With the New Year upon us, this is the time of year that many of us take a bit of time to reflect on the past year's accomplishments, and renew our goals for the current trading year in order to strive for greater success. This week's article will cover some considerations to put into your plan as you develop your trading goals for 2017.
If you want to excel in your trading business, it's important to have goals. Without goals, you lack direction and focus. Goal setting provides a benchmark to determine if you are, in fact, succeeding in your trading endeavors. In addition, it allows you better control over your daily trading activities.
In order to accomplish your goals, it's important to set them properly. It's just not realistic to say “I want this”, and expect it to happen. Setting goals is a process that begins with a very careful consideration of what you want to achieve in your trading business, and it ends with the actual work to accomplish those goals. Along the road from setting goals to achieving them, there are some very well defined steps that delve into the specifics of each goal. Knowing these steps may help you to formulate realistic goals that you can actually accomplish.
- Set goals that motivate you.
When you set goals for your trading business, it is important that they motivate you. This means that they are important to you, and you feel there is value in achieving them. Is there a particular trade that you have ongoing success with, and you enjoy? If so, one of your goals may be to continue with that particular trade, but perhaps increase your position size a bit.
- Set goals that are SMART
Many of you may have heard of smart goals. In order to make your goals more effective, they should be:
– Specific
Your goals must be clear and well defined. Generalized goals are usually not that helpful because they don't provide enough direction. Remember, your goals will show you the way, so you should make it as easy as you can get where you want to go. Defining specific goals will help you do this.
– Measurable
Your goals should include precise amounts, dates, etc. so you can measure your degree of success. If your goal is simply defined as “I want to increase my trading income this year”, how know when you have been successful? If that, in fact, is one of your goals, state it with a precise figure. For example, “I want to increase my trading profits by 4% in 2017 over last year.”
– Attainable
When you set your goals, make sure they are attainable. If you set a goal that is unrealistic, you are setting yourself up for disappointment. This can lead to a possible loss of self-confidence. At the same time, try not to set goals that are too easy to attain. By setting realistic, yet goals that are somewhat challenging, you will have the right balance. These types of goals will bring you the greatest personal satisfaction.
– Relevant
Your goals should be relevant to what you expect from your trading business and your life in general. By keeping your goals in line with your overall trade plan, you will more likely have the desire to achieve them.
– Time Bound
Your goals should always have a time-frame; a date that you plan to achieve them. Having a deadline brings a sense of urgency towards reaching the end result.
- Put your goals in writing.
Taking the time to write down a goal makes it more “real”. As you write, try to use the words “I will” rather than “I would like to”, or “I might”. An example might be: “I will increase my profits from my trading business by 4% by the end of the year.”
- Create an Action Plan.
It's easy to overlook this step in the process of goal-setting, but it is very important. What happens is that you get so focused on the outcome of the goal, that you neglect each step needed along the way. By writing down each step, then physically crossing it off as you complete it, you can see the progress you are making towards the goal. Let's use the example above with the goal of “I will increase my profits from my trading business by 4% at the end of the year”. How will you do that? Outline all the steps you feel it will take to reach that goal, and cross each step off as it is completed.
- Don't Quit!
Keep in mind that goal setting is ongoing. Building in reminders to keep yourself on the path of your goals will help keep the end result in sight.
In summary, goal setting is more than believing and saying that you want something to happen. Unless you clearly define what you want and understand why you want it, your chances of reaching your goals diminish. Hopefully following these steps on goal setting will help you set your own goals with confidence and satisfaction knowing you will reach them.
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