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Is This The Best Strategy For Impatient Traders?

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Written by Timothy Sykes
Updated 8/3/2023 5 min read
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Most traders on social media like to portray themselves as perfect…

Every buy is made at the low…and exited at the highs.

They’ll even doctor up images to show you how amazing their execution was.

They’ll even attack me, and call me a piker.

Last I’ve checked, I’ve made over $7.4 million in trading profits. And I have over 30 students who have become millionaires after taking my program.

But despite all my success…I know I’m far from being perfect.

In fact, one of my biggest struggles, even after 20 plus years of trading, is patience.

I tend to get out of winning trades way too early…

The other day I caught IDAI, getting in at $1.74 and out at $1.86…meanwhile the stock went to $2.90…grrrr.

I’m super impatient and it’s something I’m still working on to improve.

But you know what?

I just had one of my most patient trades in a LONG TIME.

It’s all about the strategy and the setup.

If you’re struggling with sticking with your trades then you’re going to want to listen up because this could be a game changer for you.

Another Way To Trade Catalysts

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I often say that 8 out of 10 stocks will follow the overall market.

However, I’m not really interested in those types of stocks.

You see, as a short term trader I need volatility.

Volatility is what allows me to enter and exit trades quickly.

And in order to get that volatility you typically need a catalyst.

That’s why I love StocksToTrade Breaking News. It delivers market moving news faster than any other service I know.

But the trade I’m about to tell you about didn’t require rapid action.

In fact, this is a trade I had to sit on for a few days…something that’s not easy for me at all.

Let me tell you about the play and why it worked so well.

The Catalyst Runup in Fisker (NYSE: FSR)

Fisker Inc. has been pumping up their Product Vision Day…

I felt this was a good opportunity to ride the hype up.

So I bought shares on Friday, at $5.83…

Usually for my weekend trades I will look to get out on Monday.

But I knew that I could stay in the trade longer if it didn’t experience a large sell-off because the event was still a few days away.

And that’s exactly what I did…

I stayed in till Tuesday, getting out at $6.17…which was good for a 5.8% gain.

Now you might be thinking, that’s cool Tim, but didn’t the stock go up to $6.76 on Thursday…

It did…

But in terms of managing risk, I feel like it’s always better to ride the hype up and sell into the momentum.

I tried my best to hold on longer than I typically do, so I’m happy with myself with how I handled it.

Plus it looked like it was triple-topping there for a moment.

The stock did go down to about $6 on Wednesday when the market sold off, so getting out on Tuesday wasn’t the worst exit.

Nonetheless, this is a strategy worth exploring more.

Several companies will announce product reveals, investor days, FDA announcements, and so on…whether they will be positive or negative we don’t know.

But there’s a chance that shares will rise leading up to the event if the company does a good enough job of hyping it up.

And although Fisker delivered yesterday, they easily could have disappointed… and the stock could have tanked.

More Breaking News

That’s why I say to play the hype…and sell the momentum.

Taking The Next Step

position trading the bottom line
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I used my weekend strategy to find this play in FSR.

If you would like to learn more about how it works, and how it’s responsible for some of my most memorable wins then CLICK HERE TO WATCH THIS. 

It’s pretty amazing if I do say so myself.

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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”