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Trading Psychology3 Essential Trading Goals for Long-Term Success — TRADING COMPOSURE

3 Essential Trading Goals for Long-Term Success — TRADING COMPOSURE

3 Essential Trading Goals for Long-Term Success

In this post, I want to talk about three trading goals that every trader should aim for.

Before we get into it, let me give you a little context…

A while back, I read an interview with a professional swimmer who had just competed in a major championship. 

He explained how he put in hours upon hours of practice and did his very best during the competition, but still ended 3rd.

Did he feel defeated?

Heck no! Even though he didn’t win, he was still celebrating because he had set a new personal record for himself.

Isn’t that amazing?

Think about this: if the guy’s only goal was to win, the outcome would have been disappointing to say the least.

But winning wasn’t his only goal –he was there celebrating among his peers because he achieved the goal of being faster than he previously was.

And that’s why he was so happy… despite having lost the competition.

Setting that PR (personal record) was a great accomplishment, and winning the championship didn’t matter as much as that goal. (His own words, not mine)

I remember having an epiphany as I read this article because the parallel with trading was so glaring.

Years ago when I begun trading, I understood the importance of having a strategy, risk management, and all that good stuff.

Still, I had trouble letting go of the mindset geared towards short term emotional gratification.

I placed trades with high expectations of winning, and when the market moved against me, I panicked, and my trading rules went out of the window.

That issue was recurring, and I knew I had to resolve it, but I just couldn’t get myself to do that.

This proclivity towards the short term seemed ingrained in me.

But this isn’t just me… this seems to be a human issue in general. We crave certainties and guarantees, and we project that onto things like the market, or even life.

Obviously, the pro swimmer learned to let go of this short term oriented mindset in order to perform at the level he was performing.

So, change is possible…

If you’re determined enough, you’ll make it happen.

That’s my personal belief.

Breaking My Trading Psychology Hurdles

As I worked on making that mental shift, I focused on three trading goals:

1. I focused on being flexible with my expectations and rigid with my rules.
2. I focused on trading well as opposed to making money.
3. I worked on appreciating my progress however small as opposed to feeling disgruntled at how long and rocky the journey to trading consistency is.

Once again, I made those my trading goals, went tunnel vision on them, and monitored my mindset during, before and after trading, making sure to cultivate ongoing stability of mind.

Make no mistake: this mindset work is not easy at all! It takes time. It takes dedication. But the results are palpable.

During this period, I broke many of my trading psychology hurdles.

This is what happens when you commit every… single… day.

It’s All About Neuroplasticity…

You see, our brains are constantly wiring themselves –based on what we repeatedly do, some habit patterns die off, and others get formed and are reinforced. 

This “neuroplasticity” is happening all the time. And when you dedicate yourself like I did, or like the pro-swimmer did, you’re taking a more active role in that process of neuroplasticity (that constant wiring) that’s taking place.

You’re actively choosing which habit patterns you want to let fall by the wayside, and which ones you want to cultivate and reinforce, instead of letting this whole process just happen mindlessly, on autopilot.

Now, I’d like to tie this line of thinking into another one, and it starts with a Zen story. If you’ve been following me for a while, you know I’m a sucker for those…

Here goes…

Practice makes Perfect ―A Zen Story

A singer was studying under a well-known but very stern teacher.

That teacher insisted that she rehearsed the same old song, day after day, month after month without being allowed to go any further.

Eventually, frustrated and fed up, the young woman ran off to pursue something else.

One day, she stumbled upon a singing contest. The contest had attracted some of the most talented people in the country.

Having nothing to lose, she entered the competition too, and, of course, sang the one song that she knew so very well.

When she had finished, her performance was highly praised and she ended up winning.

Despite the student’s embarrassed acquiescence, the organizers refused to believe that they had just heard a beginner perform.

“Tell us who your instructor is…” they said. “He must be a great master.”

The student later became a great renowned singer.

Interesting story, don’t you think?

The market too is a stern teacher. 

It keeps pushing us to our limits, and this can lead to a beautiful thing –mastery– even if in the short term this is not always apparent to us.

Look, success in trading doesn’t come right out of a box. And success is certainly not a straight line, because the market is not a straight line.

Success in trading comes from strategy, process, proper trading goals, and a mind that is as porous as a sponge, as flexible as bamboo, and as enduring (persistent) as a rock.

I Challenge You!

If you’re subscribed to this newsletter, chances are that you already know how to trade.

But you probably don’t know how to commit your mind to the activities and practices that build you into a winning trader.

This week, I challenge you to focus on the following three trading goals:

First Trading Goal:

Focus on being flexible with your expectations and rigid with your rules. And make it your priority to begin and end the trading week on a positive note, regardless of win or loss.

This means that you have to shift your perspective and not focus on making money but rather on trading well.

Consider subscribing to my Patreon. There, I share high quality meditations to help you cultivate ongoing stability of mind.

In addition to being a trader, I’m an experienced meditation teacher, and I’ve specifically designed these meditations for traders.

Second Trading Goal:

Focus on trading well as opposed to making money. With every trade, do your best to hit those two sub-goals:

– Proper position size
– Entry and exit according to your trading plan

You either go with your trading goals and plan devised rationally outside of market hours, or you go with your on-the-fly gut instincts.

If you go with the latter, you better make you sure you have ample market experience, or else you’re just trading off of random moods and emotions. And what you get as a consequence is random results. Please understand this.

Third Trading Goal:

Work on appreciating your progress however small.

And compare your performance to itself, not some arbitrary benchmark, or some dude on Twitter who’s up 2000% for the year. That’s him. Great for him. Now ignore it. Focus on you! Every day. Over and over again.

Thank you for reading. I hope you reflect on this short piece and realize (as I have) the importance of process, of learning, of dedication, and proper attitude.

If you can come to realize and focus on these three trading goals, you’ll inevitably turn into the profitable trader you wish to become.

Wishing you a productive week in the market,


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