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Penny Stock Basics

Print These 36 Commandments That You Should Live By

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Written by Timothy Sykes
Updated 1/13/2023 9 min read

This coming weekend I’ll have some awesome new stock market rules from my newest millionaire trading challenge student, Mark Croock, who just passed $1 million** a few days ago, see all his trades here (unlike the many fakers who pretend to be rich by posting a few screenshots, we like to prove how we’re real by showing EVERYTHING publicly and I encourage you to FORCE others to do the same…and if they make any excuses just realize they’re full of it just like too many people in this industry are!)

I’d appreciate you congratulating him on social media and in chat since Mark works so hard mentoring other Trading Challenge students too! This was a few months back when we celebrated his 36th birthday with courtside seats at the Spurs/Warriors game and we also had dinner with the greatest Spur of all-time, David Robinson, as Mark is a diehard Spurs fan, so check it out:

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Sitting #courtside at the #warriors #spurs game last night was great, but what made me happiest was being able to treat one of my top students @mcroock36 for an early birthday gift as the Spurs are his favorite team and we are celebrating him surpassing $700,000 in #stockmarket profits** and now he also helps me mentor other Challenge students who want to learn the #stocktrading game as we are both so grateful for what #daytrading has done for us, but I want you to only like this video and leave a comment and message me if you will be a dedicated student as most traders lose due to a lack of preparation. Mark has worked his butt off studying for years with me and only now has he reached #financialfreedom and the #dreamlife so understand that it takes time. Also, see my Instagram story for more videos from our awesome #nba #thegoodlife #proudteacher #workhardplayhard #nbabasketball #goldenstatewarriors #sanantoniospurs #basketball #twojewcrew #jewswithcourtsideviews

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Recently, I also asked Mark for his 36 best trading rules, so here they are along with some added notes by me.  Memorize them, as Mark has now made $1 million in just a few years**and he was Student Of The Year in 2016 as you might’ve seen here:

Mark has been getting better and better at trading and become one of my top millionaire trading challenge students lately as he’s been averaging roughly $50,000/month** from trading penny stocksas you can see here, so I would pay attention to these rules if I were you.

1. Learn from a mentor with a proven track record like Timothy Sykes. (join the Trading Challenge, since there are several successful traders there now mentoring students with exclusive video lessons, alerts, and weekly live webinars too)

2. Stay humble – never get overconfident especially after a winning trade (or else the market will humble you next!)

3. Don’t be greedy – take the meat of the move and book profits (don’t try to catch the exact bottom and top, the “meat” of the move is more than enough to make you wealthy over time)

4. Plan out every trade using risk/reward (use this planning guide on every trade)

5. Cut losses quickly if the stock goes against you (rule #1 from this massive trading rule list)

6. Avoid trading mid-day (between 11am-1pm est)

7. Aggressively short first red days on pumps (supernovas)

8. Always check a stock’s float before trading

9. Never short low-float (less than 5 million shares) stocks until they have gone supernova (respect day 1 moves, even day 2 sometimes too, even day 3 lately LOL)

10. Take breaks/vacations from time to time

11. Avoid over-trading/scalping when there are no great setups

12. Focus on only the 2-3 best setups each day

13. Prepare a nightly watchlist and look at big pre-market winners too (this new trading tool is crucial in helping you do all of this efficiently)

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14. Always search Twitter for individual stocks (using “$XYZ” format) to see what traders are saying (again this tool helps sort through Twitter better, see how here)

15. Learn from respected traders’ trades, but NEVER follow picks or alerts, the key is to become self-sufficient so don’t train yourself to be a follower (bad habits are hard to break later on too)

16. Never blindly follow anyone into a trade – do your homework first

17. Develop relationships with other traders in the chatroom, but don’t look to trade together, just use other traders for idea generation.

18. Focus on taking proper position size in order to calculate your risk and so that you’re comfortable on every trade, whether your position size is great or small.

19. Lend a helping hand to “newbie” traders eager to learn) the Trading Challenge chatroom has really excelled at this the past few months as I outlined here)

20. Fine-tune your trading by pinpointing your strengths/weaknesses

21. Work your ass off to become part of the 10% traders who profit

22. Only trade at reputable brokers where your money is safe (insured) (see my list of safe penny stock brokers here)

23. Shorting in the afternoon is often safer than the morning

24. Morning spikes can last longer than you might think due to short squeezes

25. Most stocks are not to be traded due to lack of edge

26. Master the “7 Step Framework” from Tim’s Pennystocking Framework DVD (here is the link, watch it and memorize it)

27. Accept that some days there are no setups to trade, you don’t need to trade every day! (In fact, roughly 80% of Mark’s profits come from 6% of his trades)**

28. Don’t get caught up in hype – 99% of penny stocks are junk! Learn to short them on the way down and don’t believe management and their BS press releases!

29. Track your trades regularly in a spreadsheet. (using this tool helps too, duh)

30. Have realistic/tangible goals to motivate you and remember that big goals can help increase your daily performance immensly, so remember to study hard and dream BIG (just don’t expect success right away as remember even this great penny stock trader who just passed $4 million in profits wasn’t consistently profitable for his first 9 months!)

31. Never give up after losses/adversity – apply those lessons for the future and for your lifetime!

32. Track your mistakes and make sure you are not repeating them

33. Avoid stocks that are not liquid and/or not volatile

34. All traders uses support/resistance levels – always look at every timeframe (intraday, daily, weekly, monthly) so you’re not “in the dark”

35. Exercise and stay healthy physically and mentally

36. Don’t burn out and feel overwhelmed at first or ever…you have your entire life to profit from the stock market, most top traders and investors are in their 40s and 50s and 60s so the sooner you start studying the quicker you can get a leg up on everyone else so you don’t have to make all this money and just spend it on new hip surgery!


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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”