I wake up at 7:00am in the morning, and I rarely expect to learn a new lesson in day trading before heading to the office. This morning, however, was different. I often join my kids in the living room watching Sesame Street, and, today, while sitting on the couch with my coffee trying to wake up, I was greeted with a bit of wisdom that all day traders should keep in mind: a lesson about the value of practice and persistence.



On the show, a young boy was trying to learn how to skate, but after 2-3 faltering strides, he falls down. Instead of crying or giving up, the boy maintains a positive attitude and says, "Practicing tomorrow I'll be better than today." The next day, he manages to take 3-4 strides before falling down, saying once again: "Practicing tomorrow I'll be better than today." The boy practices every day, and each day he manages to take a few more steps. Finally, one day he stays on his feet the enter time, and even shows off a bit, proving that he can skate like a seasoned professional. At the end of this small episode, he looks in the camera and tells my children and me: "See? Don't give up too easily. There are some things you need to practice before you can do them. Practice every day and you will get better every day."

While the simplicity of this lesson suggests that it is only for children, too many day traders prove through their actions that they need to hear it as well. Many traders, and not just beginners, give up too easily. They start trading, but after only a few losses in a row, they give up, looking for another strategy. They fall for the old paradigm which says that "If you don't make money immediately, change the strategy." As I've said many times before, if you don't give your trading strategy enough time to work, you won't know whether the problem is in the strategy itself, in a market slump, or simply bad luck. The key to successful day trading is in maintaining a consistent plan, and abandoning a plan too quickly will never teach you anything. You won't know whether the plan is really designed for the long rather than the short term, whether the problem was in your entry or exit strategy, or any other details that can help you revise how you trade.

The child who continued to practice skating never quit after only a few tries. He never thought that he couldn't skate simply because he didn't immediately master the skill. Rather, he knew that he would have to fail a number of times before he could recognize and adjust what he was doing wrong.

Traders who find themselves giving up on their strategies very quickly, or who are constantly changing strategies looking for one that works on the first or second try, need to remember this young boy. He should remind us of two things that, as day traders, we should never forget:

1.Practice!

Don't jump with both feet into the water. Backtest your strategies. Practice on a paper trading account. Start small and trade with one contract first. The boy would never have succeeded if he tried to skate like a champion on his first try.

2.Don't give up too easily!

Losses are part of our business. Don't expect to make millions in your first week of trading. "Practicing tomorrow I will be better than today." Learn from your successes and learn from your mistakes, and pledge to become a better trader every day. The boy knew that a failure today could turn into more success tomorrow, and he reminded himself of that each time he had a setback.

Sesame Street may not offer you the most timely stock tips, but it can definitely teach you how not to sabotage yourself and your strategies by abandoning them too early or expecting success too quickly.