A Guide To Setting Up Your Trading Goals Today: Did you know that we just wrapped up a first in the U.S. Economies’ history?
When the ball dropped and we rolled into 2020, it capped off the first decade in U.S. history that didn’t have a recession in it.
Take a minute to let that sink in….
So what does this mean for your trading goals?
I hate to so quickly dampen that warm and fuzzy feeling… but something tells me that 2020 may not be just any walk in the park.
Here’s just a taste of what’s in store for us this year:
- Brexit…now what?
- Something about a peach 😉
- Presidential Election
- China Trade War
- Hong Kong Protests
- Are we about start a war with Iran?
…to just name a few off the top of my head!
Whether you’re for, against, or neutral on these things, I think we can all agree they’re likely to produce one thing in bulk quantity: VOLATILITY!
Now by no means am I calling for the end just yet (I’m actually quite the optimist!). As the saying goes, “Bull Markets Don’t Die From Old Age.” But let’s be honest, if just a few of those things go a direction the market doesn’t like, the bull “gravy train” may finally run out of steam.
Let’s turn to the charts to visualize the biggest expansion in U.S. History:
Pretty crazy to look at it from this perspective!
So in the era of the FED printing press (i.e. quantitative easing) and easy money, does your portfolio reflect this historic run?
How would a crash like the one in 2000 or 2008 affect your financial goals over the next year or decade?
Would it prevent you from doing anything you wanted to achieve/accomplish:
– Buying a house or maybe paying one off?
– Telling your boss to shove it (i.e. quitting the day job)
– Retiring early… or just on time?
You don’t have to answer me, but at least be honest with yourself: Now knowing (if you weren’t already aware) that we’re capping off the greatest bull market in history, are you satisfied with the things you’ve accomplished over the last year and preceding nine?
Are you consistently hitting the (trading) goals you’ve set for yourself?
You may possibly be thinking “Umm, what trading goals?” 😛
If “YES!” don’t worry, I was there at one point in time too.
Like any successful business, goals should be laid out for the short and long term.
Show me a single business with any kind of long-term success that doesn’t do some sort of FPA (Financial Planning and Analysis) every quarter, if not more frequently… let me save you the trouble in thinking or looking for one, they don’t exist!
And like any successful business, a successful (or aspiring) trader should be doing the same thing with their trading account.
Otherwise, you’re flying blind and far more likely to make impulsive and costly mistakes.
In 1990 Dr. Edwin Locke and Gary Latham published “A Theory of Goal Setting and Task Performance.” Dr. Locke is basically the godfather of goal setting! Their book outlines five principles of effective goal setting, aimed towards setting goals in a workplace but they obviously can apply elsewhere (i.e. your trading):
- Clarity: A goal must be specific and clear (Why are you trading? Monthly, Quarterly & Annual Return Goals? Income or Wealth?)
- Challenge: If you set the bar too low it can be demotivating, but it’s important to keep things realistic. (i.e. Turning $10,000 into $1,000,000 probably isn’t going to happen in year 1 …sorry!)
- Commitment: You have to believe in the goal from the onset and commit to achieving it.
- Complexity: Once again, you need to be realistic with what’s possible. Trading isn’t easy by any stretch of the word. Which makes it even more important to break down your goals as granular as possible (i.e. If your goal is to make 10% a month, how many trades are you going to have to take while not breaking any rules?).
- Feedback: You need to track your performance regularly. Do you have a trading partner/community keeping you accountable to your goals? Have you mapped out your goals for 2020 (or the next decade)?
Now with that last part in mind, I’ll let you in on a little secret… You don’t actually need to be overly concerned about Brexit, Trade Wars, wild Tweets or anything along those lines as a technical trader.
No matter if the market goes up, down or sideways it doesn’t really matter! I learned a long time ago that I need to “Trade What I See, Not What I Think.” And that’s exactly what my software The PowerX Optimizer does for me (and could for you too)!
Regardless of what party is currently in power, or if we’re in the middle of the greatest bull market or the worst bear market, it sets me up to find high-probability trade setups in any market condition.
If you’d like to watch an on-demand recording of a recent training session I held where I walk through my exact “geopolitical-proof” trading plan, you can watch it here. You’ll learn exactly how to consistently pull profits out of the market while being able to tune out all the political noise.