timothy sykes logo

Case Studies-Timothy Sykes Training Program

Case Study: How Paper Trading and Thinking Small Made Dan Millions in Trading Profits {Infographic}

Timothy SykesAvatar
Written by Timothy Sykes
Updated 4/14/2022 4 min read

Dan first discovered me in 2013 while browsing YouTube. At the time, he was focused on playing poker. It wasn’t until 2016 that he circled back to me and started trading with a $30,000 account — and proceeded to lose for the next several months. It led him to make an extreme but game-changing move: he dropped out of college to become a full-time paper trader.

After eight months of paper trading, he started again with a $10,000 cash account. He played poker on the side to earn more trading money. His time practicing paid off — here’s how his journey played out…

Quote

“Starting big doesn’t work. You need to start small with the focus being on learning rather than making profit. Experience leads to bigger and better future opportunities.”

Background

My student Dan started trading with $30,000 so he could be over the PDT. But things quickly spiraled out of control, and he lost $12K in about three months. Luckily, he took it as a wake-up call to invest in his education. Here’s how he went from bleeding his account to $1.9 million in trading profits…

Timeline

2013

Post image

Get my weekly watchlist, free

Sign up to jump start your trading education!

First discovers me on YouTube.

2016

Sets up his first $30K trading account and quickly loses $12K. Continues to lose until March 2017.

More Breaking News

March 2017 to October 2017

Paper trades full-time.

October 2017

Begins trading again with a $10K account.

2018

Begins to hit his stride and has several memorable trades, including a $607 profit on Onconova Therapeutics Inc. (NASDAQ: ONTX). It’s still his Twitter banner because of what it represents (small positions with great risk/reward and locking in profits).

April 2021

Passes $1 million in trading profits.

September 2021 to March 2022

Goes from exponential profits to break-even trading in a turbulent market.

April 2022

As market momentum surges, so do his profits. Currently up over $1.9 million in trading profits.

Strategy

Dan likes to go long on bullish structures that he finds predictable. Typically, he looks for stocks that have a history of being explosive. He tries to time his entries with what he has determined is his best risk/reward.

But even with a clear-cut strategy, he understands the importance of adapting. He flows with whichever sector is working best, and he’s constantly making adjustments to his strategy as needed.

Stats

  • Currently over $1.9 million in trading profits
  • Average 2.84% percent gain per trade
  • Average $1011 gain per trade
  • Passed $1 million in April 2021
  • Currently up over $1.9 million

Trading Superpowers

  • Using the ‘poker mindset’ to trade smarter
  • Paper trading his way to smarter live trading
  • Devoting 12,500 hours into his career so far

See Dan’s Chart and Resouces

Take Your Education Further!

How does Dan’s story inspire you? Do you understand why he scaled back and became a full-time paper trader for months? Let me know in the comments!


How much has this post helped you?



Leave a reply

* 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”