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Goal Setting

Competitive goals can lead to burnout. Michael Jordan who is a compulsive competitor, exhausted himself in continually reinventing new ways to spark the fire in his enthusiasm.

Destination goals, such as, “I’ll get to this particular place by x date” tend to be difficult to maintain since the reward exist in the non-existent future.

Process goals, are increments of cumulative experiences that instantly offer rewards in the present of now. For example, when I first started day trading, I made no attempt to make a lot of money immediately. My immediate goal was to learn market dynamics without suffering major financial losses.

I convinced myself that once I learned how to not loose money, probability favors my chances of starting to make money!.

This approach allowed me to (1) maintain my self-confidence, (2) stay in the game without capital blow-out, (3) develop a non-emotional response to rapid fire decision making, (4) handle small draw down with minimum psychological upheaval, (5) visualize the feeling that I will be doing this for the next 50 years, and (6) secure the knowledge that my journey was a life long commitment to learning.

I believe it is good to set smaller challenges that generate rewards in the present and not in the non-existant future and let the long term goal of consistence of profit flow naturally from a great set of process actions, such as system design, indicator design, system testing, placement of trades, etc.

“It is the very foundation of strategy to be able to adapt to any situation and continue fighting without losing heart. You gain this ability by practicing day in and day out with intensity.”
–Miyamoto Musashi

Have the proper mindset

Trading is not for everyone.  There certainly is a high burnout factor among professional traders due to the stress involved.  Think of the markets as various shark tanks, with a certain number of sharks fighting for those scraps of meat.

Some of the work personality traits that will help you succeed over the long run include:

Having a thick skin, being able to remove emotions, ability to think clearly in the moment when all hell is breaking loose, attention to detail, pattern recognition, analytical mind, aversion to gambling for gambling’s sake, creative and innovative thinking.

These can be developed through experience, although some certainly have these more “ingrained” in themselves from the beginning.  Having a full life outside of your trading is also important – the ability to “switch off” and not take your trading results home with you each day will lead to a longer and happier trading career.

To Make HUGE Profits, You Have To Think SMALL

Profit abstractThe more i trade, the more i realize that trading with big size is just stupid. Sure, you  will have your occasional huge win. Sure, there are a rare times when trading with size is good to capitalize on ‘easy’ trading setups but i believe that 95% of the time trading with size will surely lead to over trading, micro managing, flinching at the smallest wiggles, lead to emotional decision making, stressful trading and burnout.Trade small positions and you will see how you will think more clearly, you will stay objective, you will stay calm under pressure, you will trade less and ride out bigger
trends for more ‘profits’. Small positions will not bank you the thrilling homerun but they will accumulate into your account at the end of the month/year. Large positions will give you a homerun from time to time and they will eat your lunch from time to time too and at the of the day, you are left wondering ‘what happened’??So, trade small positions and stay unemotional!

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