When it comes to trading, a goal is paramount to success. Different traders establish different goals to coincide with why they started trading and what they expect out of trading.Traders like Shawn Lucas, for example, trade for their sole income and his goal is to make a certain percentage of his account in about one hour. This allows him to live on just trading. Other traders prefer a longer term investment approach and set money that’s currently not needed into a market so that when the time comes, that money will have grown substantially and can be used for retirement. There are many goals in between these and finding yours is the first step to becoming a successful trader.
Trading as a sole source of income is not a short-term goal. So, when you’re first starting out, smaller goals with the end all of income replacement is the path to take. Most traders start with the goal of making a certain amount of pips per day. This goal has many benefits. First, it allows for a certain amount of time spent in the market. This way, if you only want to trade two hours a day to replace your income, you can be used to making so many pips in that time frame. Second, as your account size increases, if you use more lots, those same pips become more profit. This method allows for the regular schedule and a steady increase of daily earnings as you’re able to increase your lot size.
The other popular goal method is percentage return per day. Very similar to pips per day in the fact that as your balance increases your lots per trade can increase and your percentage can increase, this one can be harder to maintain over long periods of time. 2-3% per day is not as easy as 100 pips per day. A benefit that this technique has over the pips per day is certain strategies, such as the Wobble Technique that Shawn Lucas uses, includes a varying lot size, so 50 pips is not as clear cut in terms of profit as 1.72%. Also, when using certain strategies, this means you can have negative pips and positive profit. These are usually goals that are set up once an established trading strategy is in place.
Other goals, aside from profit-driven, can be as simple as just wanting to learn a new task and have a little side income at times. This isn't to replace a full-time job and you aren’t staking your mortgage on it. Individuals with this goal are typically a bit more lax with their strategy and approach. This type of plan allows for a lot more exploration in the beginning and is a great goal to start with. Traders can experiment with more indicators and combinations of such, they can see if a chart reading approach is more so for them, or can just try different pairs that many individuals who are looking to jump straight in may not experience.
Whether looking for income or just a hobby, setting a goal for what you want to see done in a certain amount of time is important to trading. A plan of action and goal should be recorded and checked back every so often. This rechecking on your goal is not to regress any progress you have made; It’s quite the opposite. It’s to see your initial goals and how you have developed as a trader. If your goal was to make 30 pips a day or to make 0.75% a day and you’re exceeding that, there’s no need to dial it back. Change your goal for the better. Push yourself to be the best trader you can. This way, even if your goal in the beginning was to just learn a new skill, you may find that you’re approaching a level where this is a plausible career for you. Either way, find a plan that works for you with the time you have available to start, whether a Shawn Lucas approach or a Warren Buffet approach and see how you evolve from there!