There’s a lot more to trading than winning and losing. There are bad wins and good losses. But the only way to know the difference is through experience and preparation. And THAT means knowing when to optimize your process.
Last week OTCs heated up again. But it was a week where I took a lot of small singles. That said, I’ll never complain about making $7,230 in a week.* Especially since I donate 100% of my trading profits to charity.**
More important than the money, there are two very important lessons…
First, small gains add up. A lot of new traders see screenshots on social media and think trading is about how much you can make from one trade. It’s not. Consistency and risk management are MUCH more important than big wins.
Second, protecting gains is ALWAYS better than holding and hoping. Last week I sold into weak bounces, weak follow-up spikes, and weak breakouts. Over and over again I took small gains when a stock didn’t do what I thought it would do. I’m OK with that because I’ve learned when to optimize. And that helps me maximize the lessons from every trade.
Keep reading for more about the best time to optimize your process. First, check out the power of science…
Table of Contents
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Let’s talk trading…
When to Optimize Your Process
These days I spend more time on charity work when the market is closed. But for years, I studied and prepared. And to this day, I make watchlists, scan news, write blog posts, make video lessons, and review my trades.
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All those things are an extension of the time put into studying early in my career.
The most $ you'll ever make from trading and investing comes from how much studying and prep work you do when the markets are closed. Focus on studying the past while reviewing ALL your trades — that's how you learn how to optimize your process & maximize your success over time!
— Timothy Sykes (@timothysykes) June 10, 2021
The reason I often say preparation is key is because … IT IS. Nothing has changed fundamentally from my early days as a trader. Yes, we have better tools like StocksToTrade.***
And there are a LOT more traders thanks to the internet and all the trading platforms.
But the reasons why stocks spike (and crash) haven’t changed much. The same patterns keep playing out again and again.
I’ve always looked forward to the market opening on Monday mornings. With rare exceptions, I’m ready and waiting when the market opens every day.
But it’s preparation when the market isn’t open that makes the open market profitable. Yes, you need screen time. But you also need to know what you’re watching. So use the time when the market isn’t open to optimize your process. Come to the market ready every day.
Trading Mentor: Questions From Students
This week’s questions are from a recent Trading Challenge Q&A webinar. Keep reading for more about how to get your questions answered live, starting next week…
“What news is a good catalyst these days for small caps?”
This is like asking what I think the market will do. Or what will happen with an individual stock. You need to stop trying to predict.
What kind of news catalyst is good? Let the market decide. Look at the news of all the biggest percent gainers. What did the market decide is the best news?
The market has all the data you need. You just have to look. The fact that you’re asking this question shows you’re looking at this the wrong way. You need to dig for information and find this stuff out yourself.
Who cares what I think? What if I say some news is good? My opinion is worth nothing. Nothing.
Listen to what the market says about the news that matters. If three of the top five percent winners are crypto stocks with crypto news, then crypto news matters. Why? Because the market says so. It doesn’t matter what I say.
The market doesn’t care what you want or what I think. Learn to react.
You want simple answers, but that won’t make you a great trader. All my top students have the right mindset. They’re thinking the right way. They’re learning the right way and putting lessons into practice.
Do you really want this? Then be a good student. Study like you’ve never studied before.
Next question…
More Breaking News
- Is Recursion Pharmaceuticals Resilient Enough for a Jump?
- Globalstar Inc. Stocks Surge: Is This the Right Time to Invest?
- Celularity Inc.: Surging Sales Forecast Ignites Stock Rally – What’s Next?
“Can you recognize a pump-and-dump by looking at the daily chart?”
First, pump-and-dumps are illegal. So theoretically, they shouldn’t be happening.
Second, you could call a lot of penny stocks a pump-and-dump by looking at the chart. But a pump requires promoters. So if you want to know if something is a pump, look for promoters.
How do you know if there’s a promotion? Use StocksToTrade Breaking News.*** They alert promotions in the chat room. They even tell you whether it’s a Twitter pump, a chat pump, or something else.
This leads to the final question for this edition…
“I see OTCs pop in minutes on breaking news and tweets. Would you say the update in technology has closed the ‘informational inefficiency’ gap?”
Not at all. Sometimes breaking news plays spike in a few seconds or a few minutes. But often the biggest gains happen overnight and on day two — after the news. So informational inefficiency still exists.
How you play it is another thing altogether. I often underestimate how far a stock can run. But I trade small to teach. And I’m impatient. I’d rather lock in a single than try to predict how far a stock will go.
Let’s look at a trade…
Trade Review
This trade goes well with the questions from students. Again, let the market decide what news is important. Sometimes it’s not a traditional news catalyst that spikes a stock. Your goal is to learn to react.
Southcorp Capital, Inc. (OTCPK: STHC)
Southcorp Capital currently has the Dark or Defunct designation on OTC Markets. However, in August 2020, the company announced a change of control…
The new CEO said, “The focus and strategy going forward in the coming months will be to bring the status of the company current with OTC Markets, and to complete a reverse takeover (RTO) with AMECA Mining. We have many exciting announcements to make once we complete the transaction with AMECA.”
Since then, the stock has spiked more than once with social media hype and promotion. Here’s the STHC one-year chart…
On June 8, STHC had another big spike with more Twitter hype about the upcoming merger. Here’s the intraday chart with my trade alerts…
This was a speculative trade based on momentum and Twitter hype. My goal was really just to see how far it could go. I didn’t plan to hold it overnight. Anything between 10%–30% on this trade would’ve met my goals.
It turned out to be a 16.67% win for $1,133 in profits.* It wasn’t my biggest win of the week — either as a percentage or in dollars. But it was a solid trade based on what the stock was actually doing.
You can find dozens of “know what you own” tweets with all sorts of due-diligence links about this stock. Are they accurate? I don’t know. Frankly, I don’t care. Most penny stock companies fail.
New to penny stocks? Start with my FREE penny stock guide.
Don’t get me wrong, I don’t want them to fail. But I always expect the worst. And I’m happy to lock in singles along the way. Trading conservatively has kept me in the game for two decades…
Millionaire Mentor Market Wrap
That’s another update in the books. Remember, most traders, 90% or more, lose money. Why? Because they fail to prepare.
So if you want to be different, learn to maximize the hours when the market is closed. That’s when to optimize your process. It means studying on weekends and evenings. And it might mean getting up early to put in the time before you go to work.
Whatever it takes, use market downtime to grow your knowledge account and optimize. Most people won’t. Will you?
If you’re serious about trading, join me next week for…
Trading Mastery LIVE
Next week, on June 29, I’m doing another Trading Mastery LIVE all-day trade-a-thon. If you want to join me for an entire day of live trading, this is your opportunity.
Live trading days have two powerful benefits…
First, you get to ask questions and get them answered in a live Q&A webinar format during market hours. With one exception … I don’t answer questions while I’m in a trade or right at the market open.
But that’s where the second benefit happens…
It’s like looking over my shoulder while I trade. I’ll let you know what I’m watching and why. And if I take a trade, I’ll talk you through it. (Keep in mind I NEVER force trades for the sake of live trading webinars. Not only is that risky, but it also teaches the wrong lessons.)
But it gets better…
When you register for Trading Mastery, you’ll get 12 LIVE all-day trading sessions over the next 12 months. (Occasionally we skip a calendar month due to my travel schedule, but we always make it up. So rest assured you’ll get all 12 sessions.)
Watch this video to get a sneak-peak inside a live trading session. This one is a little different, but it gives a good idea why live sessions are SO powerful…
Live Trading Session in Dubai With 3 Top Students
Join Trading Mastery NOW to get access to my upcoming all-day trade-a-thon. PLUS, get access to a NEW live-trade day each month for the next 12 months.
Trading Challenge
If you’re a Trading Challenge student you already get access to the Trading Mastery sessions. But you get so much more…
Live webinars every week. You get two to four webinars every week with me and the Trading Challenge mentors.
Video lessons. There’s a library of video lessons waiting for you to watch, take notes, and learn. And not just a few … thousands. New video lessons get posted every week depending on my trades and any big lessons the market is giving.
Archived webinars. That’s right, you get access to EVERY past Trading Challenge webinar. Hint: my top students all watched the archived webinars. Some of them watched them multiple times.
DVD guides. The DVDs include everything you need to build your trading foundation.
Do you have what it takes? Apply for the Trading Challenge today.
How do YOU optimize your process when the market isn’t open? Comment below, I love to hear from ALL my readers!
Disclaimer
*Tim’s trading results are not typical and do not reflect the experience of the majority of individuals in the Trading Challenge. From January 1, 2020, to December 31, 2020, typical users of the products and services offered by this website reported earning, on average, an estimated $49.91 in profit.
**While Tim Sykes has enjoyed remarkable success trading stocks over the years, his primary income derives from the sale of financial education products and subscription services offered by various businesses and websites in which he has an ownership stake.
***Tim Sykes is a minority stakeholder in StocksToTrade.com. StocksToTrade Breaking News chat is an add-on subscription to the platform.
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