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Trading Lessons

5 Ways To Wreck Your Trading Day

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Written by Timothy Sykes
Updated 10/18/2023 9 min read

This week started with a ton of actionable plays.

Symbols like TPST, MNTS, and NKTX all had monster moves.

But despite that, I’m seeing many traders shoot themselves in the foot.

Sure, most of them lose money, and it’s easy to fall into the pitfalls.

But what if you could sidestep the typical clumsy mistakes and steer clear of them?

Not only have I made over $7.5 million in trading profits, but I’ve also mentored over 30 millionaire students.

There are five mistakes I see traders making in this market that are robbing them of potential gains.

I’ll tell you what they are and how to avoid them.

#1 Getting Too Cocky

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Think of trading like driving a car.

Just because you’ve had a few days or even years without accidents doesn’t mean you can start speeding and ignoring traffic lights.

Overconfidence in trading can quickly lead to reckless decisions, just as overconfidence on the road can lead to accidents.

You have to learn to approach every day like a new opportunity.

It also presents new challenges.

The best way to avoid cockiness is to objectively analyze your strengths and weaknesses.

Remind yourself of what you do well and what makes you money.

In addition, you want to review your mistakes. When you lost money, what was it that you did wrong?

Do you have a tendency to double down on losing positions?

Do you struggle when you size up?

Do you trade a specific setup better than others?

The market can and will humble you if you’re not on your A game.

#2 Forcing Trades

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Trading is one of the few professions where you can “work” all day and have nothing to show for it.

But sometimes, doing nothing is actually the best thing you can do.

Why?

Because not every day is a good day for trading. Sometimes the market will offer you nothing.

Now, that doesn’t mean you do nothing on those days. Instead of trading, you want to spend that time studying, learning new setups, reviewing your trades, and developing your strengths.

It’s always better to wait for the right opportunities than just trading for the sake of trading.

You don’t get paid to trade…you only get paid when you win.

#3 Not Being Prepared

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It’s like baking cake without having all the ingredients ready. You’ve started mixing, only to find you’re out of sugar.

Anyone with a hi/low ticker can find the biggest movers of the day.

But you’ll need more than that to trade them successfully.

You’ll need to know why the stock is up if there’s a catalyst, and why it’s up or down on unusual volume.

In addition, you want to know its history…has it moved like this in the past?

Does it fit a current theme we’re seeing in the market?

I’m a big believer in trading price action, but I also am a big believer in being informed.

I’m not buying a stock simply because it sold off…I need more than that to pull the trigger.

#4 Trading Without An Edge

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When penny stocks aren’t moving, I don’t enter into options trading or crypto…

Why?

Because I don’t have an edge in trading those.

I trade to make money. And before you jump on me for saying that, let me remind you that I donate all my trading profits to charity.

The more I make, the more get’s donated to charity.

That’s why winning is important to me.

Moreover, I’m trading to teach my students.

If I’m all over the place, how does that help them become better?

That’s why you’ll constantly hear me talk about many of the same principles.

Consistency is key…and very few things are more important than understanding your strengths and playing towards them.

# 5 Putting Profits Ahead of Risk Management

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At the end of the day it’s not about how much money you make…it’s about how much you keep.

I’m one of the first to admit, I’m not a big trader, and I often trade like a coward.

And I sometimes get teased on social media for it.

But I don’t need to show flashy profits to validate myself.

I have over 30 millionaire students…who else teaching can say that?

The reason why I’ve made over $7.5 million in trading profits isn’t because I make big trades…it’s because I know how to protect my capital.

My number one rule in trading is to cut losses quickly…and for the most part…I’ve been pretty good at it.

On the other hand, most short sellers can’t do it.

They focus so much on being right…which they are most of the time…but less on managing risk.

For example, if a stock that’s squeezing goes from $2 to $20 in one day…and you shorted it at $4…does it really matter if it’s trading at $1 a few days later?

Most traders don’t have the capital to withstand a move like that.

And that’s why I’m constantly warning my students against short selling.

The risk vs. reward simply isn’t there anymore.

If you want longevity in this game…then you must focus on risk management first.

 

Ready to Trade Smart? Avoid the Pitfalls! 📈

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With monster moves like TPST, MNTS, and NKTX, there’s a fortune to be made… or lost.

Why do so many traders miss the mark? It’s often self-inflicted wounds. These five mistakes are costing traders their potential gains, but they don’t have to trip you up!

I’ve surpassed $7.5 million in trading profits and guided 30+ students to millionaire status.

Why?

Because we don’t just know the game; we master it. 🔥

🚀 Dive into the strategies that have bred success, not just for me but for dozens of my students.

🚀 Join me in our exclusive live training session this week.

🚀 Get firsthand insights, tailored to the current market’s wild ways.

🚀 Rise above the masses and anticipate market moves before they happen.

Are you set to navigate the choppy waters of the trading world, equipped with the insights from experienced traders?

Your map to masterful trading is just a click away.

👉 SECURE YOUR SPOT NOW!👈

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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

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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 (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”