Why should you set Forex trading goals? What are the dos and don’ts that need to be followed when creating your goals in trading? Is there such a thing as a perfect trading plan to achieve your trading goals?
Just like any other goals that you are obligated to set in your entire life, there are right and wrong points that can either make or break your future. This time, we are going to know more about setting trading goals and how it helps in fulfilling the best trading plan.
Reasons For Setting Trading Goals
Setting trading goals must be under two main reasons – to help you in sticking to your predetermined plan on trading and allowing consistent trading. For traders who are still new to the market, setting trading goals means that you are setting a goal that’s process-oriented rather than focusing merely on the outcomes. For instance, if your goals are more focused on risk management, technical analysis, and daily routine then most likely, you will have consistent trading all the way.
Things That Shouldn’t Be Included in Your Trading Goals
A lot of you might think that monetary goals are the key points in goal setting in FX trading. But on the contrary, it is not as useful as it seems. The FX market is dynamic. It will never provide you with opportunities in indirect fashion. There are certain periods in trading wherein the flow is fit for your style while there are also days wherein your trading style just won’t fit on this game.
During these times, you must think of protecting your trading capital rather than setting unrealistic financial targets because you as a trader do not have control over the happenings in the market and the market condition as well.
Other common goals that you can incorporate with your trading are being more disciplined, being more consistent and so much more.
Process-Oriented Goals – How Effective Are They?
These goals that are process-oriented tend to be more useful in helping traders follow their trading plans. When you create a goal, it should also support your trading plan so you can focus on each detail, leading to much better trades.
If you can follow your rules, whether you win or not, the trade is tagged as successful. Plus, if you have proper risk management rules then you will achieve great profits over time. It is wrong to think that profitable trades are all good trades and unprofitable ones are not good. Sometimes, pushing too much to achieve a good trade will only make you a loser while going for a ‘bad’ trade can sometimes gain you some money.
Always bear in mind that aside from poor risk management and trading plan, poor behavior on a profitable outcome will only invite negative reinforcement. The same thing goes for good behavior gaining some positive reinforcements. Don’t get distracted and focus on the latter. Moreover, it is important to remember to always have a Forex trading plan that also covers entering and exiting trades as well as managing your funds, the market that you want to trade, and the risk that you are willing to embrace.