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Goal Setting for Traders

Having a Trading Plan and Goals
Written by Andy

Setting formal goals is a wonderfully effective means of achieving what you want to achieve. Goals are your road map, giving you direction, enthusiasm and motivation.

You have to plan to become what you want to become

Setting goals is a process to help you to achieve your dreams. Goals turn your vision of the future into reality.By setting clearly defined goals you can follow your progress towards achieving your dream, it keeps you motivated and on track.

Some of the areas we will cover in this discussion are;

  • Setting lifetime goals
  • Setting intermediate goals
  • Setting week to week, day to day goals

We will break these areas down to simple, achievable steps and follow the progress along the way. We will help you to stay on course, reviewing your progress and, if necessary, fine tune your roadmap to success.

Let us have a look at your life time goals first. Do you know where you want to go? Do you know what you want to achieve?

Give it some serious thought. Most of us don’t really know what we want to achieve during our life time. Find direction and live your life your way. Would you go on a long trip in your car without a map? I don’t think so.

Goal setting is a powerful process for thinking about your ideal futureas well as for motivating yourself to turn this vision of the future into reality.

One of the most important things you can do is to set a daily, weekly, and monthly goal for yourself.

The process of setting goals helps you choose where you want to go in life. By knowing precisely what you want to achieve, you know where you have to concentrate your efforts. You will also quickly spot the distractions that would otherwise distract you from your course.

More than this, properly set goals can be very motivating and as you get into the habit of setting and achieving goals, you will find that your self-confidence builds fast.

Goals are set on a number of different levels: First you create your big picture of what you want to do with your life, and what goals you want to achieve. Then you break these major goals down into the smaller and smaller targets that you must hit so that you reach your lifetime goals. Finally, once you have your plan, you start working to achieve it.

Of course there is no reason why you can not start with a small, short term goal if you plan to achieve something within a few days or weeks. Don’t gewt bogged down by only looking at the big picture.

People perform at their best when they have a goal clearly in their mind. That is the way the human mind works. When we have a goal clearly in our minds, our subconscious works very hard at helping us to achieve that goal. It does it automatically without having to fight using willpower.

You may have a goal clearly in mind, but it must have three important characteristics.

  • Your goal must be realistic
  • Your goal must be attainable
  • Your goal must be measurable

Your goal must be realistic. This means that your goal has to be something that is within your capabilities. Sure, it may be possible to make a million dollars your first year trading, but it’s probably not very realistic because it isn’t within your capabilities yet.

Your goal must be attainable. An example might be that you are trying to average $100 to $200 a day with your trading. You have a much better chance of being able to reach that goal versus the goal to make a million dollars this year. You must start with a goal that is attainable and then you can build on it. I highly suggest starting with a small goal and moving up from there.

Your goal must be measurable. This is one area where I see people making a mistake all the time. Everybody wants to get rich or make a fortune in the market. That seems to be everybody’s goal. But that isn’t really a goal. A goal must be measurable. You must be able to know when you’re far away, close, and when you have achieved your particular goal. If it’s not measurable, you will not know when you are there, and even worse, you won’t know how close you are to reaching your goal.
Realistic, measurable goal-setting is extremely important to being successful in trading. In fact, just trying to make money each day (without a goal) will most likely not work.

So please do your self a favour as a trader, set your goals, keep them firmly in your mind, look at them each morning, measure them each day and you will become more successful.

Trading without a goal and a trading plan is a road to failure.

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