December 30, 2010 at 11:10 am | | Comments 1

When Goals Impede Progress

Like it or not, it’s that time of year where goals enter the picture again.  This is of course a time for family, gifts and bowl games, but it’s also a time when each of us are compelled to take a look back and a look forward.

Reaching the finish line at the end of the year leads us to consider how things went, and most all of us know whether we exceeded or fell short of the goals we set a year ago.  In turn, we evaluate where we are and take a good hard look at where we want to be a year from now.

Goals have some excellent qualities and they serve a real purpose when used correctly.  They can make us think bigger and cause us to grow.  They can drive us to consistently work toward an objective, helping to bring purpose to our daily activities.  And goals can boost our confidence when we achieve them, helping us to realize that we’re capable of striving for higher levels.  Goals are great, and I’m a goal-setter.  I’ve discussed goals here numerous times over the years, but there’s one take on goals I’ve never before mentioned…

trading-goal-influenceGoals aren’t always good, and they can actually hold us back when they’re set in the wrong manner or approached in the wrong way.

What Bad ‘Goals’ Look Like

As an example, years ago I would periodically update the wallpaper on my PC’s desktop with a new dream car that I’d want to go after with my trading profits.  Inevitably, my trading would go almost instantly in the toilet!  The new ‘goal’ was a distraction to me from what I should have had my focus on, which was the market actionnot something I wanted to buy with my trading profits.  (Realizing this, I’ve since kept pictures of my family as my desktop wallpaper!)  My goals now involve processes I need to go through for good trading, rather than cars or destinations (duh).  First things first!

3 Ways Goals Can Stunt Growth:

1. If goals are too high, we sometimes force trades in an effort to reach them. Lofty goals are good, but they can’t lead you to take on outsized risks or overstep your bounds in terms of risk.  Set goals that will require growth on your part and get you outside your comfort zone, but which are still attainable for your style of trading, account size, and risk tolerance.

2. If goals aren’t practical, we may prematurely dismiss hope for achieving them. I’m not referring to quitting, I’m talking about not pushing oneself the right way.  Suppose you have a profit goal for the month and you’re down to the final week and miles away from your goal.  It’s easy to dismiss that goal and wait for the next month to come around, yet there’s opportunity you’d be missing out on now if you did that.  Grow your account every chance possible, even if you’re lagging on a goal.

3. If goals are distracting, they don’t help us. Like the car example above, my ‘goal’ was merely an aspiration and therefore not something that directed the focus of my trading.  Instead, it detracted from it, and took me farther from where I’d have been without it.  Make your goals process-oriented, and the results will take care of themselves.

Trade Like a Bandit!

Jeff White
Producer of The Bandit Broadcast

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  1. From Throw Yourself Into the Game Derek Hernquist on Feb 11, 2011

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