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Trading Psychology

The Hardest Thing To Do As A Trader

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Written by Timothy Sykes
Updated 9/9/2022 6 min read

Most people get into trading because they believe it offers them a chance at financial freedom.

For some, financial freedom means spending more time with the family, providing for them, and showing them a good life.

For others, it means having nice cars and homes, going on vacations, and dining at fancy restaurants.

Whatever your goal is, I commend you for striving to do better.

Some people never have the guts to try and remain stuck complaining about their circumstances.

And while I’ve taught a framework that has helped dozens of people become millionaires…

I can tell you this…

Achieving greatness in the stock market isn’t about:

  • Knowing the right strategies
  • Having the best tools
  • Joining a strong network

While all those are important, there’s something else that trumps it.

It’s the main reason why some traders go on to become millionaires, and others end up quitting before they reach their potential.

The Right Framework Isn’t Enough

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Two of my top students have achieved 8-figures in trading profits. I don’t know anyone else who mentors that has produced more millionaires than me.

If that isn’t proof that my framework works, I don’t know what is…

But why do some go on to achieve extraordinary results while others fail?

After all, I’ve been teaching the same strategies and techniques for years.

It boils down to one thing: Discipline. 

Learning the strategies is easy…it just requires you to invest time.

However, most folks want instant results, which forces them to make poor decisions that eventually take them out of the game.

It’s why they:

  • Force bad trade setups
  • Hesitate on good entries
  • Chase stocks due to FOMO
  • Don’t trade with a plan
  • Talk themselves into bad trades and out of good ones

So how do you overcome this and become a disciplined trader?

Become A Specialist

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There are dozens of ways to make money in the stock market. For example, one of my students, Mark Croock, makes most of his money trading options. While Matt Monaco, a 24 year-old millionaire student of mine, has found great success trading cryptos.

However, I’ve found that trading OTC stocks have led me to my best results.

The first thing you must do is figure out what will work for you. And that takes some time.

But once you have, then it’s all about becoming a specialist.

So many newbie traders get shiny object syndrome, going from one strategy to another, and never mastering any.

You don’t see NFL running backs trying to switch their positions to defensive ends or cornerbacks. It just doesn’t happen.

More Breaking News

Find the position you want to play, and try to be the best.

Discipline Is Easier When You’re A Specialist

Trying to be a jack of all trades in the stock market is dumb.

Why?

Because you’re competing with specialists.

I’ve had success trading penny stocks because I’ve dedicated hours to mastering them. Throw me into the world of options, and suddenly, I’m below average.

I know where my lane is, and I stay in it.

Master Your Playbook

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Because I focus on OTC penny stocks, I can work and develop strategies that make me better in this area of trading.

Trading is simple for me. Because at this stage of my career, I’ve mastered a handful of setups that I know consistently make me money over time.

If you know what makes you money consistently…would you go to those strategies over and over again…or would you rather try something you’re not good at and try your luck?

I can stay disciplined because I’ve defined the type of stocks I like to trade and the setups I want to play them with.

Everyday Is Different

Some trading days are filled with non-stop action…while others are a complete snooze fest. Turning on your trading platform doesn’t mean you have to trade.

Once you know what to look for, sitting on your hands becomes easier. If the action I look for isn’t there…I don’t look to find something else to trade.

You don’t get rewarded for your activity. Trading is about maximizing your opportunities. That’s why some traders can make a good living by nailing one or two good trades each month and preserving capital the rest of the time.

Review Your Best Setups

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It’s always good to review your best trades and setups. Not only does this give you confidence, but it also reinforces your strengths.

That’s why you should always dedicate some time after each trading day to review. This practice will help you avoid “style drifting” and force you to be more disciplined.

Bottom Line

What separates success from failure in trading isn’t a strategy, the size of your trading account, or having a magic indicator.

It boils down to discipline.

The best way I’ve discovered to stay disciplined is by becoming a specialist and mastering that domain.

If you’d like to learn about the framework I’ve developed to help ordinary folks become millionaires, then CLICK HERE.


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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”