, you can size up later. If you make $100 on a $1,000 stock … sorry, you can’t even buy another share.

Millionaire Mentor Market Wrap

Do you get how important it is to trade volatile stocks? If you want exponential growth …  and you want to do it in a reasonable amount of time … then focus on volatile stocks.

What’s the catch?

You need a mentor. Like I said before, this is simple but not easy. There’s a lot to learn — especially at first.

You have to learn the patterns, the rules, and how to manage risk. You have to learn how to find only the best volatile stocks and best patterns. You have to know the difference between choppy price action and clean price action.

All that takes time, and you have to study. My goal is to be the mentor to you that I never had. I want to help you cut the learning curve into manageable chunks.

If you’re ready to take me up … apply for my Trading Challenge today.

What do you think of volatile stocks? Comment below, I love to hear from all my readers!


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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”