9 Steps to Making Your 2016 Trading Goals Stick

The new year is always a good time to hit the reset button and create new trading goals for the coming year. Most traders set fantastic goals, but few actually achieve them. In fact, after a month or two, most don't even think about their 2016 goals because most have already become impossible to achieve. 

Let's fix that. Here is how we set our 2016 trading goals to guarantee success.

1. Call them goals, not resolutions.

A resolution is an intention to do something. Basically you are saying you will start something. I am going to start exercising is a resolution.

We want to move from intention to action. A goal is more specific because we focus on the process and end result. You do not merely say you will exercise in 2016, you get more specific and say I will lose 20 pounds. The intention is no longer open ended. You have something specific to work toward.

2. Say "I will" or "I am"

Language is important. It sets the tone and puts us in the right frame of mind. If you say "I plan to lose 20 pounds", it's something you do in the future. If you say "I will lose 20 pounds", you are demanding you complete the task. Even better, if you say "I am losing 20 pounds", you are already in the act of accomplishing the goal, there is nothing to start.

3. Create specific actions.

Frame the goal with specific actions, not just the goal itself. For example, after stating that you will lose 20 pounds, be specific in how you will achieve that goal. I will lose 20 pounds by cutting out sugar, running 4 miles 5 times per week, sleeping 8 hours per day and drinking more water. These are specific actions that give you a road map for how to achieve your goal.

4. Focus on mastery

You will not accomplish your goal with a superficial understanding of what it takes to achieve the goal. All top performers gain mastery of what they are trying to achieve. If your goal is to lose 20 pounds, you must master nutrition and exercise with a deep understanding of the subject matter.

5. Focus on the Few

Less is better. You can not master many things. Take a few things and learn them inside and out. Once you achieve mastery of one or two things, only then move on to something else.

6. Act on your Goals

We spend a lot of time coming up with fantastic goals and dreaming of achievement. Few act and even fewer continue to act once they start. Take that first step and do not put it off. Once you take that first step, keep taking steps until the goal is met.

7. Change Your Habits

The goal must become a part of your life. You eat, you breathe and you accomplish your goals. Work hard at creating habits that make your goals routine.

8. Persevere

Most people quit after the first set back. Those that achieve their goals push through the inevitable first set back. They don't give up. If you gain two pounds, regroup and get back to doing what you need to do to achieve your goal.

8. Review and Analyze Weekly

Your goals need to be your number 1 priority. Reviewing your goals every week does two things. First, it makes sure they remain a priority and keeps you from slacking. Second, it helps you figure out what is working and what isn't. I have my calendar set every Saturday morning for in depth goal review.

Following these 8 steps puts you in the position to achieve your 2016 goals. In the next blogpost I will layout my 2016 trading goals.

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100 Trading Quotes To Put Into Action And Change Your Life: Michael Jordan on Limits and Trading Scared

I forbid any trader I am working with to set this type of trading goal: "I plan to make xxx dollars per month." This is a common goal that almost every trader has made at one time or another in their trading careers. So why should you avoid this goal like the plague?

First, if you have a set dollar amount to make per day, week or month, you will more than likely execute trades you should not take because you are trying to hit your dollar amount. Rarely does pushing trades like this actually get you to your goal. Most of the time you will end up on the losing end of these trades.

Second, and more importantly, setting a dollar goal places a limit on your potential gains. What usually happens when we hit a goal?

We relax. Feeling a sense of accomplishment, the natural tenancy is to pat yourself on the back, work less and take a little mini-vacation.  How many times have you hear a day trader say he hit his daily goal and is taking the rest of the day off? I've seen it too many times.

This trader, once hitting his daily goal (also applies to weekly or monthly goals) effectively places a limit on what he can make.

So why do we set these types of goals? Michael Jordan equated limits with fear:

Limits, like fear, are often an illusion. 

Over the years dozens of traders have told me they set goals/limits because they do not want to lose their hard earned gains. They fear they will give it back. This is a psychological flaw, and the sad thing is they are actually proud of themselves for creating this type of rule.

They are TRADING SCARED, and as Jordan would say, this fear is an illusion.

What if Michael Jordan had set limits on himself?  The Chicago Bulls would not have won 6 championships, he would not be the greatest of all-time and would not be the first billionaire NBA player to own a franchise.

Rather than set a dollar related trading goal, set process related goals.  For instance, every quarter I grade all of my trades A to F.  Win or lose, my goal is always to have straight A's.  Even if a trade was a loss, I can earn an A if the setup was good and I followed my risk and trade management rules.

If you follow a process oriented approach, apply your methodology and never place limits on yourself, in time you will achieve more than you ever dreamed. The 100 Quotes To Put Into Action and Change Your Life Series:

Quote 1: Nehru on Caution as Risk

Quote 2: Bruce Lee on Creating Opportunity

Quote 3: Machiavelli On Risk Management

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