With anything you do in life, setting goals and expectations is crucial. It keeps you on the right track and provides benchmarks to ultimately, obtain the long-term goal; being a wealthy profitable trader.
However, I've come to realise that setting these small benchmarks can actually be quite dangerous. Setting these too high or too unrealistic, we're just setting ourselves up for disappointment and failure from the pressure of achieving it in not enough time.
Usually, as a brand new trader, you quite quickly learn how hard trading is, from the performance aspect, all the way to the psychological aspect, probably the most difficult. Here are 3 trading goals that often lead to disappointment:
Taking more trades and being in the market technically makes you gain more experience, but it doesn't mean you'll learn how to trade properly any quicker than if you took fewer trades.
In fact, this dangerous goal and mindset will lead to overtrading, which we all know is a common pitfall for new traders, leading to failure.
Quality over quantity, you've definitely heard this phrase before, and this same rule applies in trading. Instead of being in 4/5 separate trades, focus on one or two trades, make sure you have many confluences in your trading, learn how to get that perfect entry, and everything else that comes with opening and closing a trade from start to finish.
Come on, who are you honestly trying to fool? I get it, after you've seen all these Instagram gurus preach that you can make so much money and you've finally decided to take the leap and open an account, you quickly learn that making $5,000 in a trade from 10 pips, requires a 6-figure account, which almost everyone does not have.
Medical students do not become skilled surgeons overnight. Apprentices do not become mechanics overnight. This same rule applies in trading. You, someone who just found out about trading through a couple of Instagram ads, do not become a pro millionaire trader overnight.
It's pretty absurd that some people genuinely believe that this is obtainable because I can tell you first hands myself, I've lost more than £20,000 before I made my first £1,000.
Like any profession, it takes years of practice and experience to develop the skills needed to turn trading into your primary income source. You're simply setting yourself up for disappointment if you try to fight this statement.
The profits you make do indeed determine your strategy's effectiveness, but this doesn't necessarily dictate success on a day-to-day basis. Trading is a long-term skill, not something you quickly do to make a bit of extra cash for the day.
Instead of gauging daily success on how much you want to make, focus instead on monthly percentage profit gains. Instead of aiming to achieve $50 per day, strive to achieve +10% per month with a $10,000 account. This way, you can achieve that same target just over a more extended period of time.
Trading isn't just about the money you make, but instead the actual skill behind it. Being able to interpret data about the economy to your advantage and taking "educated guesses" as to the direction of a market. This can be done through technical or fundamental analysis or both.
In an environment that requires a lot of focus and concentration, getting rid of this unnecessary baggage takes a lot of weight off your shoulders and, in the end, becoming a profitable long-term trader.
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