Here’s something for you to think about, if you’re serious about attaining financial independence with Forex trading.
Can you answer any of these questions with certainty and clarity?
– Why are you looking to trade for a living?
– What is your competitive advantage?
– How will you know when you’ve attained your goal?
– How will you break free from being chained to the computer?
So… how did you do with these questions?
If this was difficult for you… don’t worry, because the vast majority of traders cannot answer these questions.
Unfortunately, this is one of the reasons why many retail traders fail to grow their capital after 12 months.
Be Specific About Your Future.
The first step toward achieving your goal is determining exactly what it looks like.
– Why would you keep trading after facing failure after failure, after failure?
– Why and how are you able to keep making profits when so many others have failed before you?
– How will you know whether you’re progressing as a trader?
– After trading profitably for 2 years, what will your average trading day be like? How many hours a day would you be spending looking at price charts?
These questions need to be answered as specifically as possible.
“I’ll know when I’ve attained my goal when I don’t have to worry about money” …is just not specific enough.
A Quick Example To Get You Started
Let’s think about how much you’re looking to make per month, on average. (As mentioned in the How Much Can I Make post, this is actually more of a benchmark than a practical estimate).
Start with a short term goal (say, over the net 6 months), and a long term goal (over the next 2 years). Needless to say, you’ll have to be realistic about this. Factors to consider are your trading experience, and your willingness to invest time, effort and money on training.
Over the period of your long term goal, you’ll have multiple short term goals. So each short term goal must be be in congruence with the long term goal.
What’s Your Long Term Goal?
Let’s say you’re looking to make about $2,000 per month trading after 3 years.
Don’t spend too much time fussing about your long term goal – circumstances can change quickly so it may not even be relevant after one year of trading.
The purpose of the long term goal is ironically to pace your short term goals. They are what’s important right now.
What’s Your Short Term Goal?
Considering that most people don’t even make a single cent after 6 months of trading, I think an average of $200 per month is a good short term goal.
Obviously, you’re not going to achieve that level of success immediately when you start, but it gives us a gauge of what your progress will look like… which is the whole point of this exercise.
So… that’s $200 per month after 6 months of training (short term), on the way to making $2,000 per month after 3 years (long term).
Now we have a much better idea of what your progress is going to look like.
Obviously, these numbers will differ based on individual circumstances, but this process of specific goal setting keeps us from veering off the right track.
Goals Serve The Process
I’ve always felt that the process is more important than the goal, as one needs to go through a proper process before the goal can even be in sight.
And yet without suitable goals, a process leads to nowhere.
So here’s the way I see it.
You need a specific number for your goals, so your progress can be planned and bench-marked according to them. However, these goals are set with the understanding that the numbers can, and often do change as along with new circumstances.
So although you want to start with a specific goal, you know that there’s a fair chance that number will change in the future, to a different specific number.
Don’t fret too much over the number. A ballpark number is fine, as long as it’s specific.
The Next Step
With these goals in mind, the next step is to plan our your (intended) progression as a trader.
Over time as you practice trading, you can modify the numbers to something more appropriate to your circumstances.