When you start out in the world of trading, we’re all taught the key principles you must abide by.
The one key principle that keeps on cropping up, and always will for that matter, is the importance of setting goals. Without goals, it’s very difficult to put together any sort of trading strategy.
At the same time, it’s also very difficult to put together these goals in the first place. While it would be far too specific to drill down into specific goals for your own strategy, today’s guide is instead going to look at some of the key rules to keep in mind as you put together your goals.
It’s All About The Process
Sure you have entered this business to make money, but that doesn’t mean your goals have to align with your final profits.
Like it or not, these are metrics that are truly out of your control. You can do the perfect trade, but still lose money. This might happen through a market unexpectedly crashing, or a company revealing that their accounts are actually completely misleading (it has happened, as we all know).
It means that in terms of goal setting, you need to turn to processes. It has become so easy to obtain a demo account of popular trading software that there’s no excuse for not developing processes. Perhaps frustratingly, this can mean that results aren’t instant, but if you can base your goals around them you are at least confident that you are following a strategy and aren’t just hopping around between approaches (which commonly happens).
Simplicity Will Always be a Winner
As we all know, trading is anything but simple. It’s an utterly complex beast but when it comes to goal setting, you need to keep things as simple as can be.
For some of you, this might mean focusing on just one type of market. For example, if stocks are your thing, stick with them. Or, if you’re more of a currency type of person, it goes without saying that FOREX is your answer.
The point we’re trying to make is that you shouldn’t try and mix things up and come up with complicated formulas. Keep your goals simple, and everything will be much easier to manage.
Don’t Base Your Goals Around Your Number of Trades
This final point might be the most difficult for some of you to pull off. After all, you are entering the trading game to make money, when you’re not trading you might not be doing that.
However, there will be times where it’s best to hold tight, and not trade. If one of your goals is to make ‘x’ trades per day, this naturally isn’t going to happen.
A goal is meant to discipline you. Sure, you might not be making money, but in precarious times you also won’t be losing any.