Without goals it can become difficult to to see the wood from the trees. Let me share one of my goals with you all and then I will show you as Traders how we can set goals using a simple model which I learnt during my education in becoming a Management Accountant.
One of my goals this year is to stay in the business of trading. You may think this is fairly simple but you have to remember the cliche statistic of ‘90% of traders blowing their account!’. To help me achive this this goal I have set my self some 3 simple rules:
- Only trade from 6am-10am
- No more than 3 trades per day
- Only risk 1% of my account size
Providing I stick to the above 3 rules I will have a better chance of being around to fight another day.
Now how do you go about and set your own goals. Well my advice would be to use the S.M.A.R.T model. This helps you break down a goal into 5 pieces.
- Specific – What is your goal and why is it important to you.
- Measurable – Choose a goal which you can measure.
- Achievable – You must beleive that the goal is possible. Something that will take you out of your comfor zone will keep you motivated.
- Realistic – You must have the skills to acheive your goal otherwise you are fighting a never ending battle
- Time – Please set a time limit otherwise you will not have the motivation to acheive your goal. Setting a time goal gives you something to aim for.
I hope the SMART model helps you to set your own goals. Please feel free to post your comments and I will be more than willing to give you my views.
Also dont forget ‘if your goal is not written down its not worth having’. So please spend 30mins and really write your goals out and have this as part of your Trading Plan.