Great Expectations – Part 4 of 4

Great Expectations Part 4 – Taking Aim

“A goal without a plan is just a wish.” – Antoine de Saint-Exupery

So many folks begin trading with only one focus. They have envisioned how they are going to spend wheel barrows full of money they will be making in little or no time at all. Soon they find out that such a dream is a complete fallacy and are demoralized by the reality that trading is difficult and perhaps they did not think through their approach to the markets.

What do you expect the market to provide? Do you treat it like a job? What is your level of commitment? Most traders would be fired from their current jobs if they used the same approach in their employment that they apply to trading. You go to work every day, follow your company manual, have a clear set of parameters under which you are evaluated, and you plan your future/retirement. In other words, you have goals – hourly goals, daily goals, weekly goals. Perhaps you may not have goals. At the very least, you have expectations of what your work life can provide and what you must provide in return to achieve your desired outcome. You know that your employer has companywide goals, forecasts, and rules to measure whether or not expectations are being met for the overall condition of the company’s health. You know your skills and performance must fit within these company-wide metrics for you to retain your job and receive the benefits of the company’s existence. The same approach should apply to your trading – or better yet, your “trading business.”

Why do so many traders enter the markets without the same job-like approach? Why are you trading? Have you taken time to evaluate what you consider to be a successful trader? Are you working from organized and planned benchmarks in your trading education and career? Have you written down a time line to establish when you have arrived at each milestone? Why not? You must adhere to a similar model to be successful at your job. You need to treat your trading like a job, a business, and have a business plan. For many of the reasons discussed in the previous posts, people simply don’t get it – trading is just like any other job – to get paid on a regular basis, you have to do the work within the scope of the defined objectives. The allure of trading is the perception that it is just the opposite – no work, easy money, and little commitment.

Why have goals? How else are you going to determine if you are making progress? How will you measure your success? Goals are a vital part of keeping track of your trading development. What goals have you set for yourself? Are they realistic? Are you committed?

“Whenever you want to achieve something, keep your eyes open, concentrate and make sure you know exactly what it is you want. No one can hit their target with their eyes closed.” Paulo Coelho

Think for a moment about your current situation in life and then look back. Is there anything you would have done differently? Could you have made better decisions? Did you procrastinate? Did you take shortcuts to avoid pain?

How would your life change for the better if right now you got serious about trading full time, committed to a realistic plan and executed it? Think about 5 years from now. What positive changes could you make for you and your family? What do you see as the benefits? The pitfalls? Write down that list and keep it front of you every day as you practice trading. Keep these things in mind as motivators as you work toward achieving your trading goals.

Think carefully about this . . . what if you did nothing? Where would you be 5 years from now? Is that a place you want to be?

If trading full time is your goal, you must develop a plan and strategy to get there. Because of the lack of boundaries in the market, trading requires more definition than a typical business or job. Therefore a clear set of objectives must be defined before placing our capital at risk. Your trading plan will set entries, stops and targets, but what about your goals as an individual? How will you support your lifestyle? How are you planning your future? If one of your goals is to trade full time or professionally, there will be a demarcation where you decide to transition from your “regular job” to trading full time. Is it based on a consistent income level? You need to decide what the trigger will be and be realistic about the timing.

You must take the time to thoroughly think through what is it you expect your trading business to provide, pick a time in the future when you’d like to achieve the cutover to trading full time and then work backwards. This is really no different than mapping your career in any other vocation. This step is essential to keep your trading mind in tune with your goals. Only you can draw this roadmap because only you will be able to evaluate if you are meeting your milestone deadlines. Consider sharing you goals and plan with your partner and have him/her involved in your journey. The transition from regular job to trading full time can be stressful if you do not have the support of your family. They must be on board with your plan.

Be prepared to make adjustments as you get better feel for timing and improvement. Nothing here is set in stone, so adapting your plan to your individual psychology and abilities will keep you on track. Do not get overanxious. It took you the better part of your life to get where you are in your current profession. This will not happen overnight and will be a good test of your patience and fortitude.

You will undoubtedly spend time in chat rooms and forums, reading how other traders are making 100’s of pips every day – do not get caught up in the hype! Stay out of the chat rooms and forums. They are full of losing traders. That’s why most of the 95% are there. They have not made a commitment, are taking shortcuts and are looking for everything free. From this moment forward, you are no longer part of that group! You have decided to become one of the 5% of winners that make money in the markets because you have defined goals, you are treating your trading as a business, and are committed to doing the work required to be successful.

You now have a better sense of the kind of effort necessary to become a successful trader. Hopefully you also have a better understanding and more realistic expectations about what is required to get there. The evolution from amateur to professional described in these articles had a common thread in some form among all of the professional traders I know. Their stories (and mine) are all virtually the same. They have all made mistakes, bought into the lazy, get-rich-quick approach, and lost money. They all had to decide they wanted to be professional, set goals and a timeline, make a commitment to do the work, and develop and execute their plan. One thing they also have in common now is the lifestyle and financial freedom trading can provide.

The passage to full time trading can be difficult and challenging. Not everyone will make it. It will test your patience, emotions and endurance. You will be frustrated, humiliated and enlightened. You will be forced to look inward. For the first time for many of you, you will take complete personal responsibility for your actions and decisions. There is only one promise I will make for those of you that bet on yourselves and get serious about this – it’s worth it.

“The only thing standing between you and your goal is the bullshit story you keep telling yourself as to why you can’t achieve it.” Jordan Belfort.

Your “Great Expectations” are what you say they are and what you want them to be.

The time to get started is NOW!

Rick

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