Timothy Sykes has garnered a fair amount of press for his unorthodox trading methodology. As with any ‘disruptive’ force in an otherwise entrenched, rules-based industry, some of the coverage has been positive, some negative. In an attempt to get to the truth, we cut through the hype and focused on the facts. Who is Timothy Sykes? What makes his trading methodology so different to other traders? Is he a scam? These are the kinds of questions that traders want answers to. Our investigative analysis is designed to provide fair and balanced commentary to help you draw your own conclusions.
His passion for trading began in high school. He took his bar mitzvah money of $12,415 and successfully transformed it into over $1.65 million by employing a calculated series of tactics and strategies, focusing primarily on penny stocks. Timothy Sykes explains that penny stocks (equities trading under $5 per unit) offer opportunities to novice traders, given that they are many ways to tap into this potentially rich pool of trading and investing activity. The Timothy Sykes approach ostensibly provides an education to individuals intent on profiting from the penny stocks arena. There are substantial differences between penny stocks and traditional stocks, notably the cost considerations. Penny stocks can be the ideal trading option for amateurs and casual traders, given that the outlay is low. But that’s not enough of a reason to get invested. We need to know more.
With a comparatively low capital outlay requirement, a carefully calculated investment in penny stocks can theoretically prevent the large capital losses that one could expect with high-end stocks. However, as Timothy Sykes points out [and we concur], investments in penny stocks are inherently volatile and there is a risk of capital loss in every trade. The objective therefore is to pick out the most viable penny stock options from a huge and growing list of contenders on the market. Sykes explains that linear thinking (buying low and selling high) is not required for profiting off penny stocks; stocks can be shorted on the market and profits generated by betting against penny stocks too. Shorting stocks is an area that most novice traders are blind about; conventional thinking is always geared towards appreciation, not depreciation for profit generation. To this end, he has created an investment program which he charges clients for.
Is the Timothy Sykes trading course worth the investment?
For many reviewers, the mere fact that a trading expert offers a premium package to teach traders what techniques, tactics, and strategies to employ sounds alarm bells. We decided to throw caution to the wind and give Timothy Sykes the benefit of the doubt as we reviewed his trading course to determine whether in fact there is any merit in it. The answer to this question is multifold. For starters, anyone who is genuinely interested in understanding the functionality of the financial markets, particularly the penny stocks arena will derive benefit from these behind-the-scenes insights. If nothing else, you will learn about one an interesting and actively traded stock market. It is a hive of activity with industry-specific jargon that has often eluded the public at large, making Wall Street investors – the suits – the only ones who benefit from this highly capitalised market. The mere fact that you can learn invaluable information about the inner-mechanics of the penny stocks arena is worth the cost of the program.
However, we are naturally skeptical so that’s not enough of a reason to buy a course. We want more; we want to know how someone can transform $12,415 into $1.65 million, just like Timothy Sykes did. Will everyone who takes this course be able to do that? No promises are made, and we like that. Your ability to internalise the specific rules of trading penny stocks, through a careful understanding of his methodology is one component of the process. It is absolutely imperative that you maintain focus on the goals at hand, by carefully watching the type of leverage and margin that you allow yourself in the trading arena. Remember, markets can turn on a dime, despite your best intentions and your most methodical planning. Nobody can ever predict with 100% accuracy the way a market is going to move – you will have some wins and you will have some losses. That’s the cornerstone upon which we evaluate all trading techniques and trading experts.
If your ‘win ratio’ exceeds your ‘loss ratio’, and the value of your winning trades exceeds the value of your losing trades, you are net positive and the system works. The theory is sound. The techniques are sound. The market is beset with volatility which does not always correlate with conventional theoretical assumptions. Even if all factors point in one direction vis-a-vis a penny stock, an anomaly could throw that trade off course causing disruption to your investment portfolio. However, the overall trading methodology holds water and it is a sensible approach to adopt, given its all-encompassing nature and its user-friendly methodology. On the bright side, we are not dealing with a chancer; Timothy Sykes has put his money where his mouth is. He was featured across multiple media channels including ABC, CNN, Fox, Bloomberg, INC., Forbes, and the New York Times. Clearly there’s something there, and we want to know if his trading methodology is right for you.
Watch the Larry King interview for insights into the character of the man
We listened to an interview between Timothy Sykes and Larry King, and it’s worth sharing because it provides some insight into the character of the man and the veracity of his claims. Larry King, arguably the most accomplished talk-show host from CNN explained that Timothy Sykes made his first million dollars while he was in his college room dorm. In double-quick time, Sykes amassed a following of hundreds of thousands of people, and created a non-profit organisation known as the Timothy Sykes Foundation. He hails from a small town in Connecticut, from a middle-class family. He played tennis as a youngster, wanted to become a professional, but got injured and had to cut those dreams short for the time being. We infer from this that he is a determined individual, focused on winning.
He didn’t sit back and let fate drag him down, he got into trading while he was healing. This all took place around 1999 when the stock market was in a frenzy and about to experience a major disruption. His parents entrusted him with control of his bar mitzvah money, thinking he would lose it. It would be a good lesson for him to learn the hard way how valuable money is, they thought. By his senior year of high school, he transformed his bar mitzvah money into $100,000, increasing that to $1 million by college. Incidentally, it was his tennis prowess that got him into college, so clearly his multi-pronged approach to life indicates that he is as determined in the sports arena as he is in other facets of his life. Is this necessary for success as a trader? No, but determination speaks volumes about the character of a man and that’s important when you’re following someone’s techniques.
Timothy explains that there is justified concern about trading penny stocks, because there are many dodgy companies operating in this arena. Some of these developmental companies have zero growth, but they’ve been signed by major blue-chip companies like Apple, Microsoft, Facebook, et cetera. When they start growing, that’s when profits start growing too. The Timothy Sykes model is all about teaching traders how to spot these gems and profit off them. Sykes looks for the biggest percentage gainers in the Wall Street Journal. Unfortunately, you are unlikely to find much information about penny stocks in mainstream media channels and on trading sites. They are simply not the highlighted equities that you would expect to find. However, there is significant potential there if you know what you’re doing.
What Timothy Sykes does should technically benefit anyone who follows what he’s doing. If he profits from the movements in equities, followers can piggyback off his activities. He makes it clear that he is not a financial advisor and he is not a broker. He’s somebody who analyzes market activity and discovers trends or patterns and acts upon them. That’s a trading strategy worth exploring. It’s not for everyone, but it can work if you time your trades right and you manage your capital properly. To cut a long story short, there is a lot to be learned from Timothy Sykes.