The Problem with Goals
February 19th, 2018 | 3 minute read (Repost from We The Market)
I thought the title might catch your attention. Goals are everything when it comes to trading. We set risk / reward goals, Loss limit goals for the day and week and same with profit targets. We may have goals of how many books we read on the subject of trading. For us over achievers that day trading attracts, we have many goals we strive to complete. You can go on and on listing your personal goals.
Now, if you are racking your brain to find a problem with goals then I will tell you. The problem with goals is once we prove to meet a goal we might move on to the next goal. Meeting a goal such as, Today I will Minimize Losses. I had even stated in my blog about minimizing losses that “I have proven this week to reduce a single stock loss when it happens.” I did have a day where I did an exceptional job of minimizing my losses. I then made a NEW goal and pursued that without even giving my last goal a thought.
As you may have guessed it, I suffered uncomfortable losses. When reviewing my trades, the losses stick out like a soar thumb. I urge my readers to not only set goals but turn them into habits. I believe I heard somewhere that it takes 21 days to form a habit.
This is the new goal. Set a goal and then determine if this is a daily, weekly or whatever time frame. Some goals need to be repeated every day until they become a habit. This is definitely the case with me proving that I can follow my risk goals which in turn help me reach my overall goal of minimizing losses for the day, week and month.
The only problem with goals is that they may need to be pursued again after you have reached your target. I encourage you review your past goals to ensure they are still in check!
Keep it green!