Here's my question to you: are there right or wrong goals when you are trading? Or would it be more correct to say that if you have an achievable goal, it doesn't matter HOW you you achieve it? The point for me is that unlike many other businesses, you can't really be sure whether your goals are achievable or not. The reason is simple: we never know when the market is going to expand into a good stable trend and when the trend is going to end with a dull sideways market. That's why it doesn't make sense to set targets like "earning 50 points a day" or "having done 100% by the end of the year" Jesse L. Livermore puts it nicely: "There is a lot of kinds fools out there, but there is one special kind - a Wall Street fool who thinks he has to trade every day." We can only contrlol our own risks, but we can't control the market, just like a fisherman cannot force a fish to swallow the bait. Let me illustrate this by giving you screenshot of one trading day of one of our funded traders. The bars in the Volfix trading window go green when you've been in a long trade. This the trader was buying the market all day long, making a lot of trades (you can see the list of trades on the left). However, the market showed a clear downside bias at the beginning of Chicago Session and then went down all day. So if it makes no sense to set goals for profit and stable daily earnings, what should our goals be like? Maybe we should focus on the trading process itself, but not the targets? Let's think of some correct goals we can set before ourselves. 1. Reducing the number of wrong/ non-systematic entries per month to 5. (You need to have a set of your own trading rules already in place in order to achieve this goal) 2. Bringing the number of great trades to 80% this year. (The criteria for a correct trade could be, for example – no averaging, the initial stop is clearly defined, trade exits are executed either by a SL or a TP, never increasing your risk for a trade, etc). 3. Keeping the maximum account drawdown at 20%. 4. Keeping personal/family budget separate from your trading deposit and never mixing the two. 5. Reducing the number of total trades to 1-2 per day to stop overtrading. E.g. This is one of our funded traders who recently made almost $4000 trading Gold by making following this rule. Wrong targets: 1. Earning 100% in a year, 300 points a day, etc. 2. "I want to make money on this trade to buy a new car" 3. Making consistently 0.5% every day. I have tried this psychological trick and it worked for me: "My main goal is not making good money, it's making good trades" How about you? Do you have your own set of goals in trading? If yes, do you reconsider those goals from time to time?
The very obvious goal which is wrong headed is trying get rich overnight on a very small trading account of say $1,000. Not to say, you cannot grow that $1,000 but, trying to turn it into a million overnight, would mean you would risking every penny of that $1,000. Chances are good, you will lose every penny of your monies. No risk management or proper position sizing on top of that. Upside down trading is what trying to get rich overnight is. They get sold out by the penny stock gurus to believe the impossible. I get the allure of penny stocks where you get huge percentage gains on a small amount of monies. However, penny stocks are being front run by the same gurus against their very students. Their students just being too dumb and gullible to figure it out. Their utter greed overcoming their common sense. Me, I just follow the trend and go for absolute returns like Ed Seykota. Take what the stockmarket gives you. You do not know ahead of time how long a trend would last so, better to just sit back and relax. Have your stop losses take you out when the time comes.
%% I like to set goals/even though i make more with trend following without goals. As far as countertrend following\ big goals are helpful\but have to take what you get......................................................................................Some of the stuff i trade/invest in made/makes more than 100%, but after UPRO did 100% + with dividends /not much in 2021/LOL . So i would not auto exit @ 100% +/nor would i cry in 2021 if SPY+......... did better than UPRO/2021 .[They did/LOL]
Start with small capital and bet small. Focus on the method and as time goes by, and odds is in our favor then increase the bet gradually. If things didn't go our way, reduce bet and focus on the method again. It's a continuous cycle.
%% Good goals...................................................................................................... WHEN things go our way; keep looking for something else.And when things dont go our way, honor stops. I'm still looking for something to trade every day; invest every day has worked out much better for me. Actually the no comission/low comissions that started in OCT has enabled me to trade every day/ i chose not to in 2020. I may trade every day in FEB or MAR or more. I trade more standing up+ would never go back to trading most every day sitting down.
My goal is to follow my plan. That way if I'm not profitable I know the problem is the plan not the trader. I don't expect to be profitable every trade. I'm happy and very profitable with a 50% win rate. If a trade loses money and I have followed the plan it is a good trade with a bad outcome.
The goal should be zero. Follow the plan!!! A great trade could be a losing trade if you follow your plan exactly. This is not really in your control. A series of trades with bad outcomes can result in such a drawdown. At a 20 % drawdown I would take the time to review my plan. Easily achieved. Just need discipline. But the next set-up might be very profitable. Know your edge. Trade you edge. Goals should be specific, measurable, have a time limit and be reasonable.
%% Im happy with a 20% dd rate /average; some dd=more , some dd == less..........................................................
I think your trading goals should be more realistic because they are goals not targets. So I mean to say that my goal is that I will quit my job in one year, but the daily target should be like at least one or two profitable trades. The loss percentage should not be high.