Having a clear goal is an important thing for you to become a successful in all industries like medicine, finance, and technology.
Most experts believe that people who have goals and work hard towards them become more successful in their professional and family lives. Do you think this is different for a day trader? It is not.
When it comes to pursuing a trading career, having a clear goal can be the key to success. Day trading can be a high-stress and fast-paced profession, and without a clear goal, it can be easy to lose focus and become overwhelmed.
However, with well-defined goals, day traders can stay motivated, make more strategic decisions, and navigate the markets with more confidence.
In this article, we’ll explore the importance of having a career goal as a day trader, how to define and refine your goal over time, and how to use it to achieve success in your trading career
SMART criteria in goal setting
One of the best ways of creating a goal is to use the SMART methodology. First, the goal should be specific (the S). In this, ensure that you know what you want to achieve and don’t be vague about it.
Second, the goal should be measurable (M), meaning that you should be able to quantify the outcome. For example, if you are a trader or investor, you need to measure the success in terms of monthly or annual returns.
You can see how “I want to make money” doesn’t mean anything.
Third, the goal should be attainable. (A) For example, you should not set a goal of growing your account from $10,000 to $1 million within a month. Unless you are so lucky, this does not happen.
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Fourth, the goal should be realistic (R). For example, if you are just starting your career as a trader, you need to know that it is impossible to make double-digit returns every month. There will be some months when you will lose money.
Also, it is not possible to start a multi-billion dollar hedge fund without doing the hard work. In most periods, hedge fund managers work for many years before raising billions of dollars. Therefore, it is important for you to be realistic when starting your trading journey.
Finally, your goal should be timely (T). It is often said that a goal without a timeframe is simply a dream. In trading or investing, you should ensure that you have timed your goal well. For example, if your goal is to start a hedge fund, you should have a plan on when you will start it.
Why making money should not be your main goal
The goal of a successful trader is to make the best trades. Money is secondary.
Everyone wants to trade and invest to make money. However, the reality is that this should not be your first goal. When you focus on money rather than the process, you will often make mistakes.
Instead, we recommend that you focus on the process of trading and investing and the rest will follow. Also, you should strive to be a holistic trader who both makes money while maintaining a good quality of life.
For example, in addition to making money, you want to have a good work and life balance and be in a good mental state.
The other goal should to always have more wins than losses. Fortunately, there are several things that can help you achieve this, including:
- Risk management – There are many tools that can help you mitigate risks when trading, including a take-profit and a stop-loss.
- Analysis tools – There are many tools that you can use to trade, including technical indicators and chart patterns.
- Trading pattern – You should work hard to come up with a good trading pattern. For example, some traders do well when the regular session starts while others like to trade during the middle section.
Examples of good trading goals you can make
There are several examples of trading goals that you can make as a trader. Some of the most popular goals that you can have to succeed as a day trader are:
Mistakes will always happen when day trading. Therefore, your goal should be to reduce the number of mistakes that you do every day.
Some of the things you can do to achieve this goal is to do intense research on all trades, always have a catalyst, and having a trading plan.
The markets are constantly evolving, and it’s important to stay up-to-date on industry trends, news, and best practices. This can involve reading books, taking courses, attending conferences, or working with a mentor.
Also, you can make fewer mistakes by always having a trading journal, which is an important tool that lets you to document all your trades.
The goal to have a work-life balance
The other goal you can achieve is to have a good work-life balance. Fortunately, this is something you can achieve as a trader since you don’t need to spend tens of hours per trading day.
You can also create a trading plan that makes it possible for you to have more time for your family. For example, you can focus on trading for about 5 hours per day and then spend time with your loved ones.
Finding a balance between your financial market activities and your free time can help you cultivate hobbies outside of trading. This can help prevent unpleasant consequences like overtrading and burnout.
The goal to be happy
You should also make a goal to be happy since life can be so negative. And at times, trading can make you so unhappy, especially when trades are going against you. Therefore, you should have a goal to be happy.
One of the best approach to this is to practice self-care. It’s important to prioritize your physical and mental health as a day trader.
This can include getting enough sleep, exercising regularly, and taking breaks throughout the day to recharge your mind and body.
You also need to cultivate a positive mindset. This can help you stay motivated, resilient, and optimistic in the face of market challenges. This can involve practicing gratitude, setting realistic expectations, and reframing negative thoughts.
Freedom and flexibility
As a trader, you can trade whenever you want and in most cases, you don’t answer to anyone.
One of the most appealing aspects of a career as a day trader is the freedom and flexibility it can offer. This is important since trading is different from a 9-5 job.
Unlike many traditional careers that require set hours and locations, day traders can work from anywhere with an internet connection, and can choose when and how long they want to work each day.
This level of flexibility can be especially attractive for those who value work-life balance (as we advised you above) or have other commitments that require a more flexible schedule.
However, it’s important to note that with this flexibility comes a high degree of responsibility and self-discipline, as day traders must be able to manage their time effectively and stay focused on their trading strategies
In this article, we have looked at the concept of having good goals in day trading. As we have seen, goals should be specific, measurable, achievable, realistic, and timely. This is the most crucial thing you should know about goals. Also, we have explained why money should not be your goal. Instead, when you focus on the things we have looked at, money will come.