Why Setting Trading And Investing Goals Can Improve Your Trading/Investing Performance
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.
In a trading example a goal to earn $50,000 next year through your trading activity is good. However, a goal to achieve, say $51,600 will likely produce better performance as it is perceived by your brain 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.
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.
Seeing progress in share trading can be from something as straight forward as a running tally of your earnings year to date. You want to earn $72,400 from your trading this year. You see yourself at $38,100 in July and you know you are well on your way based upon simple arithmetic.
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.
Think about your trading goals. Set yourself some specific, difficult and measurable trading goals and understand why you want to achieve them. Then start measuring your progress.
In his excellent text book "The Psychology of Persuasion", Kevin Hogan talks about "the least acceptable result". What is your LEAST ACCEPTABLE RESULT from your trading? Think about this very carefully because this is the true goal that most people WILL achieve from any activity. You must move your Least Acceptable Result up to the level of your goal. - 23218
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.
In a trading example a goal to earn $50,000 next year through your trading activity is good. However, a goal to achieve, say $51,600 will likely produce better performance as it is perceived by your brain 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.
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.
Seeing progress in share trading can be from something as straight forward as a running tally of your earnings year to date. You want to earn $72,400 from your trading this year. You see yourself at $38,100 in July and you know you are well on your way based upon simple arithmetic.
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.
Think about your trading goals. Set yourself some specific, difficult and measurable trading goals and understand why you want to achieve them. Then start measuring your progress.
In his excellent text book "The Psychology of Persuasion", Kevin Hogan talks about "the least acceptable result". What is your LEAST ACCEPTABLE RESULT from your trading? Think about this very carefully because this is the true goal that most people WILL achieve from any activity. You must move your Least Acceptable Result up to the level of your goal. - 23218
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posted by X - Men @ 10:41 AM
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