How challenging can be to set Forex trading goals as part of your trading strategy? Actually, should you set trading goals or is it a waste of time?
Targeting forms an integral part of everyday life, either has to do with micro or macro goals. Every day we make decisions based on goals we have already set, whether by design or unconsciously. Setting trading goals and achieving them are among the most useful Forex trading concepts. Find out below how to set SMART goals to enhance your trading life.
What is a SMART goal?
SMART stands for Specific, Measurable, Attainable, Relevant and Time-bound.
Your goals must be specific, clear-cut and definitive. What do you want to accomplish? You have to clarify a “vague” goal. Instead of saying “be more disciplined” say “I will keep total account exposure at 10% at any given time”.
It is important to track your progress, that is why your goal should be measurable. There must be specific criteria, i.e. “measures”, to evaluate and revaluate the aspects of targeting. Measuring and setting milestones can be pretty rewarding and motivating.
What is a goal if you cannot achieve it? Why to get disappointed by setting unattainable goals and give up by the end of the journey? Your targets may be challenging but yet attainable.
A relevant goal must be reasonable, realistic and based on results. You should focus on something that makes sense with your broader goals. Why are the results important? Results help you evaluate and revaluate the process.
Finding the proper time frame for the accomplishment of the goal is crucial. A bad timing means that chances are you are not going to succeed. Ask specific questions about the time-bound and what can be accomplished within that time period.
Turning Forex trading goals into a trading plan
Your forex trading plan must be based on what you can control. Take your decisions on what has happened, not on what you think or want to happen. Better focus on your goals and not on the results. For instance, do not set monetary goals, although we mentioned that your goals should be specific. You’d better set a profit goal keeping in mind that you have to be realistic about your expectations for the returns.
In any case, your plan should be yours and cannot reflect the ideal trading plan of another person. You are the only one who has the full info and can consider the perfect goals that fit your needs, your wishes and your potential.
Another important factor to succeed is to stick to your trading plan and revaluate from time to time based on the interim results of your trading plan. Identifying and correcting your mistakes will help you to trade in a more consistent way.
Sources: Wikipedia, investing.com, Investopedia
PLEASE NOTE The information above is not investment advice.