Setting Your Trading And Investing Goals
Goal setting in trading and investing, and indeed in any area of your life, has two vital items involved in goal setting and goal attainment: i) perceived difficulty of the goal; and ii) how specific your goal is.
The more difficult a goal is to achieve and the more specific the goal is, the more likely you are to raise your performance level to achieve the goal. Now, this doesn't mean that you will automatically achieve the goal because it is difficult and specific, it means that with these two elements in place you are more likely to produce high performance which in turn will produce the best overall results.
Let's look at a trading example. Let's say our trading goal is to earn $50,000 next year from our trading activity. That's good but $51,600 will likely create better performance because the brain perceives it as more specific.
Setting difficult and specific goals provide a better outcome than setting goals you know are easily attainable. So, if you believe that you can comfortably achieve $51,600 through your trading, then raise the level to something more challenging like $72,400.
But your goal has to be realistic to be achievable. You need to believe your goal is attainable through your past experience, knowledge, training and/or skills that you can make it happen. So to perform against your goal make it realistic.
So that is the setting of your trading goal. What about along the way...on the journey to achieving the goal? You will be most committed to achieving a goal when you believe that achieving the goal is important. Also when you can see that progress is being made towards achieving the goal, you get the best results.
A way of measuring your trading progress, can be done as simply as keeping an ongoing running tally of your trading outcomes for the year. For example, if your goal is to earn $72,400 from trading for the year and by half way through the year your trading tally is $38,100 you can measure how well you are placed to achieving your goal - you have more than half of your goal achieved.
Most people who start trading shares or investing in shares do not have goals. When asked about what their trading goals are, they don't know and they don't worry about it. The most common response is "to make some money". This is neither specific nor difficult nor does it have a big "Why is this goal important" nor is it measurable.
Start by setting a difficult, specific, and realistic trading/investing goal and start measuring your progress. But make sure you understand why you want to achieve your goal; you need to know why it is important for you to achieve your goal.
Kevin Hogan discusses in his textbook "The Psychology of Persuasion", the idea of "the least acceptable result" and how this is the goal that most people will achieve from any activity. What is your trading or investing least acceptable result? Don't let this be your goal, set your trading/investing goal today and raise your performance and watch the results. - 23229
The more difficult a goal is to achieve and the more specific the goal is, the more likely you are to raise your performance level to achieve the goal. Now, this doesn't mean that you will automatically achieve the goal because it is difficult and specific, it means that with these two elements in place you are more likely to produce high performance which in turn will produce the best overall results.
Let's look at a trading example. Let's say our trading goal is to earn $50,000 next year from our trading activity. That's good but $51,600 will likely create better performance because the brain perceives it as more specific.
Setting difficult and specific goals provide a better outcome than setting goals you know are easily attainable. So, if you believe that you can comfortably achieve $51,600 through your trading, then raise the level to something more challenging like $72,400.
But your goal has to be realistic to be achievable. You need to believe your goal is attainable through your past experience, knowledge, training and/or skills that you can make it happen. So to perform against your goal make it realistic.
So that is the setting of your trading goal. What about along the way...on the journey to achieving the goal? You will be most committed to achieving a goal when you believe that achieving the goal is important. Also when you can see that progress is being made towards achieving the goal, you get the best results.
A way of measuring your trading progress, can be done as simply as keeping an ongoing running tally of your trading outcomes for the year. For example, if your goal is to earn $72,400 from trading for the year and by half way through the year your trading tally is $38,100 you can measure how well you are placed to achieving your goal - you have more than half of your goal achieved.
Most people who start trading shares or investing in shares do not have goals. When asked about what their trading goals are, they don't know and they don't worry about it. The most common response is "to make some money". This is neither specific nor difficult nor does it have a big "Why is this goal important" nor is it measurable.
Start by setting a difficult, specific, and realistic trading/investing goal and start measuring your progress. But make sure you understand why you want to achieve your goal; you need to know why it is important for you to achieve your goal.
Kevin Hogan discusses in his textbook "The Psychology of Persuasion", the idea of "the least acceptable result" and how this is the goal that most people will achieve from any activity. What is your trading or investing least acceptable result? Don't let this be your goal, set your trading/investing goal today and raise your performance and watch the results. - 23229
About the Author:
Want to find out more about share trading education then visit Just Shares' site on how to trade shares successfully with Just Shares Share Trading Course.
posted by X - Men @ 12:46 AM
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