Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 4 - Technical Analysis
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TYPES OF GOALS

Research has found that goal-setting increases performance in sports and it can similarly enhance trading outcomes. Goals provide:

  • Motivation – Goals can inspire us to take the efforts needed to improve performance
  • Learning – When goal-setting is followed by feedback and then by further goal-setting, we create loops that accelerate our learning
  • Self-Efficacy – When we set challenging, but attainable goals, we build our sense of confidence and competence.

Once you’ve learned the specific tools and techniques to align both your conscious and subconscious mind together, the next step is using your mind to accomplish specific goals you set for yourself. These goals can be one of two types:

  • Performance Goals – Performance goals are objective measures and would include for example, your number of winning/losing trades, average winning/losing, ratios etc
  • Outcome Goals – Outcome goals are your end result. For example, Cash, P&L, number of ticks etc.

Whatever the goals you wish to achieve throughout your trading career however, there are 5 key principles to bear in mind when working with goals which will greatly enhance the chances of achieving them:

1. Be specific about what you want

The mind is not programmed to understand negative statements such as “I will not smoke anymore.” The reason for this is because as soon as you articulate this kind of statement, the immediate image is of you smoking! Therefore, state your goals in terms of what you do want instead of what you don’t.

2. Create goals which are realistic yet challenging

The mistake that most people make when it comes to setting goals is to set targets which are too easily to achieve (which makes them lose interest) or too difficult (which makes them become discouraged and give up). Therefore, it’s important that the goals you set for yourself are achievable and yet challenging enough to motivate you to commit to them without becoming bored or complacent.

3. Be totally responsible

Make the sole determinant of success you and only you – don’t set goals which rely on someone else to do specific things to help you achieve them. By telling yourself what YOU will do, not only will you feel a sense of power and control over your own destiny, but also greatly increase the chances of achieving your goal in the first place.

4. Measure your progress

Accordingly, to the hugely influential management consultant Peter Drucker:

What gets managed gets done.

By incorporating this into your own philosophy of goal-setting, not only will you be able to monitor your own progress but also get feedback on your performance and what you may need to change in order to enhance it.

5. Set timescales

In most professions and crafts, it can take at least two years if not longer to progress from an apprentice to a competent practitioner – and trading is no exception. Therefore, create short-, medium- and long-term goals for yourself, and make a habit of checking in with yourself on a regular basis to see how near or far you are from achieving those goals.

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