Being a good trader is not only about knowing how to work and when to enter or exit trades. You can be a trend-analyzing genius; you may even be able to predict every single step an asset’s value will take. However, if you don’t have a realistic set of goals established, we’re you won’t get very far. Being able to set your goals is as important (and, sometimes, as difficult) as trading itself. When setting up goals, you must keep in mind a lot of things like how experienced you are, how much starting capital you have, and how much time you can dedicate to trading and studying.
It’s something that you can’t take lightly; doing so can cost your entire trading career.
As such, to help you set up the best goals for trading, we’ve brought to you this comprehensive list of things to take into consideration:
- How Much Experience Do You Have?
It’s important to take note of your experience. You can’t set yourself to make a million in a month if you haven’t traded before. Similarly, if you’ve been trading your entire life, making enough to maintain a hobby won’t be a very exciting nor fulfilling goal.
- How Much Are You Willing To Invest?
While keeping in mind the golden rule of “never invest more than what you’re willing to lose”, it’s still important to acknowledge that you need money to make money trading. It’s kind of like with experience. If you invest $5 initially, you can’t expect to turn that into $10,000,000 on your first week.
- How Many Hours A Day Can You Put Into It?
Trading requires you to stay on the lookout for changing trends and events that might trigger said alterations. Additionally, studying graphs and tracking different assets is not an easy task. How much you make is tied to how much you dedicate to your job, no matter which job it is.
- How Much Do You Know About Trading?
Trading requires you to know about indicators, tools, markets, shares, assets, and even politics! If you don’t have a comprehensible glossary on trading terms and relevant factors, you will spend most of the time gambling. Because of that, don’t set yourself to trade on something you don’t understand. Or, even better, you can make learning new things one of your goals.
- How Much Are You Willing To Study?
As we mentioned earlier, you need to understand the market you’re getting into. The amount of time you’re willing to dedicate to trading must be divided into actively trading and studying. That is because, every day, you have new political events, products, new laws being passed, and those cryptothingys that everyone is talking about. Too many things that will affect how much you make, you must take your time to understand most (if not all) of them.
- What Are Your Strengths and Weaknesses?
You have a personality, and that personality will affect how you work. You must be realistic about how disciplined you are or how’s your willingness to go through with all your goals. There is no point in setting yourself to be the best trader in 2018 if you become annoyed and give up three weeks into the task. We’re not saying that you can’t set specific goals, but keep in mind how willing you are to complete them.
- Focus On The Outcome Or Focus On The Process?
As mentioned here, your experience will help dictate what your focus should be. When it comes to setting up goals, you can focus on the outcome; that is how much money you want to make in a week. Experienced traders can do that because they already know what must be done to obtain a result. Less experienced traders will benefit more from focusing on perfecting their practices.
- Money Isn’t Everything. Not Even In Trading.
You can’t say making money is the only goal you have. As DailyFX points out, your focus shouldn’t be only on how much you make; there are also many processes and strategies that must be constantly revised. Additionally, setting up specific monetary goals will cause frustration in the event they aren’t achieved.
- You Can’t Come Back Without Correcting Your Practices.
As we mentioned earlier, you can’t focus only on the outcome. If you’re experiencing a losing streak, it can be easy to set yourself to make more money by taking more trades or investing more. That is often wrong. If you’re losing money, there’s a reason behind it, a reason you must revise.
- Be Realistic.
Ultimately, your goals should be achievable. That’s what we’re trying to say here. It’s fun to go to fantasy land and imagine yourself becoming a millionaire, but doing so won’t make it true. It’s good to set your bar high, but you’ll need lower bars before you get there.