Penny Stock Daytrading with Timothy Sykes

Penny stock daytrading’s popularity has skyrocketed in recent months, and the amount of retail investors, people like us investing in the markets, has jumped exponentially.

In today’s episode we talk with Timothy Sykes, one of the foremost experts in the penny stock daytrading area. He talks about:

  • Working with a plan
  • Daytrading without a plan is gambling
  • Learn from your mistakes
  • Always expect the worst and have a plan for that outcome
  • Always try to learn and be patient

For more insight into Timothy’s methods, check this out:

For more insight like this into investing and stock selection for beginners, visit


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Announcer (00:02):

I love this podcast because it crushes your dreams and getting rich quick. They got me into reading stats for anything you’re tuned in to the Investing for Beginners podcast led by Andrew Sather and Dave Ahern. Step-by-step premium investing guide for beginners. Your path to financial freedom starts now

Dave (00:33):

Welcome to the Investing for Beginners podcast. Tonight. We have a special guest with us tonight. Tonight. We have Tim Sykes from Connecticut. Tim is a great guy. He’s very entertaining, and he has a lot of great stuff he’s going to share with us tonight. So he has a great story. And Tim, why don’t you go ahead and tell us a little bit about yourself and thank you for coming and joining us.

Tim (00:53):

Sure. No, thanks for having me on; you know, I was just a tennis player growing up in small-town Connecticut when I got injured and got into the stock market. My parents gave me control of my roughly 12 grand in bar mitzvah, gift money. You know, they, they said, Hey, have fun with it. They thought that I would lose it all in the stock market. It wouldn’t be a good lesson.

Tim (01:13):

Instead, I got obsessed with just learning everything I could about the markets and, you know, gravitating towards trading as opposed to investing. And I turned the 12 grand into nearly $2 million before I graduated college, started a hedge fund because I thought I knew everything. And then I was number one in my category for three years, but in my fourth year, I got cocky and undisciplined. I lost 30% going too big, going for a home run instead of taping singles, which is how I had made all my money and previously, and then right around then, I was on a TV show called wall street warriors, a reality show. And because my hedge fund was down 30%, and you know, I like kind of lost all my industry credibility. I was drunk. And so I was very entertaining on the TV show because I was drunk and it every scene and people started to message me when the TV show aired and said, Hey, I want to learn, you know, how you took the 12 K and turned it into nearly 2 million.

Tim (02:11):

And, you know, no matter my drunkenness, I was still disciplined as a trader, especially after the loss was a better trader. So I closed down the hedge fund and got into teaching because most people who teach online are scams most traders lose. And I knew that you know, I could teach from my wins and my losses; no one in my industry talks about losses. I made a career of it since then, talking about my losses and mistakes. And now I have about 9,000 students and over 145 countries, several millionaire students and I teach rules and, you know, patterns and people can see my screen and learn. And now, you know, I trade stocks, but I donate all my trading profits to charity. Because I want to teach, you know, my students, the process. So I show all my wins. I show all my, and 2020 has been a tough year for the world, but it’s been a crazy year in the stock market. I’ve made over a million dollars this year. And I think this trend is going to continue just given a whole lot of different dynamics going on in the world. So I’m here to try to teach through my successes and failures.

Andrew (03:19):

Very cool story. And we appreciate the transparency, Tim. Also, thank you for joining us. So you mentioned you got on disciplined when you went into the hedge fund year four. So can you maybe talk about some of the disciplines that maybe you had, and then you lost and then hopefully, you know, I’ve learned from that, and maybe we can get some perspective on that?

Tim (03:41):

Yeah, a hundred percent. So, you know, I mean, I had always made good money, I guess. I mean, again, from a small town in Connecticut. So if you make like a hundred thousand $200,000 a year, that’s good money on wall street. I mean, that’s, that’s nothing. So I was very confident in my ability to make a hundred or 200,000, but when I got into the hedge fund worlds, you know, it was just being looked down upon. So I tried to, you know, go for a longer-term investment. I ignored all the quick trades that I usually did, and I got my butt handed to me. And that really helped solidify the rules that I now trade by and teach where, you know, making a hundred thousand 200,000 in a year is fine. And, you know, I really try to teach my students to aim small Ms. Small rule.

Tim (04:28):

Number one is cut losses quickly. So I show all my trades publicly, and you can see, I lose about a third of the time. But my losses are a hundred, $200 each, and my gains are an average of a thousand or 2000 each. So if your gains are ten times the size roughly of your losses and you win more often than you lose, you know, you’re on the right track, the problem comes in. The reason why 90% of traders lose overall is that they don’t cut losses quickly. They don’t want to take a loss. It’s not fun; it’s not good for their ego. So instead, when they have a loss on that when whatever stock they’re in or whatever investment they’re in, they get stubborn. Sometimes they double up or triple up, and they say, I have to be right. And then guess what? Sometimes the stock does come back, and they’re rewarded for their bad behavior, but most of the time, and you know, this is how I trade and teach where I’m trying to trade a process that works the majority of the time, not just sometimes you know, sometimes they’ll get the wrong lessons and oftentimes you know, they’ll lose big, and you just don’t need to lose big if you stay disciplined and keep your position small. And you know, I say like trade, like a sniper.

Andrew (05:39):

Okay. As a sniper, that’s a cool metaphor. You mentioned you, you trade quickly, and you cut losses quickly. How quick are we talking?

Tim (05:48):

I mean, sometimes within minutes, certainly within hours. I rarely hold a stock more than a day or two, you know, I’m trading low price stocks, like the stocks that pretty much everyone hates like a lot of like scammy, sketchy stocks, like The Wolf of wall street stocks. And so what I say is expect the worst out of all these companies, and you’ll never be disappointed. And I’m not looking to invest in them. I’m not saying they’re good companies; I’m just trading their volatility. And, you know, as I said, you know, normally I make a hundred thousand 200,000 per year. That’s what I’ve done over the past 20 plus years. But this year, you know, I’m up to over 1.1 million just cause there’s so much volatility. I’m trading Coronavirus stocks; I’m trading electric vehicles, stocks, solar stocks, weed stocks, crypto stocks. There are so many different sectors that have just skyrocketed. So I’m not necessarily, again, believing in any of the sectors I say, ride the hype. Just never believe it. I have a lot of little sayings. It, it keeps my students, you know, having the right mindset.

Andrew (06:45):

Yeah. Yeah. Most definitely. I don’t think we should gloss over the fact. You mentioned a third of your trades are not profitable. That means two-thirds of your trades are profitable, which whether you are using particularly for such a short time period, I know that the way stocks move can be like a coin flip, and even with a good technical analysis type of strategy, a win rate that high is not very common. So how do you maintain such a high win rate in your store?

Tim (07:17):

Yeah, so I have a counterintuitive strategy where, you know, I’m not trading stocks like Amazon or Facebook, where pretty much everyone in the world was trading that you can trade them any day. They’re very liquid. I’m specifically waiting for a low price stock to show me that it, it deserves to be, you know, traded. So sometimes I don’t even trade for a whole day that hasn’t really happened lately in 2020, just because of so many plays. But in previous years, there would be a day, two days, sometimes three or four days where there were zero great stocks in play. And what I’m looking for when I say in play is like a big percent gainer. Like the stock is up 50, a hundred, 200% because with these low price stocks, oftentimes they’re up 50, a hundred percent, 200% on some news.

Tim (08:01):

And that news usually takes a little while to work its way through social media. And, you know, there’s all these like chat rooms. And now there are so many people on upstarts, like Robin hood and Weeble. So it takes a little time because penny stocks, you know, the people who trade these low price stocks are not the most financially savvy. They’re not the most meticulous. And that’s why I say like, it’s like trading like a sniper. You know, if I would compare this to war, which I do, I say that this is a battlefield I’m kind of like, you know, the American revolutionary is hiding in the trees fighting guerrilla-style, and I’m picking off the British red coats one by one. And they’re all just, you know, out in the center and, and I’m hiding in the trees. So I wait for the best shot where I have patterns that I’ve known patterns that I’ve refined over the past 20 plus years. Again, it’s not an exact science; as I said, I do lose. And that’s where the discipline comes in, but the patterns that I wait for, you know, work more times than not. And it’s just a game of patience and then discipline when they are not working.

Andrew (09:05):

It does. Yeah. It’s a philosophy. It makes sense. And you’ve obviously had experience with it, and you found your niche in the market. So I would assume you’re a pretty big advocate of day trading in general. Are there myths or misconceptions about day trading that you feel presented unfairly?

Tim (09:24):

Yeah, I mean, well, I’m an advocate to some degree. I think that many people shouldn’t do it. You know, like, I, I don’t think that you should risk your hard-earned money unless you’re fully prepared. I have 7,000 plus video lessons now, so I have a whole library. And I encourage everyone to, you know, either paper trade, which is, you know, not real money. Like it’s like a kind of like fantasy money while you’re practicing or not trade at all. Or even if you are trading trade very small, because like, I can’t overestimate the fact that 90% plus the traders lose its terrible odds, a terrible industry. You can’t go into day trading and be like, Hey, I’m going to be a millionaire. The odds of it happening are very, very slim. And the odds are like zero. Suppose you’re unprepared if you don’t know the rules, if you don’t know the patterns if you don’t know what discipline means. So a lot of people just get into it, and they’re like, Oh, the stock market’s on fire, like day trading, so great. And then they get crushed, you know, like I always say, you know, there’s a little, have you seen that? E-Trade baby on the commercials where it’s like dancing, have you seen that?

Andrew (10:24):

It was several years ago, but I remember a few commercials.

Tim (10:27):

I was like, no, like there would be if that was a real thing and like the baby was trading, it would be like a black and blue baby. It would be a bloody battlefield, and it would have to be blurred out on TV. It won’t even make sense if you look at the industry stats. So I think that you know, a lot of people think that it’s easier than it really is. I think that they think that they’re going to make too much right away. You know, I have made millions of dollars, but it’s, it’s been over several years, and I’m literally working 12, 14, 16 hours a day. Not necessarily like researching new companies; there are not that many low-priced stocks; it’s really, you know, trying to stay disciplined. And a lot of this is like, you know, mindset. Like if I’m, if I’m hungover for whatever reason, the next day, you know, at, at the start of the open, like I, I probably won’t trade very well.

Tim (11:17):

It’s such a fragile profession. And I would; I would even not even call it a profession because again, most people in this are just gamblers, and they’re just saying, Oh, this company looks good. Oh, this stock looks good. And the odds of that, I mean, it’s just like going to a casino. The odds are not good. And the reason why casinos make billions per year is that the house always wins. Like it’s based on stats and odds. So individuals very similar, the reason why E-Trade and Robin hood are multi-billion-dollar businesses. Not because the traders are so good, but because they make money on every single trade Robin hood doesn’t even charge commissions. And they’ve in all these people into thinking that like, it’s so easy to trade when in fact they’re actually selling their orders, routing their orders to Citadel. It’s a whole nasty scheme. Like Robin hood historically has been someone who takes money from the rich and gives to the poor, but it’s actually messed up. Their business model takes from the poor and gives to the rich.

Andrew (12:11):

Yeah, I’ve been; I get the Bloomberg business week magazine delivered to me like an old man. I get the hard copy. And it’s been interesting watching the evolution of Robin hood and w you know, they’ve been kind of, it almost sounds like they’re remorseful to say that the average Robinhood user has actually been outperforming first. They piled into all of the work from home kind of plays. And then they’ve since moved on to the economic recovery plays. And frankly, it’s, it’s blowing a lot of the hedge funds out of the water. However, it does feel like there’s a lot of amateurs in there, and that’s refreshing to hear from someone like you, who’s obviously had a lot more experience than people who’ve just maybe downloaded the app this year, that, Hey, this isn’t some easy thing, just because people are getting lucky right now. It doesn’t mean they have systems in place that can sustainably give them success over the longterm.

Tim (13:11):

Yeah. I mean, when I first made my million, like I had no risk management, I was in the right place at the right time when I got started back in 99 and 2000, I was really primed to lose. I mean, I’m, I’m fortunate. I only lost a third of it, even though, you know, it destroyed my industry credibility and destroyed my ego, which actually was good at the time. That’s what’s happening here. People are in the right place at the right time. It doesn’t make them good traders. It doesn’t make them knowledgeable. And when the market shifts as it inevitably will, whether it’s 20, 21, or 20, 22, or 2023, whatever money these newbies are making, they’re going to lose it very quickly because they’re just unprepared. You know, stock trading can be very confusing where you learn the wrong lessons from your wins, and you think that you know more than you do.

Tim (13:56):

And then all it takes is very small market shifts and sector shifts for you to get humbled. You know, I, I have a saying, I have another saying where I say, like, you know, the more confident you are, the cockier you are, the more likely it is that you will be humbled by the market and you’ll get taught a very expensive lesson. So that, that’s just a question of when, and if you actually talk to any of the top traders or investors or billionaires that give interviews, they’re all saying, you know, this is a bubble market it’s not sustainable and, you know, newbies and people who are doing well, they just don’t want to listen. But again, they’re going to learn the hard way, unfortunately.

Andrew (14:38):

Yeah. Unfortunately, you really can’t; you really can’t convince them otherwise. So w we like to dive deep on our show and really get into some of the nitty-gritty behind some techniques and strategies. And, you know, obviously, we don’t want you to give away the secret sauce or anything, but okay, let’s do it then

Tim (14:59):

Literally anything, I will tell you my best secrets, because this is my whole business. I wanted to try to put myself out of business by sharing everything. But unfortunately, even when I give everyone the exact patterns and rules, they still somehow screw it up.

Andrew (15:12):

Yeah. Dave and I are the same way. And you mentioned most of the industry is not, so again, refreshing to hear from somebody else. So risk management, then are you talking about certain position sizes? Does it depend on a person’s risk tolerance? Whether it’s a student or some of you’re teaching through a podcast or a YouTube video or something, what, what are, we’ll talk about some of the risk management ideas.

Tim (15:37):

Yeah. So everyone is different. As I’ve learned, I mean, I’ve been teaching now for 12 years. So you have to find your own risk levels. Everyone has a different account size, different experience, level, different goals that we live in different time zones. And what I tell my students is to think of themselves as kind of like scientists, where they’re doing experiments. And they’re like, okay, on this trade, you know, I made $4. That was good, but it wasn’t that much on this trade. You know, I didn’t cut losses quickly enough. I lost like 300. So every single trade becomes an experiment, and you start learning, you know, your own sweet spot and, and you try to figure out like what you’re good at, what you’re bad at. You know, for me, I really don’t like losing more than a few hundred dollars on trades.

Tim (16:17):

So if anybody becomes my student, they are shocked at how quickly I exit. Sometimes I exit even when I have a profit. And I just say, you know what? This stock is not doing what I think it will; you know, when in doubt, get out. So I’m extra cautious. And, and that prevents me from having some big wins. Cause again, sometimes I cut losses, and then the stock does what I want after I’m out, but I feel no guilt because I specifically have optimized my strategy. I’ve done enough experiments, like literally tens of thousands of trades over the years, where I know what I’m good at. I know what I’m comfortable with, but one person watching this or listening to this might say, Hey, I don’t want to lose more than $50. And then somebody else says, you know what, I’m a little more aggressive.

Tim (16:59):

I think I can lose up to $500, but I will say no matter what, you also think sometimes the market just moves so fast. So even if you say, Hey, I want to only lose $500 on a trade. You might take a big position. Cause you’re like, okay, I’m aggressive. And then the market will move quickly against you, and you’ll lose 5,000, and you’ll be like. So, you know, there are two moving targets, finding what you’re good at and then finding, you know, what you’re good at with the markets. And the whole goal is to try to be in tune with the market and in tune with yourself. And that’s why I love trading. It’s not just about, you know, the money that you make or the money that you lose. It’s how you can refine your own process to be the best you can two years, three years, five years, ten years from now. And I always tell my students, like, think of this as, you know, endless experiments and even ten years from now. I mean, there’s no magic or perfect experiment, but again, you, you get better over time, and you start learning, you know, the ins and outs.

Andrew (17:56):

So out of all of that experimentation and the tens of thousands of trades, do you have any losers that, where you lost a ton of money in a short period of time that really stung and stick out to you as a good learning experience?

Tim (18:10):

Yeah, I mean, so again, I’m, I’m in and out so quickly these days because now I have 20 years of experience. I know my own risk levels, but the big loss that really, you know, sunk my hedge fund, where I lost a third in one trade. It wasn’t quick; it was a long-term investment. I invested in my best friend’s dad’s company. They basically invented prints at home ticketing. I got all excited about their product. They won deals with universal studios, six flags Expedia. I mean, there was a small company, but they won some big deals. They basically invented the technology, and I had not learned risk management yet. Before that, I was like batting a thousand. So I was like, I can do anything. I was actually there at six flags amusement park when Mark Shapiro, who was the head which basically invented Disney.

Tim (18:56):

He was head of six flags. And I was there just with the whole it was called Cygnus E transactions. I was there with the team, and he thought I was like, one of the programmers. He didn’t know I was one of the investors. And he, you know, tried out the whole printing at home technology on his phone, and we printed it at a kiosk, and he went around the group, shaking everyone’s hands, being like this technology is revolutionary. It’s going to change the world. And this is the guy who invented ESPN. So that day, I put it in another a hundred thousand dollars. I was so confident. Later on, a few months later, my best friend’s dad actually got thrown out of the company. There were all these debts. They had created good software, but the financials were just a mess.

Tim (19:34):

And the new CEO came in and said, okay, we’re going to clean everything up. I had a lunch meeting with him one time, and he was like, don’t worry, you’ve invested in a good company. And the technology is solid. I’m going to turn this around. And I was like, Oh good, thank God. Because, you know, I invested a lot in my head fund, and I had gotten away from my trading. I couldn’t even get out if I wanted; I had a big position. It was an illiquid stock. And the new CEO plunged the company into bankruptcy, wiping out all initial shareholders and debt holders like me. And then somehow he kept all the contracts, and he bought the company in bankruptcy court for pennies on the dollar later; it basically got sold for $80 million. So I would have made like 15, 20 million, but I learned a valuable lesson just because you like technology. And even if you’re right about the technology, that doesn’t necessarily mean you’re gonna make money. There’s a lot of things going on with these companies, especially tiny startups, where if things just don’t add up and they can easily just go bankrupt and wipe everybody out.

Andrew (20:34):

That is a pretty incredible story. And wow. What a way to learn that lesson? You mentioned the struggling financials of the company. Are you today looking at financials at all? I am going to assume. No, just because you mentioned how, how quick your trades are, but you know, I could be wrong. What’s, what’s your thoughts on that? Do you teach people to look at those?

Tim (20:54):

No. So I, I mean, I, look, I have a DVD called learned to read sec filing. So it’s, it’s good to learn how to like read a balance sheet and go through the long, like 40, 50, 70-page legal filings. But in this day and age, I just expect the worst. Like any stock I trade, I expect that they’re going to go bankrupt. And that way, I’m never surprised when something shady happens, you know, yesterday GI this little piece of crap penny stock, they they have like this magic disinfectant, which again, I just expect the worst. I think that they’re full of BS. I picture Wolf of wall street pumping this stuff, but they put out a press release basically saying like, look, our, our disinfecting light rays and UV products is going to be sold in Target and Walmart.

Tim (21:40):

And there’s; also, I think they said like a 35 or a $45 million order. And I was like, okay, you know, I, I don’t believe a word that you say in this press release, but I recognize that other people will. And I recognize that this is probably going to spike the stock. And I bought it, and it didn’t really do much. So I sold out; I think I might’ve made a small gain or small loss. It didn’t matter. It was basically a scratch. But the interesting thing was, like three hours later; they came out with a press release saying whoever put out the press release earlier this morning, that was unauthorized. We have no deal. We’re talking with authorities now. And I was like, I re I just was not surprised. And a lot of other chat rooms were like; this is crazy.

Tim (22:17):

And I’m like, expect the worst. And you’re never disappointed. And I can give literally thousands of examples where there’s a mistake in press releases, hyped up, press releases. You know, the management can just say whatever they want and a press release. And then in the sec filing and the legal filing, there are 20 pages of like risks of how the company is about to go bankrupt. Never forget. It’s not just with penny stocks. People say, Oh, well then, why trade penny stocks it’s any stock? If you go back through, you know, history bear Stearns was on the verge of bankruptcy. I think it was a CEO or CFO who was on CNBC the night before bankruptcy. And they asked them, how has everything I said, everything’s fine. Everything’s fine. The rumors are untrue the next day, bankruptcy. So, you know, corporations and management, they’re basically paid, cheerleaders. You just can’t believe a word that they say, and they’re always gonna hype up best-case scenario, whether it’s legal or quasi-legal, early illegal, I’m not a lawyer. I just literally expect the worst, and I’m not disappointed anymore.

Andrew (23:18):

Really. It really shows the importance of knowing what you’re doing and, and researching and, and having that skeptical mindset.

Tim (23:25):

I’m like a battle-tested, you know, weary general. Who’s just been in so many battles. So I’ve just seen so much stuff. And that’s why people are like, why do you still trade these, these little crappy stocks? And I’m like, I just have so much experience. I can basically see, you know, how bad they are. I can see what, how this is gonna play out. A lot of the time, I write these blog posts exposing a lot of these scams, and I say, okay, here’s like ten red flags. And the STAM keeps going for a week, two weeks, three weeks. I face a lot of hate on social media. They’re like, you’re wrong. The stock keeps going. And I’m like, just wait, just wait. And then, sure enough, it crashes. And then everyone who hated on me is like, how did you know? And it’s, it’s not rocket science. If you start seeing these companies being promoted, there might not be the Wolf of wall street anymore. But if you start seeing too aggressively hyped up, press releases if you start seeing a stock, that’s just run up a thousand, 2005000%. It always ends badly. There has not been one penny stock that I’ve traded that has actually made it. And they’ve come through. I mean, we’re talking about thousands of companies, all failing to various degrees.

Andrew (24:30):

So then with the minefield, that sounds like penny stock universe is, are you ever taking the opposite side of the trade where either you’re going to trade shore or maybe buy putts or do anything like that to profit from a stock? That’s basically a train wreck, a hundred percent.

Tim (24:48):

Usually, the companies that I’m trading are not optionable. I would love that if there were penny stock options and, and puts, I would make literally billions of dollars cause they all fail. I do try to short sell every now and then. I’ve done more of that in the past. The crazy thing about 2020 is that it doesn’t even matter if it’s a scam. It doesn’t even matter if it’s going to crash eventually. Like everything just goes up. So I’m, I’m hardly ever shorting right now. But in the past, you know, I’ve made $6 million now, total and trading. I would say probably two, two, and a half million is from shorting. Another bad thing was shorting. You know, wherein case your listeners don’t know, it’s like where you’re taking a negative position and your profit.

Tim (25:26):

When the stock goes down a negative position, times a negative change in stock price equals a profit. And that confuses a lot of people because you’re like, what? Like you’re, you’re selling shares. You don’t own. And for me as a teacher, even when I nailed the short, you know, a few years ago when I was more into shorting and, you know, exposing a lot of these pumping dumps, my students would be confused. And so I would sometimes like when like 30, 40, 50% gains on like a perfect pumping dub and I would get like six cancels. And I was like, w I would message them. I was like, we just nailed this stock. I’ve been warning about this for two weeks. How can you cancel? And they’re like, yeah, sorry, it’s just not for me. So it’s not even just about how much money you can make or how, how probable anything is for me as a teacher; I want to teach strategies that, you know, my students don’t feel uncomfortable with or like it hurts their head. So I mean, I teach how to spot the scams. I teach how to short sell out of my 7,000 video lessons, probably like 2000 or 3000 of them are on short selling. But right now I’m, I’m pretty much just long based.

Speaker 4 (26:29):

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Dave (26:39):

That is some great stuff. So I guess some that have popped into my mind while I’ve been listening to you guys talk. So you mentioned that you’ve been doing this for 20 years. So do you feel like that there are certain time periods in the market cause you’ve been through some, you know, if you started in 99, 98, you were, you were starting right before the tech bubble, and now we’re in arguably a bubble and we’ve seen some pretty severe ups and downs? So have you seen, has that kind of affected your mindset and how you do what you do?

Tim (27:15):

Yeah. I mean a hundred percent. I’m, I’m always trying to adapt. If you look at stats, I mean 304 stocks follow the market. So you know, no matter what’s happening, like, like I said, right now, I see a lot of scams. I see a lot of stocks that deserve to be at zero or close to zero, but they just keep going up because they’re in the right sector and they’re in the right market. So I teach this, you know, I, I have to respect the market, even though I don’t necessarily agree with it. You know, I don’t know anybody. Who’s very wealthy who disagrees with the market for too long and, and puts money on those disagreements. I mean, the market is always right. So you have to judge that. You have to expect that, you know, I, I’m just trying to take it one trade at a time in this bubble market. I don’t know when it collapses, you know, all the trends right now with more people, staying home, all these cheaper brokers where there are lower barriers to entry all these hot sectors. I mean, I don’t see anything happening anytime soon, but who knows, you know, so I don’t try to impose my will on the market. I try to react instead of predict.

Dave (28:17):

Yeah. That’s, that’s awesome. So I guess kind of following through with that. So with the advent of no-fee trading with platforms like Schwab and fidelity and others, has that affected what you do.

Tim (28:32):

Yeah. I mean, there’s just more, literally more traders. So there’s a lot more liquidity, a lot more volatility, a lot more newbies who want to learn. So I mean, my, my education business is booming. I’ve just doubled the number of employees that I’ve had in the past few months, just to try to keep up with everything. I’m trying to record new guides that go along with this new bubble market. So I’m like, okay, here are the rules for this bubble market. They’re a little different than, you know, a slower market than we saw in two, not 2019, 2018. A lot of it is just trying to adapt and try to take advantage of, you know, what we see happening in, in, you know, again, it’s the trends. A lot of people make all these assumptions where they think they’re gonna make so much money right away.

Tim (29:16):

And I always remind them like, you know, my top student has made $13 million. He started at $1,500, but that’s over a decade. And he made nothing his first nine months while he was studying. So a lot of what I do is just getting people in tune with these counterintuitive rules and lessons. You know, almost no one is going to make, you know, $13 million like that best-case scenario, if you can make $10,000, you know, that’s still amazing. So you have to have the right perspective. And right now, again, like if you’re getting started, it’s going to be a very different experience, started in 2020 than it would be like in 2008, which was, you know, a tough year for the market. So I’m just trying to adapt.

Dave (29:56):

Yeah. That’s a, and that’s, that’s the way you have to do it because the market is, you said it’s a cruel mistress. And if you don’t, if you don’t adapt and pay attention, you die. And if you don’t respect it, it’s gonna; it’s gonna bite you in the butt big time. So I guess another question that kind of Springs to mind, so as the trading gets more popular and there are more and more, you know, as you said, the market goes up right now, does that mean that there are more companies coming online in essence to give you the opportunity to have more targets to shoot for, in other words, more companies to try to, to, to do your magic on?

Tim (30:35):

Yeah. I mean, there are endless companies right now in all different sectors. I mean, a lot of the times, sometimes in my chat room, like I have commentary and I’m just like, you know, looking for my favorite patterns, and I’m like a fire out we’ll fire at will. And it’s like the scene from Star Wars where there are just bogeys like everywhere. And it’s like today I made like five trades yesterday. I made seven the day before I made 10, like, you know, this is a lot of trading for me. I don’t, I, in the past years, I mean, I would sometimes make one or two trades per day, sometimes one or two trades per week, just waiting for something to be like in play and hot. And now it’s like every single day. So I’m not traveling much because of everything that’s going on. And even if, even if, you know, I could travel, I don’t know if I would, because I’m just trying to capitalize. You know, when I see these patterns that I know I feel guilty if I don’t, you know, take advantage of it. So I’m trying to take it one trade at a time.

Dave (31:34):

Yeah. That’s, that’s the best way to do it. And so, as somebody that is honestly was not as familiar with this style of investing and trading, it, it sounds, I got to admit, it sounds a thousand times more disciplined than I ever thought it was. And you know, the misconceptions, of course, are coming from the BDA. We, you see, as you said, the Wolf of wall street, you just have this vision of all this craziness going on and all these crazy people. And it’s, it’s, you know, I have to admit it’s, it’s far more disciplined than I thought it was. So I appreciate you telling me about this. So I guess thinking along those lines, as people are becoming new to this, how, how do, how should they, I guess, will lower their expectations because with the explosion of things like Tesla going up 700% in a year and Bitcoin and, and you just on and on and on people’s expectations now are sky-high. What if they, you know, put a thousand bucks in the market, I’m going to make $10,000 by the end of the year. And it’s just; it doesn’t work that way, as you know.

Tim (32:40):

Yeah. You have to lower your expectations. I mean, no different than how I say like I expect the worst that of all companies expect the worst on every trade. Like, just imagine, no matter what, how excited you are about Bitcoin or Tesla or anything. I imagine the worst-case scenario. Like what if the FBI raids, Tesla, what if Bitcoin Coinbase gets shut down for tax fraud? I mean, just, I don’t think any of that is going to happen, but just expect the worst. And if you expect the worst and you’re always like ready to exit, that really kind of protects you. Like I say, if you trade scared, then trading isn’t so scary. And a lot of people disagree with me on that. They’re like, come on; you don’t need to be scared. And I’m like, yes, I do. Okay. I’ve been there while I personally lost $500,000.

Tim (33:22):

I was freaking right about print. I don’t take it. And that’s what really bugs me. Like I was so dead-on about the technology, but I was just, I didn’t understand the risks. So always consider the risks. And, you know, I, in every interview I give, I say, look, 90% of traders lose, like, yeah, some of my students become millionaires, but most traders lose. And the way to differentiate yourself between those who lose versus those who succeed, it’s all about hard work and preparation. Like, you know, my top students are putting in 10, 12, 15, 20 hours per day, not just looking at the markets, not just trading, but looking back at the past, you know, I have 7,000 video lessons. I have 15 online DVDs. I have over a thousand archived webinars. My students are going through that. I’m basically a glorified history teacher.

Tim (34:07):

And while there’s no magic formula, you know, you can see that these patterns repeat the same stocks, the same sectors, start to heat up again, especially with low priced stocks. You know, you see the same idiotic assumptions, the same hype, a lot of the same promoters. They just changed like websites or usernames. They’re all like, you know, mysterious online. They have different username names, and then they disappear, or the party gets cold, and they pop up again. And it’s the exact same pattern. So for me it’s, it’s studying the markets very, very closely and meticulously. Like, you know, one of my favorite movies is the last samurai. If you research on the samurai, yes, they did adapt to new technology. That’s basic they got wiped out, but they were notorious for always, you know, just practicing, practicing, practicing, practicing, and that’s what trading is all about.

Tim (34:56):

It’s endless practicing, and it understands that practice does not make perfect, but it increases your odds of success. And that’s all you can do in any past time. So I really teach people to be obsessive, like the Mamba method, Mamba mentality, where you’re like practicing your free throws at 3:00 AM. 4:00 AM. If you follow me on Twitter, I have like these 10:00 PM study checks 1:00 AM study checks. I’m like, how bad do you want it? Because that’s, that’s the reality. If you truly want to succeed in an industry where 90% plus of traders lose, forget about making millions, like they can’t even make a dollar, the majority of traders you have to put in more time knowing the patterns, knowing the key resistance levels learning from history, you know, just where I explained my, my worst trades. I always explain my worst trades and my best trades, and all my trades.

Tim (35:49):

And that’s the beauty of why I’m so excited right now because never before have we had the ability to share so much information so freely. So I think education is really gonna blossom over the next few years as more people start to take advantage of it. And hopefully, instead of watching Netflix or playing video games, they start really focusing on these new tools. Like just the fact that we’re able to communicate. And the fact that people are able to listen to this, whether it’s a truck driver driving on the road, which, you know, I have some students who are truck drivers, and they should not be watching video lessons, but podcasts are okay while they’re driving. Like, what are they? I get these book drivers who are like, yeah, I’m studying. I’m like, don’t drive and study, focus on driving a giant truck that is dangerous. But you know, whether you’re a book driver or whether you’re, I don’t know somebody who’s a lager in Montana or somebody who’s in, you know, Brazil or China, like it’s, it’s crazy what the internet is doing. And I really don’t think that most people realize how game-changing this technology is. I mean, this thing is only a little over, like a quarter of a century old. So there’s a lot more coming.

Dave (36:59):

Yeah. I would agree with that. And I, you know, that’s the premise of what Andrew and I have been trying to do all these years is try to help educate people. And we agree a hundred percent with what you’re saying that the education is, is so lacking in. There’s so much out there that people need to know and, and learn. And if they, if, when they walk into a situation, whether it’s the trading, investing, whatever it may be, and you walk in, they’re uneducated, you’re going to set yourself up for some possible heartache. And that’s the scary thing. And you know, like you were talking about being afraid of your losers. I’m afraid of my losers. I’m terrified every time I make an investment; I’m scared to death that I made a bad choice, that this is a wrong decision, and it could end up costing me money and anybody else who listens to my money. And so that fear motivates me to always do better. And it sounds like that’s something you probably ascribe to as well.

Tim (37:54):

Yeah. You always have to be, you know, learning. And, you know, I say like a lot of my best students who are succeeding now in 2020, I mean, they’ve been my students for four or five years. They weren’t necessarily doing that well early on, but they stuck with their education. They learned what not to do. They learned from their losses, they learned from their mistakes, and they kept going. The biggest mistake you can make is you let your losses, you let your early failures get to you, and then you just give up, and you’re like, oh, I’m not good at trading, or I’m not good at whatever. And you don’t utilize your experiences as you should. I got started in the right place at the right time. So I didn’t have the losses at the beginning that I should have, but, you know, based on my printed home ticketing company, I got the losses, I got the necessary part of my education.

Tim (38:35):

And you can not have a complete education without massive failure without that, you know, box checked off where it’s like, okay, massive failure. Don’t do that again. And you learn from that pain, you learn from that anger. I mean, I was drunk for literally like two or three years afterward. I thought my life was over, but I got back to, you know, taking singles instead of going for home runs. And now this is what I teach, and I can teach for my wins. I can teach for my losses. I teach from every trade. You know, my, my video lessons about my losses are viewed three times more than the video lessons about my wins. And I love that because I’m not afraid of the losses. I’ve gotten much better at controlling them. Being a teacher actually makes me more disciplined because I don’t want to look like an idiot in front of all my students.

Tim (39:21):

I don’t want to, you know, display bad behavior. I want to practice what I preach. And I think more people should share everything related to their, their own journeys. Obviously, there’s sometimes oversharing. But when it’s related to your business career and in the lessons, I wish more business people. I wish more traders and investors shared everything, but they’re afraid of creating competition. They’re afraid of other people doing it. And I’m just not like, I, I love the fact that not only do I teach my students, but now several of my top students have joined my team as employees. And they give webinars to other students because they’ve learned everything, and they have their own take on my strategy. You know, I have a book called the complete penny stock course was written by one of my students. And he was like, Tim, I like what you’re teaching.

Tim (40:07):

I like this, but you’re disorganized. You have all these video lessons, DVDs, and webinars everywhere. Let me put it into one book. I have academic training. I was like, cool, do it. And that book has become the best-reviewed book of my entire niche. And it’s written by my student. Who’s describing my strategies, but he’s right. I am overwhelmed. I’m not organized. I wish the market would just shut down for one or two or three years, and I could collect myself, but that’s not happening. So I think if you start learning and you start sharing everything online, you start finding other people who get it. And they, you know, they can join you in your mission, whether they’re your employees or your students whatever it is, it’s actually pretty cool how you can now crowdsource information and education.

Dave (40:52):

Yeah, that’s awesome. I love that mindset. That’s you’re coming to me; you’re coming from a place of abundance. Like there’s enough of this to go around, and we can help people. We can help each other. And for whatever reason, Andrew and I have talked about this in the past, for whatever reason, investing day-trading, whatever it may be. It’s, it’s gotten a reputation as, as a solo sport. It’s not people don’t consider it a team sport, and they’re not; people don’t really want to help each other. I’m not really sure why that is. And I know that yeah.

Tim (41:28):

I mean their competitive edge. I get it. Like if you make a lot of money, you don’t necessarily want to share these techniques with other people. But for me as a trooper, I’ve, I’ve changed my business around to make it beneficial. Like it does mean no good if I made money on a trade and all my students are losing, and I’m like, haha. I made money. And they’re like,

Dave (41:48):

Yeah, yeah, that’s, that’s true. And I would, I would agree with that. And you know, I, I, I love the reference that you were talking about with the Mambo philosophy. And I know Andrew will love that too, cause he’s a huge Kobe fan. But you know, I think about some of the things that you were talking about, Michael Jordan Springs to mind when I think about failure and overcoming your failure, you know, he, he didn’t make his basketball team when he was in high school for God’s sakes. I mean, think about that and what he was able to overcome with hard work and effort. And if anybody has watched that, that series that came out on Netflix earlier this year about the last dance for the bowls it was, it was fascinating. And one of the things that came across to me was how hard he works. And I have to admit, I admire, you know, your work ethic and everything. You’re trying to teach people. That’s a that’s admirable. And I, I applaud you for doing that.

Tim (42:41):

Thanks. I mean, it’s, it’s good to have a chip on your shoulder, right? So like, you know, Tom Brady, I mean, he became the greatest quarterback of all time. He was picked 190 ninths in the draft, and he still mentions like that was like, you know, a chip on his shoulder where teams thought that there were 198 other better players than him. And that really motivated him, you know, Michael Jordan. Like if you, if you made a bad joke against him, and you know, and he would be, he would take that seriously. And he would use that as fuel. You need to reach down deep and get whatever fuel you can to really see what you can accomplish because it’s just not natural to want something so bad. It’s not natural to like work for something at midnight or 1:00 AM or 2:00 AM or 3:00 AM. I was a tennis player before getting into trading.

Tim (43:23):

I was the number one player in the state. I had a chance to go to nationals. I actually overworked that I probably caused my own injury because I wanted it too bad. But I was not captain of my tennis team. My number two player was captain because everyone saw that I was insane. Like we played in New Haven, Connecticut. And there’s the Yale bowl, which is a giant football stadium. And I would run up and down the whole football stadium once or twice every single day. And they knew that if I was captain, I would make the whole team do it too. And so they specifically did not vote me as captain. And I was so bitter, like literally when they were about to announce captainship, everyone was at like a team meeting. We’re all sitting down, and the coach was like, we’re going to announce the captain now.

Tim (44:04):

And he’s no stranger. And I started to get up, and I was not the captain. And I remember that moment where it was like the ultimate betrayal, but, you know, frankly, they were right. Like I would have, I would have been like the worst hap than ever. I would have made them all work. We probably all would’ve gotten injured. So they made the right decision. But I remember that, and that made me, you know, that really kind of motivated me to be a better trader and a better leader. You know, I don’t necessarily want to have, you know, someone who’s worse than I be voted like more popular than me like that, that really hurt. And I remember that I mean, this was a what, 1998. I mean, this is over 20 plus years ago. And I still remember that moment where there was a moment where the coach said in our next captain is, and I actually started to get up. And I was like, that was like one of the worst betrayals ever. I was, I was so hurt by that. And that really motivates you. So anytime you have a mistake, or you have hurt, utilize it, don’t block it, don’t ignore it. You know, cherish it and, and really use it to make you better at whatever you love.

Andrew (45:11):

Yeah. That’s fantastic advice and definitely something that everybody should pay attention to. So on that note, if listeners are interested in what you do how to learn more about you, what would be the best place to go?

Tim (45:24):

Yeah, go to a Just Google Timothy sites. I’m on Twitter, Yahoo, YouTube, Facebook, Instagram. I still need to get on Tik TOK, but I just haven’t had time to do that. You know, I filmed a few dances. I just, I haven’t, I haven’t posted that yet. But like, you know, I’m all over the place, and I love sharing everything. I mean, on Timothy, there are over 3000 blog posts on my YouTube channel. There are nearly 2000 video lessons. So I love sharing everything good, bad in between. It’s okay. Like if your wife or husband messages me and is like, yo, you’re, you know, my, my husband is like listening to you more than, than I am. Like, it’s like, I get some messages from some crazy students where their wives or husbands are angry because they’re spending more time with me, but I’m trying to help people. And, and it’s, it’s a good thing to listen to what I have to say. I’m not right all the time. But again, I’m trying to share all the lessons.

Dave (46:21):

Yeah. Learning is key, and it’s great that you’re sharing that. So thanks for your time, Timothy. We enjoy our conversation and, you know, best of luck with your trading and everything. My pleasure. Thanks, guys. Stay safe. Yeah, you too. Thank you very much, Timothy. This was awesome. All right, folks. Well, that is going to wrap up our conversation for this evening. I want to take a moment to thank Tim for coming on and joining us this evening. That was fantastic. I learned a ton about day trading in penny stocks, and it is far more disciplined than I originally thought. So kudos to Tim and everything that he’s trying to teach people. So without any further ado, I’m going to go ahead and sign us off. You guys, go out there and invest with a margin of safety emphasis on the safety. Have a great week, and we’ll talk to you all next week.

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