Setting Trading Goals

By | January 16, 2015

Setting a goal and planning how to achieve it can help traders push past their fears. Setting up goals will make sure traderĀ  learns from his mistakes. Trader will study both winning and losing trades to understand what went right and how he could improve on his technique. Over time, trader will be able to improve his trading, adapt his technique, and refine his trading setups. Trader will discover new setups, new methods, and new ideas that will propel him on his journey to his goal.

I know that when I set a goal, I spend more time on a project and accomplish more during that time. I am more productive.

 

Just setting a financial goal is not enough. You have to figure out how to achieve it. Here are some ideas.

  • Set a realistic goal in financial terms.
  • Break down the goal into manageable limits . You cannot double your money in one trade, in one hour, but you can double your money in x trades over y months.
  • Look for flaws in your existing trading strategy. Are you consistently entering a trade too early or too late, or exiting in an untimely manner?
  • Would setting a price target instead of waiting for a trend change (or other exit signal) increase profits? You may find that for short-term trades, a profit target (such as, “If price hits xxx level, I will sell”) works better.
  • Follow your trading plan: Plan your trade and trade your plan.
  • Experiment with different position sizing to maximize profits while keeping risk in check.
  • Are you trading the right stocks? You may do better by selecting more or less volatile stocks.
  • Take a more proactive approach to your trading. Move any conceptual work into the experimental stage and allow yourself to break barriers of fear or habit. In other words, push your comfort zone to help achieve better results. This may mean taking a larger position than your normally would or setting a stop farther away, but more closely monitoring the trade.
  • Keep your goals in mind and do not allow emotions or habits to interfere with or somehow limit achieving those goals.
  • Mistakes are made and stress increases when a trade begins turning into a loss, so that is when you need to focus on your objectives. Look at each losing position as an opportunity to test yourself and your skills. Use those losses to hone your ability to channel emotional energy to trade better.
  • Learn to accept risk and discard any concerns or fears that might impair your trading.
  • When looking at past trades, ask yourself what is limiting your ability to make more money?
  • Find a trading partner that compliments your skills. If you lack trading setups but know when to exit a trade, perhaps another trader has setups to share but needs help with pulling the trigger. Combining your skills may benefit both traders.
  • Develop habits that help you overcome your liabilities. Learn not to trade when you are upset or when the market tells you to stop trading .Learn to walk away when you are doing well.
  • Learn to trade not for the excitement it brings, but for the skill it demands when trading well.

 

3 thoughts on “Setting Trading Goals

  1. Bramesh Post author

    Did you make 2-5% a month consistently, What ur are thinking is highly unrealistic goal

    First protect your capital and than made 2-5% consistently.

  2. Madhav

    Can we achieve 20% return on monthly basis in option?Do you think it is a realistic goal?If not what what would be a realistic goal on monthly or weekly basis?
    I appreciate your reply. Thank you

  3. GK

    Well said Ramesh, I am 100% sure, that the 90% of the people who are losing money have all the traits that you mentioned above (me included :)). Thanks for continuing to spread such good awareness to all, much appreciated.

    Warm Regards
    Gopalakrishnan

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