Setting Goals for Successful Trading Growth

Last year I posted how to navigate short-term relief from trader fatigue in my original article on this topic. That earlier version was based upon getting back into a solid trader mindset in a more rapid manner. Today I look at gaining a better perspective of your overall journey in trading over the long haul.

Looking at a stock from a long term perspective on a multi year view in a weekly or monthly chart provides an objective view hard to ignore. Looking at the S&P 500 since 1980 lets you know there will be pullbacks and selloffs, but to stay bearish would result in extinction.

I suggest you do the same with your trading business. In any business there are setbacks and readjustments to take you to the next level To expect no resistance to your efforts is an exercise in futility. The greatest traders in the world have had enormous setbacks along the way. Persistence and a clear vision for the future is paramount.

Setting goals for your trading skills to enhance over time is important. Writing them down probably even more so. Writing helps crystallize vision. Setting a guide post to where you would like to be in 5, 10 even 25 years from now gives you a target for improvement. (Only about 3% of humans write down their goals) In trading the BIG money could come at any time. But your trading skills need to be improving incrementally along the way.

Whatever style trader you are set some goals for improvement in entrance, exit, profit taking and every metric possible that would show objectively your increased worth in the trading profession. The movie Money Ball shows how baseball managers use batting average, slugging percentage, on base percentage and a host of other statistics to find a players real value and worth to the team. As a retail trader you are your own manager and you can do the same analysis on yourself over time.

What skills should you choose to develop and check? Here are just a few ideas.

• Patience– You can rate your personal patience in waiting for excellent entrances. If you know a pullback to the 50-day SMA would be a great entrance, but instead you jump on board at the 21-day SMA, there room for improvement. Use a little math and score yourself. 21/50 x 100 = 42%. And if you had waited another day until you hit the 34-day SMA. 34/50 x 100 = 68%.
• Overtrading– Here is a primer on the topic.
• Continual learning and professional development.

There are dozens of skills to develop over your trading career. Choose the one’s you know would best improve your outcome over time. When you look back on the 45-year chart above on the S&P 500, let’s make sure your performance over time matches and exceeds this chart for your personal performance.

Enuf said.