When you begin trading there are a lot of questions to be answered, and with a wealth of information there, it can often be hard to decide where to start. Setting goals can help, but often novice traders set the wrong type of goals. As a novice trader, your initial goals should help you eventually make money, but this desire for profit shouldn’t be your primary goal.
That’s why today, the forex education experts at Learn to Trade are discussing the importance of setting trading goals, delving a little deeper into why your initial goals should be about bettering your own processes and emulating the key traits of professional traders.
Make note of your actions
Every time you open and close a position, you must make an entry in a trading journal. Note down the essential pieces of information, such as the criteria used to enter and exit the trade, as well as any observations made along the way. When you write this information down, not only are you creating an invaluable resource for you to measure and track your progress, but you’re also training your brain to think mechanically – which is arguably the most important part of trading.
Keeping a trade journal is the best way to identify trends and patterns. As you keep track of your trades over time, you’ll begin to see certain trends emerge, such as how frequently you’re exiting trades too early or too late. So, a trade journal is an efficient method of seeing where you could improve. Alternatively, it can also help you identify how to make more money by repeating and refining your past successes. Your trading journal forces you to stay honest with yourself about what you are (and aren’t) doing, which is a powerful motivator to keeping on track and monitor progress towards goals.
Avoid predicting the market
It’s important that when you’re forex trading, you don’t set yourself a growth goal. New traders are often keen to set a number of targets for the day, or a certain percentage return per month. However, you can’t take more than the market will give you – sometimes, the best trading decision you can make is to wait. Setting yourself a defined growth goal will force you to trade in unfavourable conditions, which may not pay off in the long run.
Alternatively, making a plan to include how trades will be entered and exited and how the money will be managed will be a lot more beneficial. The more detail on the plan the better! Utilising your plan effectively is also a great way of predicting the ranges and trends you expect to see.
Stay in control of your success
You are in total control of your successes by utilising your plan, setting goals and equipping yourself with an educated know-how. With experience, you can control how you react to a fluctuating market successfully. No strategy will make money all the time (this is simply the nature of the market), so the better you can control your emotional decision-making, the more money you are likely to make – and reach your goals.
Instead, why not construct a process for analysing market conditions? Having a defined process about how you analyse market conditions is essential if you intend to achieve consistent profits and attain your trading goals. Keeping this process the same every single day will help you develop discipline, as at teaches your brain to perform certain functions at specific times. This tip is especially essential if you’re aiming to become a forex day trader
Whether you’re increasing how often you’re trading or are simply thinking of setting some new trading goals, we recommend that before you start anything, you need to have a clear path in your mind of how to get there. We hope you have been inspired by this article to set your own trading goals to ensure your best chances of success in the world of forex.
John James is a content writer for Learn To Trade, the foreign exchange education and learning specialists – offering a range of training courses to help people understand the currency trading market, as well as its opportunities and risks.