With New Year’s rapidly approaching, most of us will take the time to review 2005 and make at least a mental list of what we’d like to accomplish in 2006. It might be your waistline that you choose to focus on, but if it’s trading, here are 5 ideas for making them happen.
Be realistic. When setting goals for anything, it’s important to be realistic. You want to set the bar high enough that you’re challenged to meet them, but not so high that they seem unattainable. Setting reasonable goals will keep you motivated and won’t have you feeling “behind” if you don’t meet your objective. If you’re trading with a $10,000 account, it would be unrealistic to expect to make $100,000 by the end of the year if you’re only trading stocks.
Measure your progress. Periodically measuring your progress will keep you on your toes to alert you of possible needs to adapt your strategy. You may want to do a weekly review of your progress, with more intensive check-ups monthly and quarterly. A day-to-day approach would likely be looking too closely under the microscope, causing your stress level to fluctuate more than your account balance.
Consider both process and results. Striking a blend between process-related and results-related goals will help you determine your goal AND a way to get there. Process goals may include a commitment to finding chart patterns each night for the following day’s session, or monitoring your win/loss percentage. Result-based goals would include the profit you expect to make each month, or a percentage return you hope to post by the end of 2006. Think of your results goals as destinations, with process goals being the road maps to get there.
Be willing to revise your goals. As time progresses, your goals may need adjustment. If you prefer short selling and the market is strong, then you’ll need to adjust your expectations. If you prefer the long side and sentiment shifts, it may require that you make a change to your trading strategy or your goals. On the other hand, a fast start might mean that this is finally your year and you are poised for greatness. Embrace that success and expect more from your trading than you had initially planned.
Finally, write down your goals. Just like the way mental stops tend to get blown, an unwritten goal can easily be forgotten. A written goal can be like a binding contract, motivating you to uphold your commitment. Place your goals where you’ll see them frequently, and it will greatly increase your odds of reaching the goals you’ve set.
I hope that 2006 is a breakthrough year for you in every aspect of your life – including trading! Sign up for your free trial to our stock newsletter and see if you aren’t closer to reaching your goals in 2006!
President, The Stock Bandit, Inc.