Trading can feel quite daunting for newcomers because of how hard it seems. The truth is that trading is hard, but it’s hard because trading can be lucrative, and you can earn substantially, but only if you trade right.

In this episode of the Making Bank podcast, we welcome a guest Timothy Sykes back to the Making Bank Podcast. Timothy was once an aspiring pro tennis player, but after sustaining an elbow injury, he eliminated all chances of going pro. Since then, Timothy has focused on making money through trading in the stock market. Today, Tim Sykes is a penny stock trader, entrepreneur, and teacher who became a self-made millionaire by age 22. He started out by trading $12,000 that he had saved up from his Bar Mitzvah. Now Timothy has been able to make over 7 million dollars through trading. After becoming disenchanted with the hedge fund world, he established the Tim Sykes trading challenge to teach aspiring traders how to follow his trading methods and make money doing it. He has been featured in various media outlets, including CNN, Larry King, Steve Harvey, Forbes, the men’s journal, and many more. Timothy is also an active philanthropist and environmental activist and has donated millions of dollars because he wanted to give back and start impacting people’s lives more positively.

On the podcast, Timothy talks about what it takes to be a successful trader and dives into the most common mistakes that most people make when they start trading. He also gives many tips to help you become a better trader as well as tips to help you improve your life and become a better overall human being. Here is some of the best advice from Timothy Sykes:

Cut Losses Quickly

Tim’s first rule of trading is that you should always cut your losses as soon as possible. Don’t be afraid to get out if you go down in a trade. Many people choose to stay and lose so much more than they would have if they had just cut their losses early. Don’t be scared of missing out on a potentially lucrative trade because the best part of choosing to cut your losses when you trade is that you can always buy back in if you made the wrong decision. 

Never Go All-In

We’ve all heard the saying — “Don’t put all your eggs in one basket.” However, no matter how many times it’s been said, people still make the mistake of going all-in on a trade. No matter how good the trade looks, never put your all into one investment. People sometimes fall in love with the idea or theme of the trade they’re investing in and get aggressive with their investments. Be conservative and stay smart about your investments. At some point, you’re going to lose money on a trade, so the worst thing you could do is lose all your money from just a single investment.

Prioritize Studying

Trading is a game of planning and preparation. Most people don’t bother putting in enough time to study and prepare themselves. The people who have managed to make millions from trading have only made that much after studying the market. Don’t worry about missing out on any great trades in the current market. Trading isn’t an exact science, but there are patterns that you can study, and history often repeats itself. That’s why studying allows you to be prepared and make better plays when the opportunity arises.

Don’t Follow The Crowd

There’s always going to be something trending in the market, so it’s important not to make the mistake of hopping on the bandwagon just because everyone else is. At the end of the day, trading isn’t a team sport because the gains you make are on an individual level. That’s why studying and preparation are so important. Instead of falling in with the rest of the crowd, you can make calculated decisions of your own and invest in something you believe will be lucrative.

Appreciate Your Losses

As we mentioned earlier, you’re going to lose on an investment at some point. That’s the reality for 90% of all traders, you will fail, and on occasion, you lose big. The most important thing to focus on in trading isn’t to try and not lose big. Instead, you should learn how to appreciate your big losses. No matter how significant your loss, you can always learn from it. Treat every loss as a lesson — learn what not to do, remember how terrible you felt after losing, and use those lessons to improve next time.

Have A Big Goal

One of the most common things we do is that we only plan for the short term. Many people think they can get by just preparing for a year. A year feels like a long time, but why would you only want to have one good year? Plan in such a way that the next five years of your life will be your best years. Have a big goal, and you’ll notice how much more effectively you’ll be performing. Focus on the big picture and put in the work every week to get one step closer to achieving your goal.

Be Real

Finally, the best thing you can do for yourself is to be real Most of us have nothing to hide, and we should live that way. People always get caught up in portraying a perfect version of themselves. The reality is that none of us are perfect, so don’t be fake and be the most authentic version of yourself in every aspect of your life.