Life Goals are more Powerful than Trading Goals.
When developing your Trading Plan you should first start by defining a list of Life Goals to base your Trading Goals around. These life goals will serve you as your motivation to be successful in trading and your Trading Goals will give you a performance level to continuously achieve, which in turn will lead you to achieving your life goals.
It is important to remember that for most people, your trading goals, will not be enough to propel you to success when things get a bit tough. You will likely need goals which are more tangible like a “Your own Dream house by your favorite Beach ” or the “Financial Freedom to make the choice if you work or not”, to continue to drive you forward during the tough times. Trading or any other Investment or Business for that matter, is only a tool to enable you to grow as a person and achieve our life goals.
Set your Goals to be “Big and Bold”
These life goals could have been conceived in recent years, or even as far back as childhood. As adults we tend to settle for much less than what we really want, where as children we have the biggest and boldest dreams, as we have not yet developed any roadblocks that we tend to put up as adults. So setting your life goals you need to think big, like a child if you like, as if Time or Money were not an issue. Do not discount your dreams and settle for less, you want your life to be extraordinary.
I remember a quote I heard somewhere “ A Goals is a Dream with a Deadline”, so I recommend setting your life goals in the form of a “10-year Vision”, and then setting your Trading Goals in a way that will enable you to achieve your Life goals
Setting your Trading Goals
Now your probably thinking, now that I’ve define my big bold Dreams and Goals, it’s going to take a rather larger sum of money to live these goals, and how in the hell am I going to earn that much money, its such a large sum of money, right! Be systematic about it and work out a minimum annual income that you want to be able to earn from your trading, and also a percentage profit per year.
Manage your Trading Goals
A good way to help you feel that these trading goals are achievable is to start breaking your annual income and percentage goals down to a quarterly and monthly figures even break them down to a Weekly Number, what are the numbers you have to achieve on a weekly basis to achieve your yearly goals. More importantly what are the actions you are going to actually do on a weekly basis to achieve your weekly. How many hours Market Analysis per night, are you going to follow your rules 100% of the time, how many hours Education per week will you do to further improve your knowledge & skill.
Now that you have broken things down to a weekly basis those rather large figures don’t seem so large and insurmountable. By breaking them down to a quarterly and monthly figures you can lessen the effect of any weekly fluctuations and know that you are on target, like a sign post that tells you and on track.
Define your High Value Tasks
Defining your high value tasks in your Trading Plan is possibly one of the best tips I have learn since trading. By defining your high value task you are identifying the tasks that give you most value in terms of achieving your goals. This way you can focus your efforts and time on making sure you complete these task first even if they are a bit tedious, or your tight on time.
I hope that you are enjoying this blog series on the “Top 10 questions a Trading Plan must answer“. Below are all the posts in this series:
- What are your Life Goals & Trading Goals?
- What is your Trade Entry Method?
- What are your Trade Exit Methods?
- What type of orders will you use to enter & exit?
- What are your Money Management Techniques ?
- How will you manage your Position Risk versus Reward?
- What is your Process for Open Trade Review & finding New Trades Picks?
- What is your Trading Success Profile?
- How will you Review your Trading System to measure & improve?
- What is your Trading Daily Routine-(Part1 & Part 2)?
Next Blog Post ” Trading Plan – Defining your Successful Trade Entry Method ”
Cade Arnel
Trend Hunter
www.globaltrendtraders.com 2009
I like your suggestion to focus your efforts and give most time to the most profitable aspects of the job at hand. We sometimes get lost in our dream, how we would like it to be, when what we are in business for is to make money, that is the reality. Focus on reality.
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