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Trading Lessons

4 Surefire Ways To Lose Money Trading 📉

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Written by Timothy Sykes
Updated 10/12/2023 7 min read

Despite all the turmoil in the Middle East and fears of inflation– there have been several small-cap breakouts this week.

Two that stand out were TPST on Wednesday, going from $0.90 to a high of $11.50. And OPGN yesterday, moving from $0.34 to a high of $4.34.

However, most traders miss these types of opportunities and often find themselves on the wrong side of the trade.


It has to do with these four issues.

Luckily, they’re easy to fix.

#1 Putting Profits Ahead of Risk Management

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Look around social media, and you’ll find a lot of “traders” posting their wins.

However, you’ll rarely see them post their losses.

This is especially true for a lot of short sellers.

Who cares how much money you make if you lose more…right?

At the end of the day, it’s not how much you make. It’s how much you keep that matters.

Your first few years of trading will be a struggle.

It’s only natural because there’s a big learning curve.

The name of the game in those first years isn’t making money…it’s survival.

And the only way you can survive is by keeping your losses small.

My number one rule, and probably the only reason I’m still consistently profitable, is that I cut losses quickly.

If you want long-term success, you must consider risk management first.

#2 Being Stubborn

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Look around…

We’re seeing one short squeeze after another.

Yet there are so many crowded short sellers.

When will they learn?

I used to be a short seller, and I made a lot of money doing it.

But as market dynamics changed, so did my trading strategies.

I realized that the risk vs. reward didn’t make sense as a short seller, so I focused mainly on taking longs.

This year has been tough for many traders, including myself.

And because of that, I’ve been experimenting more than in years past.

Trading is always about adapting; if you’re not finding success, you must be open-minded to trying new things.

Don’t let your ego get in the way of your future success.

#3 Betting Too Big

tim sykes in a cave in sedona arizona
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Everyone is in a rush to make money these days.

It’s why most of them fail.

You can’t force it in trading.

Believe me, I wish I were up more this year, but I’m not.

Trying to put bigger positions to squeeze out higher profits can be a recipe for disaster.

So many traders expect the market to return to 2020/2021. But that’s not happening.

You’ve got to learn to size accordingly.

Don’t let one trade ruin you.

I prefer steady, small wins over the rollercoaster ride I see many traders on.


#4 Failure To Prepare

timothy sykes in matera in 2022
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I typically go into each trading day with a trading plan and a list of stocks I’m watching.

Prior to that, I’ve reviewed my trades and analyzed what I did right and wrong.

I’m constantly trying to find new patterns and trends.

Asking myself, what’s working…what isn’t.

Not only does this keep me sharp…but it prepares me for what’s in store.

Are you prepared?

Or are you going into the day hoping and praying you’ll make money?

Do you have a strategy?

Do you have a trading plan?

If you answered no, then you’re in trouble.

Instead of being in a rush to trade, be in a rush to study and improve.


📉 Sick of Missing Out on Huge Market Moves? 📉

Many traders fall for the same pitfalls in a turbulent trading world where the unexpected happens daily.

From failing to prioritize risk management to neglecting preparation, these mistakes can cost dearly.


🔥 Caught up in the thrill of chasing profits, only to end up with hefty losses?

🔥 Sticking stubbornly to outdated strategies, even as the market shifts?

🔥 Betting too big, too soon, and burning out before the real gains appear?

🔥 Heading into trades with no plan, just blind hope?


If these resonate with you, you’re not alone. But it doesn’t have to be this way.


🚀 Join me in our special live training sessions and let’s tackle these issues head-on.

🚀 Uncover strategies that prioritize long-term success and consistent profits.

🚀 Experience real-time analysis, spotlighting the common traps and how to avoid them.

🚀 Learn not just to trade but to thrive by understanding the core principles of successful trading.


Ready to turn your trading around?

Eager to capitalize on opportunities while keeping losses in check? The roadmap to resilient and profitable trading is just one click away.


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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”