Forex Traders Approach To Goals
Trading Goals, are they REALISTIC?
I’m not going to lie to you, I HATE that word. I believe “realistic” is whatever you believe it is. That being said, a lot of people have this question about trading because everybody gets into trading to make MONEY, not pips, at least not at first.
So it’s only natural to ask what goals should one set and what should they “realistically” expect from their trading? And that’s what we’re going to be talking about.
KIND of Trading Goals
Your trading goals don’t have to be financial, to be honest the financial part of trading comes last in goal setting, trust me! No point in setting financial goals if you still haven’t got the education that you need to achieve those financial targets because it’ll always be 1 step forward, 2 steps back until you can get yourself in a position to STOP LOSING money.
Actually… that should be every traders very 1st goal. That’s why you’ll hear a lot of people say only risk 1% of your trading account to new traders. The goal at that stage is to STAY ALIVE long enough to learn how to then MAKE MONEY.
If you keep blowing accounts because you’re over-leveraged and trying to flip accounts with no knowledge about what you’re doing, pretty soon you won’t be able to afford to learn about the markets. You need to give yourself the time and space to make mistakes, because you will and that’s okay.
Most traders fail because they simply don’t stick around long enough to succeed, and sticking around costs money BUT you decide how much to pay for your tuition. Let that sink in, if you trade big size with little education you have to accept that you might be forced to drop-out. But! If you do stick around you can get to actually reaching your trading goals.
Once you have learned how to lose less money than you make. The next part is trying to maximize that so that your trading reflects the profits you wanted out of it.
How to break down your goals
Trading, in my view, should be treated like a game AND a business. Let me explain… you’ve probably heard a lot of folks talk about focusing on the pips and not the money and that will help your trading get better.
That’s why I want to advise you to treat trading like a pip game. A game where you try and make more pips than you lose because the more you can detach yourself from the pressure of making money, the more focused you will be. When your pips are up, your money is up. Then it’s clear what you have to focus on. Your PIPs!
If you have lost more pips at end of the week or the month or the year, your business or “bottom-line” will be red so it can help to see it as a game in that aspect. But, it must be respected as you would a business. Being consistent and disciplined about what you’re doing and how it affects your trading business.
Not taking unnecessary risks and coming to the markets with a clear mind ready to execute your trading plan. Not after you’ve just had a night out and you’re trying to analyze the markets with a hangover or attempting to manage trades just after you and your spouse or partner just got in a heated argument and your emotions are still high.
RESPECT the market. Do not ever think you’ve got this market licked no matter how good you get at this. It’s important to believe in yourself and trust in your analysis otherwise you won’t be able to pull the trigger when the time comes but know that anything can happen at the same time.
What can you get out of Forex trading?
So to answer the question of what Forex trading can do for you? It depends on you. To put it into perspective though, a bank will give you pitiful interest rates per year on your money and a good “beginners” goal is to simply get a better return on your money than the bank would give you.
For example in South Africa, currently the rate is around 6-8% per annum depending on different banks and accounts which usually, they claim, just beats inflation but never beats REAL inflation which is a topic for ANOTHER day. But that should be your BAR.
If your trading can get to a point where you are better off trading your money instead of letting it sit in banks, you will have achieved a great feat.
Notice I said “beginner” goal. Because pulling out 6-8% per annum trading, especially smaller accounts, can be achieved when you know what you’re doing. You could produce those returns monthly once you really get going. But the learning must happen first.
Don’t bet the farm.
Don’t lose your shirt.
Cut the L.
Keep the W.
Risk per trade FAQ
Trading goals are different for every trader and can vary based on their risk appetite. A good goal would be to find an edge first before you start trading live money.
Performance goals will serve you much better than monetary goals. Keep track of how well you traded, not how much you made.