According to 'New Years Resolutions Statistics', 52% of people who set
resolutions were confident of success at the beginning - only 12% succeeded in keeping them.
Sticking to your trading resolutions can be challenging, but it's also crucial for improving your
success in the markets. What’s required is a combination of clear goal-setting, discipline, and continuous self-evaluation. Here are some best practices to help make your trading resolutions stick:
Be SMART: Set Specific, Measurable, Achievable, Relevant, and Time-bound goals. "Make more money" is vague, while "Average a 10% return per month with 2% maximum risk" is SMART.
Create a Plan: Instead of goals like "earn a million," focus on actionable behaviors like "practice paper trading twice a week" or "review my market thesis daily." Break down goals: Divide long-term goals into smaller, achievable milestones to track progress and maintain motivation. Then set specific targets such as “increase my trading account by 10% in six months”.
Maintain Discipline: Develop a trading routine and stick to it. Adhere to your trading plan and risk management rules, even when it’s tempting to deviate. Learn to manage your emotions, particularly after a loss or a win, as these can cloud your judgment and lead you away from your trading plan.
Start small and build gradually: Don't overwhelm yourself with drastic changes. Introduce new habits and strategies one at a time. Reward your milestone achievements. Gain confidence from small steps moving in the right direction.
Use Technology: Utilize trading tools and platforms to add value to your efforts that enable you to focus more on the SMART goals and actions. Leverage tools that help you take the guesswork and emotion out of your trading decisions.
Keep a Trading Journal: Document each trade, including the rationale behind it, the outcomes, and any lessons learned. View each mistake as a learning opportunity, not a failure. This helps in maintaining discipline and identifying patterns in your trading behavior. Regularly review your trades and overall strategy and adjust as necessary.
Be Patient: Trading is not a get-rich-quick scheme. Accept that it takes time to learn and grow as a trader.
Remember, consistency is key! By planning effectively, implementing routines, maintaining a positive mindset, leveraging powerful tools, and learning from experience, you can significantly increase your chances of turning your trading resolutions into lasting success.