timothy sykes logo

Trading Psychology

Which Path Will You Decide? Your Trading Destiny Hangs in the Balance.

Timothy SykesAvatar
Written by Timothy Sykes
Updated 6/9/2023 6 min read

Two paths lie before you in the world of trading.

Most will choose the first path—the path of the victim.

They settle for mediocrity, making endless excuses for their lack of success. Time, money, intellect—every obstacle becomes a reason to give up.

But let me tell you something: there’s a better way.

It’s the path of responsibility.

It’s about owning your mistakes and committing to doing whatever it takes to improve.

This shift in mindset can change everything.

Let me share a recent experience to illustrate the power of this mindset. I entered a trade on MGOL on Wednesday… and ended up losing a small amount.

Shortly after, the stock skyrocketed, doubling from my initial entry.

It could have crushed me, leading to impulsive, revenge-driven trades.

But I refused to let those negative and destructive emotions control me.

Instead, I stayed calm and focused and learned from the situation.

The very next day, I took another shot and nailed the trade. That’s the difference a dramatic shift in mindset can make.

And I’ll show you how I stop myself from getting self-destructive, where I’m finding opportunities in this market, and the mindset you need to thrive in any market.

 

This Would Have Triggered Most Traders

tim sykes team closing the nasdaq bell
© Millionaire Media, LLC

The world’s greatest soccer player, Lionel Messi, is coming to Miami and joining the MLS.

When I heard the news on Wednesday, I was super excited…as I’m a big fan of the Argentine soccer legend.

This is easily the biggest signing the MLS has ever seen.

It will have a huge positive impact on the MLS, Apple TV, Adidas, and the city of Miami, not to mention all the other sponsors and businesses involved.

Believe it or not…

There was actually a way to play this via the stock market.

And that was with the ticker symbol MGOL.

The company is MGO Global, offering a clothing line under the Messi Name.

If you go onto the company website, you’ll see Messi front and center.

Source: MGO Global

I jumped into MGCO in the afternoon on Wednesday at around $1.70.

I got in with a relatively small size, about 3,000 shares.

However, the stock didn’t do much, and when it got to $1.62 I bailed.

I ended up taking a small loss…

Not long after…the stock ripped higher…hitting a high of $2.82.

A few weeks ago, I would have flipped out if this happened.

I’d be boiling trying to find another trade and make up the money I would have made in MGOL.

Of course, that type of thinking can only lead to bigger problems.

Looking back on the trade, I should have played it sooner or waited for a bigger panic dip buy opportunity.

It’s always tricky to place trades late in the morning/early afternoon.

The Mindset That’s Made Me Millions

© Millionaire Media, LLC

Forget about what the talking heads are saying on TV.

We are in a bull market. 

And in a bull market, there’s one thing you need to be aware of: you’ll have plenty of chances.

So despite fumbling MOGL, I knew I might get another chance down the road.

In fact, I thought if I could get an early panic dip buy on Thursday, I would have a better shot at nailing the trade.

And that’s exactly what happened on Thursday:

Source: Profit.ly

It turned out to be a classic panic dip buy opportunity.

Running It Back

© Millionaire Media, LLC

If you want to succeed as a trader, you must approach your trading with the right mindset. A loss is only if you don’t learn anything from it.

We are now in a market with multiple opportunities to make money. 

If you get caught up in the last trade, you might miss what’s next.

That’s why you should try to learn from your mistakes. And try to figure out what you need to fix to improve your results.

I’ve developed a process for becoming a better trader…several of my students have gone through this process…and more than 30 have gone on to become millionaire traders.

If you’d like to learn more about it…THEN HERE YOU GO. 

Post image

Get my weekly watchlist, free

Sign up to jump start your trading education!


How much has this post helped you?


Leave a reply


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

Post image

Get my weekly watchlist, free

Sign up to jump start your trading education!

* 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”