In this post, I’ll discuss the best trading goal that you should set, and this will help improve your game much faster while setting you apart from the crowd.
Here’s a quick question for you: What do you want out of trading… what’s your best trading goal?
You might answer this question by saying that you want financial freedom, pay back your mortgage, provide for your family; you want a Lambo, a Rolex, and so on (all worthy goals if you ask me), but these are really just things you want in life.
It doesn’t necessarily represent your greater trading goal.
I am not asking for the goals you form as you go about your trading activities but for your grand overall goal.
In other words, of the things you might be inclined to pursue, which is the thing you believe to be most valuable?
Many beginning and/or struggling traders alike will have trouble naming this goal.
They know what they immediately want but they have never paused to consider that grand goal I speak of.
And the reality is that this grand goal is what gets us to all other goals mentioned above – the Lambo and so on — which are really just by-products.
So, what might that best trading goal be then?
Ideally, consistency should be that grand goal: It is the goal that we, traders, should all be unwilling to sacriﬁce to attain other goals.
You must put aside everything else that you desire — your monetary goals—and replace it with that grand trading goal of consistency.
You should seek consistency because without it:
- You will overly focus on short term outcomes and will always find ways to overtrade.
- You won’t be inclined to develop a way of thinking that helps you weather the ups and downs of trading.
- You will never improve your game. You will treat water and wonder why you can’t break out of that phase.
Again, the grand goal of consistency is what gets you to your other goals… this should be understood.
But, okay, suppose that you’ve thought about this grand goal and can explain why it is more important than your other goals… even then, there is a danger that you won’t live up to it.
In particular, if you lack an effective strategy for attaining that grand goal, it is unlikely that you will attain it.
And here, I’m not talking about a trading strategy –a trading strategy is very important but it should go without saying–rather I’m talking about a mindset management strategy that will help you maintain mental stability.
This strategy must specify what you will do, as you go about your trading activities, to maximize your chances of gaining and maintaining consistency trade after trade.
The achievement of such mental stability despite the ups and downs of the market is what Stoics call virtue and Buddhists call equanimity.
It is a state marked by quiet confidence in the midst of falling prices, an unflinching demeanor in the presence of negative emotions such as anxiety, frustration, anger, fear, and disappointment, and maximization of positive emotions—in particular, contentment, gratitude, and joy.
If you’re a regular reader of this blog, you know that I’m always recommending things like meditation and journaling as mindset management techniques.
I like those things because they help you become a more thoughtful observer of your own life.
They help you watch yourself as you go about your daily trading activities and later reﬂect on what you did and saw; they help you identify more clearly problem behaviors, sources of distress in your life, and they help you think in more effective ways about how to avoid these things.
If you’re a struggling trader, try your best to understand this: You will never get off this perpetual boom and bust merry-go-round if you don’t set consistency as your greater trading goal over anything else.
You must learn to recognize how an obsession over short term monetary outcomes can and will easily destabilize you on an emotional level and just categorically refuse to play that game.
And, you must develop and implement strategies to prevent your focus from returning to short term outcomes.
At all times:
- Take care to distinguish between things you can control and things you can’t, so that you’ll no longer worry about things you can’t control and will, instead, focus on the things you can control.
- At any point, if you notice that your attention is excessively placed on the outcome of your trades instead of the process of trading well, snap out of it. Don’t let your mind reinforce that habit pattern.
- Think of money as a way to keep scores. All great traders think this way and you should too.
Obviously, yes, this takes real effort, but what other choice do you have?
If you think about it, when you let your obsession over monetary outcomes run rampant, this too takes effort.
It’s effortful and staining because your emotions are constantly fluctuating between extremes – fear, greed, elation, despondency…
But, if you want to make a career out of trading, this is not sustainable long term.
So, when reflecting on the “cost” associated with practicing discipline (doing what needs to be done) and consistency (maintaining it), traders should realize that there is also a cost associated with Not being disciplined and consistent, and, in most case, it’s much, MUCH higher.