| One of the biggest problems new traders have is that they think they will make a |
| large amount of money right away. They think they will get rich quick. This type |
| of reasoning is very similar to the short-term thinking in American business in |
| general, usually managing for the current quarter’s profits, focusing on short-term |
| earnings at the expense of long-term investment and profit growth. |
| TRADE FOR PROFITS OVER TIME |
| Traders tend to get wrapped up in current market conditions, the news of the day |
| and the current trade, usually at the expense of the big picture and profits over |
| time. My grandfather used to have a saying, “You can’t go broke taking profits.” |
| He was very wrong. You can go broke taking profits. If you take profits before |
| the market tells you to, or you succumb to fear and close out the trade before its |
| time, you are focusing on the short-term and forgetting how to make money over |
| the long haul. Close out no trade before its time. |
| GIVE YOUR TRADING STRATEGY ENOUGH TIME TO WORK |
| We tend to be impatient, and we sometimes think that we should get instant |
| gratification. This will not work in trading. The only way you will really know |
| whether you are a successful trader is to be successful over time. A week or a |
| month will not be enough time to tell you how you are doing. You should be |
| trading with the objective of making money in the long run, consistently, and with |
| the confidence that your strategy will make money given enough time. |
| One of the benefits of trading with a strategy is that having done the requisite |
| historical testing, you should know how long it should take you to start making |
| money. You should have an idea as to the length of time that the strategy has lost |
| money in the past, how much money it has lost, and how long it will take the |
| strategy to become profitable. If the strategy has proven profitable historically, it |
| should be profitable in the future. You just need to give it the necessary time to do |
| its work. |