Sunday, 12 October 2014

Smart Goals

When I was building businesses for a living one of the most important aspects of owning a business was to have goals.  And not just any goals, but Smart Goals.  Without them you don't have a business and you don't have a trading plan, you're just winging it Gambling per se.  I can tell you here and now that any business owner that had Smart Goals did 10 times better than business owners without.   Having me coach them and hold them accountable helped too. ;)

S.M.A.R.T.  Goals are Specific.  Measureable. Attainable. Realistic. Time lined.
  • Specific.   General goals like "I want to make money from trading" are too vague.  You need to be precise and concise.  Know what you want and be specific.  Ask yourself, Who, What, Where, When, Which, Why.   A specific goal would be "I will start trading a demo account and trade every weekday for at least 15 minutes."
  • Measurable.   Without a sense of urgency or commitment, goals can be like your New Years Resolutions.   They're there but have no substance.  You have to hold yourself accountable and set yourself up for success.  You need to be able to measure your success and put some numbers to them.   How long will you trade per day?  How many trades will you make?  How much money do you need to make?  (Read Pips versus Dollars tomorrow).  When will you know you have hit your goal? 
  • Attainable.  When you set goals, start thinking about the possibilities, obviously those opportunities should be attainable.   So be honest with yourself and know what you can and can not do, in what timeframe.  What skills do you need to develop.  What preparations need to be done.   Will you do it on your own?   Do you need help from someone to coach you through it?
  • Realistic.  Don't be afraid to dream big BUT make sure it's attainable and realistic.   Your goals must be realistic.  Your goals should be high enough to motivate you and give you a little bit of struggle.  Low goals don't motivate and give you little in return.    Financial Freedom, sure.  Leave your job tomorrow and start trading with your life savings. NO.   Trade part time, study, learn, improve your skills, first using a demo account, then if certain goals are met, with a real account.   Again ask yourself if you want to travel the road by yourself or have an experienced professional, a coach, available to guide you through it.
  • Time lined.    ASAP (As Soon As Possible) or PDQ (Pretty Damn Quick) isn't good enough.  You might as well just say "I will do it someday".     You need to have specific time lines in place.  Your goals have to be timely or tangible.

    For example, I will trade a demo account for one year, with the help of a professional, while learning the fundamentals and basic, 4 hours a week to start, and then 2 hours per week after the first month, and 1 hour per week after the first 3 months.  As my learning curve goes up, my time and effort goes down.  I intend to make 10% ROI (return on investment) on my demo account in the first 3 months and re-evaluate my ROI once I have had 3 months experience.   In one year I intend to have made more positive than negative trades, and more positive pips than negative pips.  I will have weathered the four season of the forex market, made mistakes, learned from them, and I intend to update my trading plan every month and adjust it where necessary, with the help of my coach.   I will have enough free time to spend with family and friends, and not overcommit my time to trading.  Family. Friends. Work.  Come first.   At the end of the year I will revisit my trading plan and with the new knowledge and experience I have gained I will plan the next year, 3 years, and 5 years.  I will have completed my goals when I am making sufficient money from trading where it is more than just extra income and will consider trading full-time.  Or part-time.  Depending how I feel about my job, finances, and family time.  Trading will help me live the life-style that I choose. 
Sounds simple? It can be.  Just put your mind to it and make sure you put the time and effort into it.  The payoff is directly proportional.  Next you need stop thinking about money and start thinking pips!