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Hi all I've just written article about goal setting in trading. Setting goals in trading can be extremely dangerous if done incorrectly, by focusing our attention on the tangibles, the things we can influence and change we can make progress in the right direction. Targeting a set amount of dollars to makes every day is a sure fire way of blowing up your account since your focus turns from what you should be doing to trading your PnL. Here's the article:
The New Year is traditionally the time when resolutions and targets for the coming year are made and goals for the previous are assessed. It’s a great time to ask questions of yourself as to why some of your goals weren’t achieved and importantly what you did to achieve the goals you reached and whether you can replicate that success.
Goal setting or making resolutions isn’t something that should be limited to 1st January; it’s a constant process throughout the year. It’s a continual assessment of where you are and where you want to go and what you need to do to get there.
Nor is goal setting something that should be limited to those at the very top whether in business, sport or other endeavours like trading. The point is that those who have achieved and continue to achieve in which ever field have goal setting as a common trait.
Setting goals in trading can be like playing with fire so be sure to set the right type of goals. Whether you’re a beginner or a trader with a 3 or 4 years plus under your belt, you will know that profits from trading are, at best, inconsistent. Having a goal which states that you want to make $500 per day from intra-day trading from your $10,000 account is both unrealistic and will force you to overleveraged yourself to earn the money you’re hoping for.
It’s fine to have a “soft” target of X number of points per day/week (note that it’s points not a $ figure) but it’s far better to set yourself hard targets you can actually achieve which have nothing to do with your quality as a trader. For example, making sure your journal is completed by a certain time every day; Although I guess completing a journal in the first place is something many don’t even do. Consider also making sure your Excel spreadsheet of your results is filled in everyday (excluding commissions) and the corresponding equity curve is completed. Furthermore, your pre market analysis is exactly that, done before the market not on the fly after the bell has rung. Being seated with the relevant numbers before the market would be the goal here. Other goals that can be focused on could be limiting the hours and the markets you trade.
All in all these are all things you can do NOW irrespective of whether you’re a great trader with huge profits or not. The irony is by focusing on these tangibles, the things we can influence directly now are the things which contribute to making ourselves great traders.
These are things successful traders do out of habit, they’re not conscious of doing them but they’re vital for the profits they see. The modelling of our actions these traders may be a technique borrowed from neuro linguistic programming but it’s a highly effective means to the end you desire which is of course consistent profits. By being conscious of the things one can influence, the profits will follow.
Good trading all in 2010
Tim
The New Year is traditionally the time when resolutions and targets for the coming year are made and goals for the previous are assessed. It’s a great time to ask questions of yourself as to why some of your goals weren’t achieved and importantly what you did to achieve the goals you reached and whether you can replicate that success.
Goal setting or making resolutions isn’t something that should be limited to 1st January; it’s a constant process throughout the year. It’s a continual assessment of where you are and where you want to go and what you need to do to get there.
Nor is goal setting something that should be limited to those at the very top whether in business, sport or other endeavours like trading. The point is that those who have achieved and continue to achieve in which ever field have goal setting as a common trait.
Setting goals in trading can be like playing with fire so be sure to set the right type of goals. Whether you’re a beginner or a trader with a 3 or 4 years plus under your belt, you will know that profits from trading are, at best, inconsistent. Having a goal which states that you want to make $500 per day from intra-day trading from your $10,000 account is both unrealistic and will force you to overleveraged yourself to earn the money you’re hoping for.
It’s fine to have a “soft” target of X number of points per day/week (note that it’s points not a $ figure) but it’s far better to set yourself hard targets you can actually achieve which have nothing to do with your quality as a trader. For example, making sure your journal is completed by a certain time every day; Although I guess completing a journal in the first place is something many don’t even do. Consider also making sure your Excel spreadsheet of your results is filled in everyday (excluding commissions) and the corresponding equity curve is completed. Furthermore, your pre market analysis is exactly that, done before the market not on the fly after the bell has rung. Being seated with the relevant numbers before the market would be the goal here. Other goals that can be focused on could be limiting the hours and the markets you trade.
All in all these are all things you can do NOW irrespective of whether you’re a great trader with huge profits or not. The irony is by focusing on these tangibles, the things we can influence directly now are the things which contribute to making ourselves great traders.
These are things successful traders do out of habit, they’re not conscious of doing them but they’re vital for the profits they see. The modelling of our actions these traders may be a technique borrowed from neuro linguistic programming but it’s a highly effective means to the end you desire which is of course consistent profits. By being conscious of the things one can influence, the profits will follow.
Good trading all in 2010
Tim
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