Trading Goals

Trading goals refer to the specific and quantifiable results you want to achieve in the investing markets. Trading goals can help you clarify your investment motivations, strategies and risk preferences, and allow you to have a clear direction and progress, as well as an effective standard for evaluation and improvement.

Setting and achieving trading goals is an ongoing process that requires you to continuously learn, analyze, adjust, and execute. In this article, we’ll cover how to set and achieve your trading goals, as well as some common mistakes and advice.

How to set trading goals

The first step in setting trading goals is to determine your investment philosophy and style. You need to ask yourself the following questions:

Why should you invest? What do you want to achieve with your investment?

How much time, money and energy do you have to devote to investing?

What is your tolerance for risk? How much volatility and loss can you tolerate?

What are your expectations for earnings? How fast and how high do you want your returns to be?

What type of investment do you prefer? Such as stocks, bonds, futures, foreign exchange, cryptocurrencies, etc.

What type of investment strategy do you prefer? Such as value, growth, momentum, trend, arbitrage, etc.

What type of trading time frame do you prefer? For example, intraday, short-term, mid-term, long-term, etc.

Based on your answers to these questions, you can form an investment philosophy and style that matches your personal characteristics and preferences, and you can choose the appropriate markets, varieties, strategies and tools for trading.

The second step in setting trading goals is to develop a specific and quantitative plan. You need to set your trading goals based on the following aspects:

Target amount: This refers to the total profit or account growth you want to achieve from trading. For example, if you want to increase your investment from RMB 100,000 to RMB 150,000 within one year, your target amount would be RMB 50,000 or 50%.

Target Period: This refers to how long you want to achieve your target amount. For example, if you want to grow $100,000 to $150,000 in one year, your target period would be 12 months.

Goal Breakdown: This is when you break down your goal amounts and deadlines into smaller and more specific sub-goals so you can track and manage your progress. For example, if you want to increase your income from 100,000 yuan to 150,000 yuan in one year, you can break down your goal to earn 4,166 yuan per month or 4.17%.

Goal evaluation: This is when you regularly check and compare your actual performance with your expected goals, and adjust your plans and actions based on the results. For example, if you find that you did not achieve your sub-goals in a certain month, then you need to analyze the reasons and improve your trading methods or modify your goals.

When setting trading goals, there is a commonly used principle, which is the SMART principle. The SMART principle means that a good trading goal should have the following five characteristics:

S: Specific: Trading goals should clearly define the results you want to achieve, rather than being vague or general.

M: Measurable: The trading goal should have an indicator that can be quantified or calculated so that you can track and evaluate your progress and results.

A: Achievable: Trading goals should be consistent with your actual abilities and resources, rather than being too ideal or unrealistic.

R: Relevant: Trading objectives should be consistent with your investment philosophy and style, not contrary to it or irrelevant.

T: Time-bound: The trading goal should have a clear deadline or time frame so that you can make plans and arrange actions.

Using the SMART principle can help you set a clear and reasonable trading goal, and can increase the possibility and efficiency of achieving your goal.

How to achieve trading goals

The key to achieving your trading goals is execution. Execution is when you trade according to your plan and strategy and remain consistent and disciplined. Execution requires the following aspects:

Trading system: This refers to a complete and clear set of rules and methods you use to conduct transactions, including how to select stocks, enter, exit, take profit, stop loss, risk management, fund management, etc. A good trading system can help you reduce subjective emotions and random operations, and improve trading efficiency and stability.

Transaction log: This means that you record and save the details and data of each of your transactions, including position opening time, price, quantity, direction, profit, reasons, feelings, etc. A good trading journal can help you review and analyze your trading performance and problems, and identify room and direction for improvement.

Trading Psychology: This refers to your mental and emotional state during trading and how you process and control them. A good trading psychology can help you stay calm and rational, and avoid negative emotions such as greed, fear, arrogance, and frustration from affecting your trading.

Trading learning: This means that you constantly acquire and absorb new knowledge and skills from your trading experience and other resources, and constantly update and optimize your trading systems and methods. A good trading learning can help you keep up with market changes and developments, and improve your trading level and competitiveness.

Implementing these aspects requires you to have a certain amount of self-discipline and perseverance, because you may encounter various difficulties and challenges, such as market fluctuations, strategy failure, account losses, psychological pressure, etc. You need to have a determined and positive attitude and believe that you will eventually achieve your trading goals.

Common mistakes and suggestions

In the process of setting and achieving trading goals, there are some common mistakes and problems that may hinder or destroy your plans and execution. Here are some common mistakes and suggestions that may help you avoid or overcome them:

Mistake: Setting a trading target that is too high or too low. If you set a trading goal that is too high or too low, you may give up or fail due to lack of motivation or confidence.

Suggestion: Set a trading goal that is consistent with your actual situation and abilities. You can refer to the market's average rate of return or the performance of other successful investors to set a reasonable and feasible trading goal.

Mistake: Not developing a clear and specific trading plan. If you don't develop a clear and specific trading plan, you may become lost or confused due to a lack of direction or discipline.

Suggestion: Develop a trading plan that adheres to SMART principles. You can use some tools or templates to help you develop a clear and quantitative trading plan, and review and update it regularly.

Mistake: Failure to follow your own trading system and rules. If you do not follow your own trading system and rules, you may make wrong or unfavorable trading decisions due to emotion or randomness.

Suggestion: Stick to your own trading system and rules. You can use some software or platforms to help you implement and monitor your trading systems and rules, and avoid human intervention and interference.

Mistake: Failure to record and analyze your own trading performance and problems. If you do not record and analyze your trading performance and problems, then you may repeat or magnify your mistakes and shortcomings due to lack of feedback or improvement.

Suggestion: Record and analyze your own trading performance and problems. You can use some tools or methods to help you record and save your trading log, and conduct regular reviews and reviews to identify your strengths and weaknesses, and formulate improvement plans and actions.

Mistake: Failure to handle your own trading psychology and emotions. If you do not handle your trading psychology and emotions well, you may become overly excited or frustrated and affect your judgment and decision-making.

Suggestion: Deal with your own trading psychology and emotions. You can use some techniques or methods to help you regulate and control your trading psychology and emotions, such as breathing, meditation, relaxation, music, exercise, etc., and maintain a positive and optimistic attitude.

Mistake: Not continuously learning and improving your trading knowledge and skills. If you do not continue to learn and improve your trading knowledge and skills, you may lose competitiveness or opportunities because you fall behind or stagnate.

Suggestion: Continuously learn and improve your trading knowledge and skills. You can use some resources or channels to help you learn and improve your trading knowledge and skills, such as books, magazines, websites, blogs, forums, communities, courses, mentors, etc., and continue to practice and verify what you have learned. thing.

Conclusion

Trading goals refer to the specific and quantifiable results you want to achieve in the investing markets. Setting and achieving trading goals is an ongoing process that requires you to constantly learn, analyze, adjust, and execute. In this article, we cover how to set and achieve your trading goals, as well as some common mistakes and advice. I hope this article is helpful to you and I wish you success in the investment market!