So…Have You Set Any Good Trading Goals Lately?

Way more than just some conversation starter like "So, seen any good movies lately?" or "Come here often?" there's a real purpose behind the above question about trading goals, and this is it: For traders, if you're not working toward something, you risk becoming stagnant and falling victim to monotony and the status quo. So—and be honest here—have you set out in pursuit of any new trading goals lately?

Now, we've talked plenty about trading goals in the past; so much, in fact, that I was even growing a bit tired of it for a while! I realized, though, that lo and behold, this year seems to be flying by, and with the summer months and midpoint of the year coming before we all know it, now seems like the right time to re-start the conversation.

What follows are important considerations for retail Forex traders when setting or revising trading goals, and the importance of having an actual plan in place for achieving them. Take time to work on goal setting now while there's still plenty of year in front of you and you'll be more likely to realize some meaningful improvements in your trading process, and in turn, your performance as well.

Takeaways

• Why you should have trading goals

• How to identify good ones from bad ones

• Have a plan to achieve them!

Why Now Is a Good Time to Assess Your Trading Goals

I don't know about you, but I can still remember early-January like it was only a few weeks ago. At that time, we were enjoying success in GBPCHF reversal trading and looking to add to it on pullbacks. Lots has happened since then, from big macro events like the horrific terror attacks in Brussels, the buildup to the UK Brexit Referendum vote, and price action trade set-ups in equities, GBPNZD, and more. Here's the point, though: Time flies, and it can get away from you if ever you're simply caught up in what's happening right now.

You are CEO of your own trading operation, after all, so thinking big picture, and continually assessing where you're headed, laying out new trading goals, and planning for how you'll get there, is crucial. Plus, with the traditionally slower summer months looming, traders may have a bit more time for activities like continuing education, new skill building, and self-improvement.

That's why right now, before mid-year and the summer months are upon us, is when you should think about your prior trading goals, how you've fared in achieving them, and maybe set some new trading goals to work on starting now and throughout the second half of this year. Get committed to working hard at them, though, and most of all, take care to set proper, purposeful trading goals. Here's how…

What Separates Good Trading Goals from Bad Ones

Ask most traders what their trading goals are and they might tell you vague, general things like "Make more money" or "Become a better trader." And while both are noble causes, those aren't high-quality trading goals, or even advisable ones to have, and I'll tell you why. It's because they lack key components like the ability to really quantify or track them, and there's no real rationale behind how you'll go about achieving them, either.

When setting trading goals, make sure you truly think them through, and consider not only why you want to achieve them, but how you'll track your progress, and as we'll discuss later, exactly how you'll go about tackling them. In the meantime, key components of high-quality trading goals may include:

Trackable

Things like "Become a better trader" aren't readily tracked, and that's why trading goals like "Maintain and observe full plan compliance for 95% or more of all trades each month" are more productive. You can look back and assess each trade in your trade journal—hopefully you already do—and rate your level of compliance. Break a rule, become emotional, or not control risk to the best of your ability? You know if you did, which makes the latter trading goal easier to track as you continue in its pursuit.

Not Just about Money/Win Rate

The problem with making your trading goals about money and/or win rate is that it doesn't ensure that you are having trading success or more efficiently. You can break rules and take ill-advised risks and still "get lucky" and turn out winning trades, afterall. That's why trading goals should focus on the process, not end results. Maybe it's having efficient risk management, learning new chart patterns or set-ups, or identifying dangerous thought patterns before they cause doubt or delayed execution.

See related: Trading Goals That Have Nothing to Do with Money

Has Incentive(s) Built in

Another question to ask yourself when setting trading goals is "What's in it for me?" Besides improving as a trader, what incentive do you have for reaching your goals? If you can, build in some incentive for yourself for achieving that 95% plan compliance. Maybe it's some new patio furniture, or a new golf club, or just a few days off for some quality time with the family. Whatever it is, add some incentive to keep yourself on track and accountable as you pursue your trading goals.

Don't Just Set Goals, Have a Plan for Reaching Them!

Just the same way hope is not a trading strategy, just because you identify trading goals doesn't put you on track to achieving them! That's why the most important component of any trading goal is the strategy for how you'll get there…and unfortunately, this is the component that most traders tend to overlook, too. Trading goals are journal-worthy entries, so as you're in there writing about them, be sure to lay out a well-thought-out strategy for how you'll take action and track your progress.

If you aspire to place tighter stops or scale out of positions to better control risk, for example, then perhaps you'll spend time each day/week reading available resources, mark up charts to illustrate key price points, and hone your methods by demo trading for a period of time. Then, only once confident and proven effective there, document your new procedures in detail before applying them in the markets under real conditions.

Laying out your plan and how you'll measure your progress in advance is how you pursue trading goals with a purpose, and not just high hopes that things will work out. Needless to say, all of us should work hard to trade with that same sharp focus and purpose as well.