Any self development guru will tell you that you should plan your future. He or she will add also that your goals should be SMART which means Specific, Measurable, Achievable, Relevant and Time-bound.
Many people apply this guidelines in their work and they achieve success. After that they apply it on Forex. But they lose. Why?
When you set your job goal using SMART criterion you start a supportive process. You have a positive vision of goal which everyday motivates you to work. When you focus on that vision you automatically think what you need to do to achieve it. You see a road which may get you to that goal and you divide it on small steps. After that you focus on the first step to your desired future and you make this step. Next you focus on the second step, you make it and so on. Finally you achieve your goal.
Why it doesn’t work on Forex?
But why it doesn’t work on Forex? In normal job if you make any effort to achieve your goal then you get some positive results of your input. Additionally you can also predict the results of your work.
But on Forex it is different. You can follow your profitable plan and have a losing month. You can’t also be sure about your future gains. You may know yours or other trader’s past results but yours future results will be almost always different.
Because of that if you set a SMART trading goal (for example “I will make X dollars in this year”) then you are probably stressed or unmotivated. Stressed because you are afraid that you will not achieve your goal (because you don’t control if you achieve it or not). If you are stressed then you probably risk less than you should and make less money. You also harm your private life.
You may be also unmotivated because you see no sense on focusing on trading when your goal is beyond your control. Because of that you are not concentrated and you make poor trading decisions.
So how should you set your trading goals? Set your goals about the only thing which you control on markets – YOU. Plan that you will follow your plan, work with your mindset and money will come sooner or later.