Eyes on the Prize
(This is Part 5 of the Great Expectations Series for traders. Be sure to read Parts 1-4 from the main Great Expectations Series page!)
What good is having a road map if you aren’t quite sure which direction to travel? Goals are underrated benchmarks which are entirely created by you. They’re the destinations you’ll be traveling toward on your road to profitability, so let’s jump right in and see how to blend them with your trading expectations.
It’s been said that “if you can see it and you can believe it, then you can achieve it.” In my own experience with trading, sports, or any other endeavor, I know this is true. There’s absolutely no substitute for having a target to aim at. While it’s good to keep your nose to the grindstone and have a trading routine, you’ve got to be able to look up and measure your progress. Knowing where you’ve been is only half of the equation…..you absolutely HAVE to know where you’re headed.
Knowing what you’re aiming for is important for 2 reasons. First, you’ll know when you hit it (at which point in time you can create new goals). Second, you’ll know when you’ve gotten off course and it’s time to adjust.
We know that good habits produce good results, so first get into the habit of setting goals for yourself! Once you start to set some trading goals, consider the following checklist:
Make your goals realistic, but stretch yourself. The idea is to create attainable goals that really require effort and growth in order to reach them. Get outside of your comfort zone a little bit!
Be willing to adjust your goals when necessary, because at times your luck will change or the market conditions change and some flexibility will be required.
Set emotional goals and rules for yourself. If you find yourself breaking the rules, step away temporarily and come back with a clear head and renewed focus. A commitment to leveling out the highs and lows that come with trading will go a long way toward your success as a trader.
Monitor your progress. Checking your account balance daily may not be the most accurate way to measure your progress, but weekly and monthly reviews are a necessity. Evaluate your total P&L, your win/loss rate, your average winner and loser, and whether or not you’re overtrading or undertrading. Remember, making small adjustments when justified will keep you motivated and focused from day to day.
Finally, I’d be leaving out the most important part of goal-setting if I stopped here. Dreaming up goals you want to achieve is always nice, but putting pen to paper takes it to another level. Writing out goals and signing your name to it is sort of like entering a contract with yourself. Take the time to ink your plans, and then PUT THEM WHERE YOU WILL SEE THEM REGULARLY. If they’re on the bathroom mirror, fine. If they’re taped to your monitor, all the better. The constant reminder of where you want to go not only keeps you on track, but it strengthens your belief that you’ll get there.
You’ve put far too much work into your trading to not have some direction! Set those goals for yourself. Stretch your limits, and elevate your performance!
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Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
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