Share Market
Trading Mindset: How to Get It Right (and the Biggest Mistakes to Avoid)
Finding success in the stock market is so much more than learning patterns. You need to have the right trading mindset.
Don’t get me wrong, patterns are essential and important. In fact, I think anyone can learn my penny stock patterns that present themselves every day in the stock market … As long as they put in the time…
You gotta practice. If you want a risk-free way to learn, you can do that on the StocksToTrade platform and paper trade. Or if you’re ready to start with real money, you can trade small.
And as you start your trading career, it’s imperative that you work to develop the right trading mindset.
Your mindset is the foundation for every trade and your entire trading career. It’s something that you have to hone and refine all the time. I know that personally from trading for 20+ years. If I don’t check my mindset, I run the risk of overtrading.
That’s exactly why I’m dedicating this post to the trading mindset. Because the wrong approach to the markets can lead to loss of confidence, chasing trades, and even blown-up accounts.
Let’s get to it!
What Is the Trading Mindset?
The trading mindset is really a set of rules for how you’ll conduct yourself as a trader and in the markets. And you can actually apply it to a lot of other aspects of life — not just trading.
During my two decades of experience in trading penny stocks, I’ve learned key facets of the trading mindset. That’s what I base my trading rules on. My top students know just how important it is to follow these rules to become self-sufficient in the markets.
So let’s break down the rules that go into the right trading mindset … and the biggest mistakes you should avoid as a trader.
Let’s start with my #1 rule…
Cut Losses Quickly
Veteran traders: when a stock breaks below a key level, exit the position safely
Pumpers: The drop is due to weak hands/short sellers, keep holding or you're my enemy, this is a longterm hold not a day trade
Veterans: cut losses quickly
Pumpers: It's not a loss until you sell!
— Timothy Sykes (@timothysykes) June 24, 2020
When it comes to trading penny stocks, this is the most important thing both new and veteran traders focus on.
My newest six-figure students like Matthew Monaco, Jack Kellogg, and Kyle Williams swear by this rule.* It’s a big part of what’s helped them to grow their accounts. It’s not just how you win — it’s also how you manage your losses.
You have to cut losses quickly because penny stocks are volatile. They can make rapid gains and lose them just as fast. Too many newbie traders think these crap penny stocks will be the next Amazon or Netflix. But that’s just not the case.
A lot of these companies dilute their stock to raise money for execs and insiders. That’s what we call toxic financing. It’s a big reason you don’t hold a penny stock position and hope for the best.
Learn the patterns and how to trade them. When a trade doesn’t go as you expect, get out.
When I trade, I keep my losses small and let my winners run — even if it’s only 20%–30%. Which brings me to my next key rule…
Learn to Take Singles
Veteran traders: take singles, 10, 20, 30% gains add up over time, don't go for home runs
Pumpers: It's going to the moon, minimum of 10x your $, more likely 100x your money
Veterans: Lasting wealth is built one trade, one single at a time
Pumpers: Home runs only, no singles!
— Timothy Sykes (@timothysykes) June 24, 2020
Too many traders want every trade to be a 100%+ home run. We’ve seen some astounding moves in the wild pandemic market … but that’s not typical. And even Wall Street aims for about 8%–10% per year.
This rule goes back to cutting losses quickly. Once, I lost over $500K in one trade because I didn’t cut losses. You can read about that in my free book, “An American Hedge Fund.”
After learning that lesson the hard way, I shifted my strategy to trade more conservatively. And if you’re managing your risk, those singles add up over time. That’s how you build a small account, and exactly what I teach in my Trading Challenge.
Here’s what you don’t do…
Hold and Hope
Veterans: penny stock research is a sideshow for companies to do financings/insiders to sell at pumped up prices
Pumpers: I have the best research, I talk with IR daily!
Veterans: There's been manias before, see https://t.co/QTYT7tytOA never hold & hope
Pumpers: Hold longterm!
— Timothy Sykes (@timothysykes) June 24, 2020
Holding and hoping is one of the biggest mistakes I see new traders make. It’s nothing new. A new hot sector pops up, and suddenly ‘gurus’ lure uneducated newbies into stocks that ultimately fail.
Most penny stocks won’t become large-cap stocks. Don’t look at these trades as investments…
That’s the wrong trading mindset. Maybe a few of these sketchy will become real companies one day. But I don’t like those odds, and I’m not that patient. I’d rather take my quick singles trades and let them add up.
I teach my Challenge students to do the same. Let’s look at an example of how I trade with the right tools and the trading mindset…
Artificial Intelligence Technology Solutions Inc. (OTCPK: AITX)
I took this trade because it’s a former runner with coronavirus-related news. I got in the trade early at $0.023 per share thanks to the StocksToTrade Breaking News add-on. Check out the chart:
I ended up selling at $0.032 per share for a $1,600 gain, which you can check out on Profit.ly.*
This was a 39% gain, which is bigger than my average. But I waited for the right setup, then I took my single and got out.
You don’t need to aim for 100% or more for winning trades. Again, trades like this add up over time. I’m up over $5.5 million in trading profits over my past 20 years of trading.* And I didn’t do it through holding and hoping.*
(*My results, along with the results of my top students are far from typical. Individual results will vary. Most traders lose money. My top students and I have the benefit of many years of hard work and dedication under our belts. Trading is inherently risky. Do your due diligence and never risk more than you can afford to lose.)
Notice I mentioned former runners? This is exactly why you need to…
Study the Past
Veteran traders: the market doesn't owe you anything, 90% of traders lose due to lack of preparation
Pumpers: God wants you to be rich, I didn't pick this stock, God did!
Veterans: Study the past, history repeats
Pumpers: This is a breakthrough technology, ignore the past!
— Timothy Sykes (@timothysykes) June 24, 2020
History repeats. I often say I’m just a glorified history teacher. I’ve been trading the same patterns for over 20+ years in the market. It’s not exactly the same — I have to adapt to what the market is giving me right now.
But too many traders think studying the past is a waste of time. Then they ask me how I know about former runners or how to spot my favorite patterns again and again.
You have to prepare. If you study what stocks moved in past pandemics like Ebola or SARS, you’d know to watch a lot of stocks that spiked in the current pandemic. I broke some of those down in this post.
There’s not just one thing you can focus on in the markets. You have to learn it all. That’s how you…
Work to Become a Self-Sufficient Trader
Veterans: NEVER follow alerts/picks from anyone, learn to be self-sufficient
Pumpers: I want as many followers to buy my plays because that's my strategy!
Veterans: All penny stocks are junk, research is a joke
Pumpers: This penny stock is the future & will change the world!
— Timothy Sykes (@timothysykes) June 24, 2020
All the watchlists and alerts I send out to subscribers aren’t to get them to blindly follow my picks. In reality, the stocks in the penny stock niche can move so fast that by the time I send out the alert, it’s too late.
So why do I send them? To teach the process. I want you to understand why I picked those stocks. It’s another opportunity for you to study. What was the catalyst, the volume? How high did the spike run? Was it a short squeeze — and how can you tell?
My top Challenge students are self-sufficient traders. They learned my rules and strategies and then made them their own. Some even out trade me. Like Tim Grittani, arguably the best trader ever.
Start your learning process — sign up for my no-cost weekly watchlist here.
There’s something you have to always remember…
Discipline Is Key
Veteran traders: never get emotional about a trade, create a plan & stick to it, discipline is key
Pumpers: I'm in love with this company (who's paying me in shares/$ I'll never discuss publicly)
Veterans: treat trading like a business, be meticulous
Pumpers: Let's get coke $!
— Timothy Sykes (@timothysykes) June 24, 2020
You can learn all the right rules and strategies, but if you don’t stay focused and disciplined with the right trading mindset … you’re putting your trading career in jeopardy.
This another lesson I’ve learned the hard way. It’s why I trade like I’m a retired trader. A setup has to be so good, I’d feel awful for missing it.
That mindset helps me to not overtrade. Not gonna lie, it’s hard in this wild market. There are SO many hot plays. The volatility is insane. And I’m thrilled that all my wins will help someone in need since I donate all my profits to charity and causes like my Yemen fundraiser.
Get smart tips for navigating this volatile market — and any future volatility. I put together this no-cost two-hour video lesson to help you get through it. Get access to “The Volatility Survival Guide” here.
But the market won’t be like this forever. It’s bound to slow down. So overtrading now can mess with your mindset. You risk learning the wrong lessons and losing more when the market slows down.
I’d rather see students make a few good trades per week than take a bunch of subpar trades. That’s especially true if you trade with a small account. If you use a cash account and aren’t limited by the PDT rule, it can be easy to take more speculative plays rather than waiting for a great pattern.
Don’t do it! And in this niche, always…
Expect the Worse
Veterans: It's very low odds to buy when a pump goes red on day 3
Pumpers: Let's coordinate this pump with a few other promoters, we create our own odds!
Veterans: Never trade with anyone else, expect the worst out of everyone
Pumpers: Let's get multiple chats buying together!
— Timothy Sykes (@timothysykes) June 24, 2020
If you expect the worse out of these companies, you’ll never be disappointed.
Don’t believe the hype you see on Twitter. This is where the new promoters are. They love to tout these stocks. You can’t fall for it. Don’t fall in love with stocks — trade them and move on.
When I started in the markets, I was a young guy looking to make money in the markets. I had to learn to trade the hard way — through trial and error. Along the way, I had some big wins … and losses. I didn’t have a trading mentor.
There was no one willing to share what they knew about this industry.
That’s why I started teaching. I want to help dedicated students become self-sufficient traders. You can’t do that unless you really understand this industry.
People love to hate on penny stocks, but they don’t understand how to play the game. They don’t understand how to slowly build a small account. So here’s my last tip on how to get into the right trading mindset…
Build Your Knowledge Account
The best part? You can choose your level of commitment based on what works for you.
Start with my FREE online guide to penny stocks.
You can follow me on Twitter and on my YouTube channel. I release new trading articles and videos all the time.
You can get my student Jamil’s book “The Complete Penny Stock Course” to get a thorough overview of all my core lessons.
You can join Pennystocking Silver for access to over 6,000 video lessons and more.
And when you’re ready for the ultimate trading commitment, you can apply for my Trading Challenge. That’s where all my top students started. It includes access to the best chat room and trading community, live webinars, DVDs, and so much more.
It’s not easy. It’s taken all my top students years of hard work and studying to hit their market stride. But if you’re in the Challenge, you can trade right alongside them.
Think you have the discipline to make it in the Trading Challenge? Apply today and find out.
The Trading Mindset Conclusion
At the end of the day, there’s no single right way to trade.
What matters is your right trading mindset. Without discipline, it’s near impossible to make it in trading or to grow and protect your account. You gotta follow rules like cutting losses quickly and taking those singles.
You have to study every day.
If you’re serious about learning how to trade penny stocks, apply to my Trading Challenge.
What’s your biggest trading mindset issue? Let me know in the comments below!
The post Trading Mindset: How to Get It Right (and the Biggest Mistakes to Avoid) appeared first on Timothy Sykes.
5,045,564.
That's how many cases the US officially has (not that we are counting). 162,938 Americans are dead, that's much harder to cover up. Globally we are about to cross 20M cases at 19,877,261 with 731,570 deaths so the US has more than 25% of the global cases and 22% of the deaths - despite having just 3.7% of the population so Trump is right - America is leading the world by a factor of 6 - no one transmits the virus or dies from the virus like we do! MAGA!!!
The markets don't seem to mind and we're still up around record highs as the worst things are for the American people, the better things are for American Corporations, apparently, as the stimulus fairy comes and pays them visit after visit. President Trump played the fairy this weekend, waving his executive action wand and unconstitutionally wishing for various bribes to the voters:
- $400/week supplement to unemployment checks (states need to pay for it and Federal supplement comes from Disaster Fund that's meant for hurricanes, etc).
- Suspend payments on Student Loans through 12/31 (but not the interest).
- Extend eviction protection through 12/31 (the courts can't handle the backlog anyway)
- Defer Payroll Taxes through 12/31 (a disaster for the Social Security and Medicare System and also puts a huge tax burden on the employees at the end of the year they are unlikely to manage for, which will be blamed on Biden as a tax increase, of course)
In other words, Trump's Executive Orders are a whole lot of nothing but Congress and the White House have still failed to reconcile Democrats' $3.4Tn coronavirus-relief plan and Senate Republicans' far smaller $1.1Tn proposal. The Paycheck Protection Program expired Saturday. The future of the small business rescue plan is in limbo. “Meet us halfway and work together to deliver immediate relief to the American people,” Pelosi and Schumer said in a joint statement. “Lives are being lost, and time is of the essence.”
Joe Biden, noting that Trump signed the “half-baked” orders at his golf club in New Jersey, said they short-change the unemployed and trigger a “new, reckless war on Social Security." “These orders are not real solutions,” soon to be President Biden said. “They
…
- IPOX Indexes fall towards week-end, many still set weekly all-time Highs. Track SPACs with the IPOX® SPAC (SPAC).
- IPOX 100 U.S. (ETF: FPX) adds +0.80% to +12.64% YTD. IPOX International (ETF: FPXI) rises +2.31% to +40.58% YTD. IPOX 100 Europe (ETF: FPXE) gains +0.80% to +17.14% YTD.
- Issuer Flexibility matters: Rackspace (RXT) tanks while Rocket (RKT) rocks. More deals lined up.
Now track SPACs live with the IPOX® SPAC (Ticker: SPAC). IPOX is pleased to note the launch of the IPOX® SPAC, a benchmark portfolio focusing on Special Purpose Acquisition Vehicles.
IPOX Indexes fall towards week-end, many still set weekly all-time Highs. The IPOX Indexes rose last week to close at or near weekly-all-time highs. Trading Sentiment deteriorated towards the weekend on increased China-U.S. tensions with encouraging U.S. and European economic data driving some asset allocation away from the hugely outperforming growth-focused portfolios to conventional benchmark exposure and U.S. small-caps (RTY: +6.00%). In the U.S., e.g., the IPOX 100 U.S., underlying for the $1.5 billion “FPX” ETF, rose +0.80% to +12.64% YTD, lagging the S&P 500 (SPX) by -165 bps. on the week. Amid earnings and renewed corporate actions activity, weekly returns of portfolio holdings diverged sharply: While medical devices maker Irhytm Technologies (IRTC US: +62.33%) and security services provider ADT (ADT US: +41.70%) soared on strong earnings and an investment from Google, respectively, profit taking after earnings pressured infrastructure software makers Datadog (DDOG US: -19.80%) and Fastly (FSLY US: -17.70%). Abroad, we note a fresh weekly all-time
High recorded by number of IPOX Portfolios. The IPOX International, e.g., basis for the $220 million “FPXI” ETF, rose +2.31% to +40.58% YTD, extending the YTD lead vs. its benchmark to +4932 YTD. Here, big gains in Japan-traded exposure including leading courier services provider SG Holdings (9143 JP: +24.55%) and e-commerce firm Mercari (4385 JP: +16.97%) after blow-out earnings more than offset declines in some of the European-domiciled portfolio holdings including Swiss pharma products retailer Galenica (GALE SW: -6.99%) and German medical devices maker DAX-30 candidate Spin-off Siemens Healthineers (SHL GY: -6.07%) which fell after announcing the buy-out of U.S. medical equipment maker Varian (VAR US: +21.69%) last week-end.
| Select IPOX® Indexes Price Returns (%) | Last Week | 2019 | 2020 YTD |
| IPOX® Indexes: Global/International | |||
| IPOX® Global (IPGL50) (USD) | 1.63 | 27.93 | 32.47 |
| IPOX® International (IPXI)* (USD) (ETF: FPXI) | 2.31 | 31.37 | 40.58 |
| IPOX® Indexes: United States | |||
| IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) | 0.80 | 29.60 | 12.64 |
| IPOX® ESG (IPXT) (USD) | 1.66 | - | - |
| IPOX® SPAC (SPAC) (USD) | 0.93 | - | - |
| IPOX® Indexes: Europe/Nordic | |||
| IPOX® 30 Europe (IXTE) (EUR) | 0.98 | 34.55 | 24.77 |
| IPOX® Nordic (IPND) | 3.70 | 38.52 | 37.05 |
| IPOX® 100 Europe (IPOE)* (USD) | 0.80 | 30.97 | 17.14 |
| IPOX® Indexes: Asia-Pacific/China | |||
| IPOX® Asia-Pacific (IPTA) (USD) | 4.12 | 4.41 | 23.31 |
| IPOX® China (CNI) (USD) | 3.44 | 26.31 | 44.31 |
| IPOX® Japan (IPJP)** (JPY) | 5.63 | 37.91 | 6.06 |
* Basis for ETFs: FPX US, FPX LN, FPXE US, FPXU FP, FPXI US, TCIP110 IT and CME-traded e-mini IPOX® 100 U.S. Futures (IPOM0). Source: Bloomberg L.P. & Refinitiv/Thomson Reuters. For IPOX Alternative Strategies Returns, please contact [email protected]
| IRHYTHM TECHNOLOGIES | 62.33 | DATADOG INC | -19.80 |
| ADT INC | 41.70 | FASTLY INC - CLASS A | -17.70 |
| SG HOLDINGS CO LTD | 24.55 | EVERGY INC | -14.92 |
| CARVANA CO | 23.91 | ASSETMARK FINANCIAL | -13.03 |
| SOLAREDGE | 20.77 | CAMPING WORLD | -11.61 |
| MERCARI INC | 16.97 | CORTEVA INC | -11.34 |
| SOLARWINDS CORP | 16.88 | BLACKLINE INC | -10.85 |
| INARI MEDICAL INC | 16.10 | TWILIO INC | -10.24 |
| VARTA AG | 15.91 | CROWDSTRIKE HOLDINGS | -10.11 |
| MEITUAN DIANPING | 15.89 | CERIDIAN HCM HOLDING | -10.07 |
| ASTON MARTIN LAGONDA | 15.46 | DYNATRACE INC | -9.54 |
Issuer Flexibility matters: Rackspace (RXT US) tanks while Rocket (RKT US) rocks. More deals lined up. At least 11 companies went public across the global regions last week, with the average (median) equally weighted deal adding +40.37% (+13.30%) based on the difference between the final offering price and respective Friday’s close. Reception to last week’s deals was mixed: While Apollo-backed cloud company Rackspace (RXT US: -26.67%) fell, Detroit mortgage giant Rocket Companies (RKT US: +38.33%) climbed strongly after its 1/3 scaled-back, below-range offer. Shopify (SHOP US: +2.92%) competitor BigCommerce (BIGC US: +229.17%) tripled. China’s largest CRO Tigermed (3347 HK: +13.30%) also debuted strongly in HK, marking the largest healthcare-related IPO in Asia YTD. Insurtech unicorn Duck Creek (DCT US), Tencent & SoftBank-backed Chinese real estate broker KE Holdings (BEKE US), PE-backed Brazilian home furnishing retailer Lojas Quero-Quero (LJQQ3 BZ) and Philippine’s first REIT IPO AyalaLand REIT (AREIT PM) are lined up to list this week. Other IPO news Include: 1) Chinese EV-maker XPeng to add on recent EV-maker IPO fest, 2) Lufthansa’s Technik maintenance unit spin-off IPO still on the table, and 3) KKR reported to revive IPO of defense supplier Hensoldt in Germany.
Track global deal flow live on: https://bit.ly/2WMvnT9
The post The IPOX® Week, August 10th, 2020 appeared first on Low Cost Stock & Options Trading | Advanced Online Stock Trading | Lightspeed |.
How can I start my reselling business online?
Reselling liquidation lots can be a fun, fascinating, and profitable business. Many people would like to get in on such a venture but don’t know where to start.
The first and most important step is to determine what your niche will be. “Reselling liquidations” is far too broad for a brand new business, so you’ll want to narrow it down a bit. You may choose to resell items in a particular category such as clothing, electronics, or home goods. Some prefer to instead target resales from a specific retailer. If you choose to pursue this route, it’s best to select a retailer with a focus such as a home goods store or an electronics seller, rather than a broader catalog of general merchandise like Amazon or Walmart.
Once you’ve determined your niche, it’s important to research it thoroughly. Familiarize yourself with the types of products you’ll be selling and the current trends surrounding them. Find a good source of information on the direction your products are heading so you can anticipate coming changes in your market.
Finally, you’ll want to figure out where and how you will resell the items. Will you make them available online or have a physical presence in your town? There are a number of websites that are excellent for resellers such as eBay and Amazon. For local businesses, it may be best to start out with a stall at a local flea market or consignment mall.
When is the best time to start my reselling business?
While liquidation lots are available year-round, and it’s possible to start a resale business at any time of your choosing, it’s widely accepted that January is the best month for liquidation auctions. This is because retailers have a huge number of post-holiday season returns to process and many of these are still brand new products in perfect condition. Additionally, many retailers are liquidating merchandise they only carry on a seasonal basis, as gifts for the holiday season. For this reason, you’ll find the best selection of inventory, and often the highest discounts too, because of the sheer number of auctions going on after the first of the year.
What products can I sell to make money?
The truth is, almost any nonperishable good that is for sale in a retail store can also be found in a liquidation auction. Here is a list of some of the most common categories:
- Apparel, Footwear & Accessories
- Appliances
- Automotive Supplies
- Books, Movies & Music
- Cell Phones
- Computer, Equipment & Software
- Consumer Electronics
- Furniture
- Grocery
- Health & Beauty
- Home & Garden
- Industrial Equipment & Building
- Jewelry & Watches
- Mixed Lots
- Office Supplies
- Toys, Kids & Baby
- TVs
What retailers should I consider purchasing returns from?
The good news is that there are dozens of top retailers and manufacturers who sell returns and other products through liquidation auctions. One good approach is to focus on a retailer you shop regularly. This way you will likely be more familiar with the types of products they carry and better able to gauge the market. Some of the most popular include:
- Amazon
- Best Buy
- CVS
- GameStop
- GE Appliances
- Eddie Bauer
- JC Penney
- Lowe’s
- QVC
- Sam’s Club
- Nordstrom Rack
- Target
- The Home Depot
- Walmart
- Wayfair
- Unilever
Where can I purchase goods to resell on my own?
The B-Stock network is an excellent place to start. Our sourcing network features liquidations from dozens of leading manufacturers and retailers. We offer returns, liquidations, and overstock auctions as well. With our large selection, you’re sure to find plenty of auction lots to fit your inventory needs and your business budget. And since our network is so vast, you only need to apply for a reseller account once to gain access to auctions of all sizes and price points, located in warehouses across the country.
How much money can you make reselling goods online?
Some seem to believe that reselling auctioned goods online is a quick and easy way to make a buck. While it’s true that this can be a lucrative business, it can also be a lot of hard work, so it’s best to go into it with a good understanding of the process and its requirements. The best way to maximize your profits is to do plenty of research before you begin. Understanding your market, your target buyers, reselling requirements, and the sites you’ll be selling on is key. The more information you gather about your business before you begin, the better prepared you will be and the more likely you are to make reselling a success.
B-Stock works with nine of the top 10 U.S. retailers to help resell their returns, overstock, and other liquidation merchandise. We have dozens of private retailer marketplaces across different categories and conditions to suit your business inventory needs.
The post FAQs for First-Time Resellers appeared first on B-Stock Solutions.
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