What You Need To Know When Setting Your Trading And Investing Goals
“Is there a particularly good way to set your trading and investment goals?” For trading and indeed for all areas of your life, there are two crucial elements in goal setting and attainment. First the perceived difficulty of the goal and secondly how specifically you state the goal. These two elements will play a large part in determining whether you will achieve the goal.
The more perceived difficulty in the goal and more specific the goal is, the more likely you will raise your level of performance to achieve your goal. This is because with these two elements of challenge and focus, people are more likely to try harder, achieving a higher performance which produces better overall results.
So with a trading/investing goal example to earn $50,000 for the year, a more difficult and specific goal may be $51,600. If your brain perceives $51,600 yearly earning as a more specific goal than $50,000 yearly earning then you are more likely to raise your performance to achieve your goal of $51,600.
A lot of people think you should set easy goals. Not so. The best goals are difficult goals that are specific. Goals should be difficult and specific. So if you believe that your trading goal of $51,600 is easily achievable then raise it to a level that you believe will be more challenging, perhaps $72,400.
Don’t be unrealistic though, as you are more likely to perform if you believe you can achieve your goal. Base your goal on your knowledge, training, skills and past experiences. If you know it can happen, that you can make it happen, then your performance can increase.
As you work towards achieving your goal, your belief in the importance of achieving your goal will make you more committed to your goal. As you assess your progress you will be reinforcing your commitment when seeing results. This will strengthen your performance to achieving your goal.
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.
Often when we start off in trading/investing we do not set goals. Often we’re just happy to see ourselves make some money. This unfortunately is not specific or difficult – it is not going to challenge or focus your performance.
So, why not think through your trading or investing goals. Set yourself an attainable, but difficult specific challenge and measure your progress. You will be amazed how you feel about your results.
Kevin Hogan talks about “the least acceptable result” in his book “The Psychology of Persuasion”. Your least acceptable result is often the true goal that people achieve from any activity – what is your trading/investing least acceptable result. Make your least acceptable result your goal and watch your trading/investing performance results.
Learn more about how to trade shares with Just Shares and visit our website where you can find out all about Just Shares’ share trading course and how Just Shares can help you be successful in trading shares.
categories: share trading, stock market, investing, share market, finance
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