The primary goal setting error set by the trader is to set a currency-related goal. Active traders often tell me that their goal is to earn $X a day or earn X points a day. This is not a good way to build a goal.
Currency-related trading target
What happens when the market trades in a very narrow range? Normally, price changes will remain within the first hour of the day. The range may be only 5 or 6 points - too narrow to provide a large number of trading opportunities. It is very difficult to make money on a narrow day.
So, if your goal is to earn $X a day, how do you do this on a narrow day? Since it is almost impossible to make a good deal on this day, you will not be able to achieve your goal. Moreover, if you can't read that the market has narrowed its scope and instead tried to reach your monetary target, then you might try to trade at every small turn and end the trade on a volatile, ranged day. . At best, your money goal makes you fail because you can't achieve it. To make matters worse, your money target causes you to force a trade in a choppy market, maybe you lose money. Promoting failure, bad trading habits and loss goals are not useful goals.
Better trading goals
A better goal is to focus on your development as a trader. It will help you improve your trading knowledge, skills or abilities. Instead of considering money, consider the trading process. The trading process simply refers to the skillful actions taken by the trader to trade effectively. A useful question is:
If I improve and develop in this field, what trading process will increase my ability as a trader?
Better trading goal example
An example will help illustrate how to do this. Let us assume that you want to improve your trading trends. You have self-assessed Trend Day transactions and found that your biggest limitation is that you tend to reverse trading trends. A simple solution might be to pay attention to whether the market is moving with power and creating higher lows and higher highs [bullish trends]. A useful process goal becomes:
Before trading a fading trade, I will assess whether the market is moving with momentum and creating higher highs and higher lows. If it is a trend, I will not accept the transaction. I will execute this process in at least 85% of the transactions in the next 20 trading days.
Please note that this goal is useful because it fosters the skills and abilities to assess market movements. It also prevents traders from engaging in bad trades. The trader's next step will be to set a goal to execute a trade that is consistent with the trend - again, a process goal.
The trading objectives should be designed to help you achieve your goals. Goals related to money, points or other stats won't help you do this. Achieve transactional goals related to achievement by helping you develop trading skills.
Orignal From: Trading Psychology - Trader's number one goal setting for trading is wrong
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