Comments on: Why I Paid Timothy Sykes $2,000

By: Update on trading like Tim Sykes: $101,000 in profits « Reaper Trades

Update on trading like Tim Sykes: $101,000 in profits « Reaper Trades — Wed, 11 Nov 2009 16:47:29 +0000

[...] with his performance. Before I bought his book and DVD and subscribed to his TimAlerts (I am now a lifetime subscriber), I first read every single one of his previous blog posts and I examined every single of his [...]

By: Michael Goode

Michael Goode — Wed, 09 Sep 2009 17:49:15 +0000

Patrick – once you get over $8,000 or so your potential % returns drop significantly because a lot of true crap will never be shortable with more than a few thousand dollars. That is stuff like GFGU where Tim Sykes just made 40% on 1000 shares of GFGU in one day. That was only about a $400 or so profit.

But there are plenty of cases where the is a decent amount of liquidity. I have no problem throwing around $50k or so per trade a couple times a week on TimAlerts. In RTK or VG a trader could have easily had a $1,000,000 position and made over 10% on the trades.

So while % returns will degrade as account size gets larger, you can still generate meaningfully large returns. Over the last year I have made around $65k trading using Tim Sykes’ system (it is $85k since I first started in June 2008), which is over a 13% return on my $500k account (actually it has often been lower than that). And because the trades are generally small or very short-term I have virtually my entire account available to trade using other strategies (or invest long-term) and have the time to pursue other trading strategies. And my returns are far from ideal … I keep my position size small most of the time for psychological reasons, not for any substantive reason.

Anyway, I would say that it is hard to consistently use more than $50k trading Sykes-type plays, so a $200k account is more than adequate to generate large dollar profits. There are probably only a couple trades per month where a trader can use more than $100k comfortably in a Sykes-type stock trade.

BTW, I encourage you to visit my new trading blog, http://www.reapertrades.com

By: patrick

patrick — Tue, 08 Sep 2009 21:00:20 +0000

Sorry what i meant to say after 30,000 your % gains will start decreasing not increasing.

By: patrick

patrick — Tue, 08 Sep 2009 20:58:04 +0000

Thanks Michael. But it is hard to make a living with this system with big accounts . My guess is once you go over 30,000 or so your % gains will start increasing. What do you think about my estimate. Do you agree? If not than after which amount do you think gains will start declining as a percentage of the initial capital?

Patrick

By: Michael Goode

Michael Goode — Tue, 01 Sep 2009 02:29:44 +0000

Patrick – one of the aspects of Tim’s system is that properly implemented, it will not arbitrage itself away. Because he doesn’t believe in shorting supernovae (such as VG recently, up from .50 to 2.00 in a few days) until they start to fall, his system will not eliminate its profit opportunities. The one thing that will suffer is availability of shortable shares. But I still see plenty of shorting opportunities available. And buying stocks on breakouts is also something that would not be arbitraged away. Look at HLCS today — it jumped from 1.80 to over 3.00 intra-day. This was simply a technical breakout above an important resistance level. With such breakouts, more people playing them means more liquidity and bigger moves. So it is not as simple as more traders meaning fewer opportunities.

By: patrick

patrick — Mon, 31 Aug 2009 19:57:43 +0000

Michael,

thank you for the article. but even though you changed your mind about tim’s system there is a very valid point that we can’t ignore: when everyone follow a system this system WILL stop working and in this case it is even more true because TIM’S system deals with illiquid stocks. So why do you think it is worth it to start learning this system now?

By: The truth about Tim Sykes from a former critic « Reaper Trades

The truth about Tim Sykes from a former critic « Reaper Trades — Tue, 18 Aug 2009 14:28:40 +0000

[...] September of 2008 I wrote Why I paid Tim Sykes $2000: I previously wrote about Timothy Sykes and his attempts to teach stock trading to the masses. That [...]

By: What to expect on this blog « Reaper Trades

What to expect on this blog « Reaper Trades — Mon, 27 Jul 2009 14:22:26 +0000

[...] encouraged me to start a Reaper Alerts service much like Tim Sykes’ TimAlerts (of which I am a lifetime member). I do not rule out offering such a service in the future, but for the time being protecting my [...]

By: Goode Value Investing & Trading Blog » Changes to this blog

Goode Value Investing & Trading Blog » Changes to this blog — Mon, 27 Jul 2009 14:06:53 +0000

[...] me to start a Reaper Alerts service much like Tim Sykes’ TimAlerts (of which I am a lifetime member). I do not rule out offering such a service in the future, but for the time being protecting my [...]

By: Michael Goode

Michael Goode — Thu, 28 May 2009 17:45:04 +0000

I should add that a trader should never anticipate a certain profit level; trading is too unpredictable for that. So no one should plan to live off of the proceeds of trading unless they are very good and experienced. I don’t even live off the copious proceeds of my trading; my wife’s job pays for all our expenses and some of our saving. All my earnings go straight to savings. That takes a lot of pressure off me, and that really helps my trading, knowing that I don’t have to make money this week or this month to be able to live the life to which I am accustomed.