If you don't know where you're going, any road will get you there.
- Yogi Berra
Do you have a written goal of what you expect to make from your trading this year?
If you do, you're among three in 100 who have any goal in writing. Writing out your goal allows your mind to define exactly what you want from your trading. Once you define a dollar amount you will make for the year, you can break that goal down into what you need to make each month, each week and each day on average. Your goals should not be just monetary. Your goals sheet should also list other areas like improving your percentage of winning trades, widening the size of your winners or reducing the size of your losers. Another good goal is reviewing your processes daily to stay sharp. I'm sure you can think of other areas you'd like to improve. Write one goal down NOW while you're thinking about it!
Goals focus our attention and our energy to give our efforts a clear direction. Without a clear direction, your efforts will not be unified and your results will not be reaching anywhere near your true potential. Setting goals gives the trader a feeling of control over what actions to take to accomplish a goal. This allows traders to grow beyond past limiting beliefs or fears that had previously held them back.
One of the best acronyms I have seen is to set SMART goals - take the goal you wrote down earlier, and make sure it qualifies as SMART:
S - Specific - Goals must be specific, defining exactly what you want to achieve.
M - Measurable - You must be able to measure if your goal is being achieved, to give you the clear feedback you need to stay on track.
A - Achievable - Goals should be ambitious but they should also be attainable. You have to possess the belief that you can achieve the goal in order to
R - Relevant - Your goal must be personally important to you in order to increase the odds that you will be driven by the goal to accomplish it.
T - Timeline - You must have a deadline date to completion, which focuses you on the steps needed and time required in order to fulfill your objective.
Monitor goals daily and change your plan if you're not getting the results you expected. And once you achieve your goal, celebrate your accomplishment - and then set another goal!
Price Headley is the founder and chief analyst of BigTrends.com.