Setting annual goals is very important for consistent growth as a trader. This is where you really start to operate with very clear structure and purpose. It’s what transforms you from a good trader into a great trader, and ultimately into a pro, which is why it’s called the Transformation Phase.

To become a great trader you have to get better at what YOU do, and the best way to do this is to annually revisit exactly what you do and why you do it, and especially how you can get better at it in the upcoming year in order to give the growth process some real structure.

Lay out your goals for the upcoming year in order to get even better at what you do. These goals should not be how much money you want to make. That’s much too general and result-oriented. Your goals should be specific and process-oriented so that your guidelines are practical and clear.

For instance, if you’re an options trader and you were patient with your fills last year then work on getting even more patient. Set guidelines like watching the bid and ask at least five minutes longer than you usually do before entering an order. If you’re a swing trader in stocks and you were disciplined at taking your stop losses and letting your winners run, set a goal to get even more out of your winners and work hard to achieve it. If you’re an intraday trader and have had more success on the long side than the short, work on a way to get better on the short side. Set a goal to learn how to read the tape.

On top of getting better at certain things there are always things we continue to struggle with and need to keep working on. Do you still struggle with following your plan exactly as you designed and tested it? Set a guideline to force yourself to leave your trading desk or actually sit on your hands when you consider taking action that is not in your plan. Are you checking off all of the items on your checklist before choosing a candidate for a trade? If not, set a guideline to not take any action unless all of the criteria on your checklist are met for each candidate.

What about your ability to let the markets guide you? How did the markets change last year and how did that affect your strategies? Were you able to properly assess the market environment for the most part and capitalize on it? If not, were there signs you missed that you should look for in future years?

Again, it’s not a good idea to have such general goals as how much you want to make in the coming year. But you can set goals to gradually scale up the capital allocation in your strategies or particular trades within your strategies that year. For instance, set goals to put more risk in your A+ (best) setups if you’re intraday trading or swing trading stocks and looking for the best risk-to-reward scenarios. These are more concrete, tangible goals and can lead to making more money without taking on unnecessarily high risk.

This is also a good way to set aside time to go back to those strategies that you never completely gave up on. You can set goals to spend more time on adding new strategies to your core approach as long as you vet them properly so that they fit into who YOU are as a trader. For instance, if futures trading never clicked for you but you’ve always maintained an interest, spend some time each week on it in order to determine if there is a time frame in futures with which you’re comfortable and whether it can be comfortably added to your core approach. But don’t add it unless it fits right in to your approach and lifestyle.

You have to remember that getting better as a trader is a process, and it’s a process that takes patience and perseverance. Without goal-setting you’ll never get as good as you want to be. And that can be the difference between a trader who just does okay year over year and a trader who builds up enough capital over time to retire and become financially independent.

When you work hard through the year to meet your goals, you get better and better at what you do. And when you actually achieve your goals, look out! Just let the markets try to force you out now! Always strive to get better and set annual goals with this in mind. 

Have faith that if you focus on the process and not so much on the result, the money will come.

Did I set goals and meet them consistently?

At first my goals were to make more money, but this never gave me specific things to work on. It just made me feel bad when I didn’t make more money.

So my goals changed to things like being more patient when working to get my option spreads filled, test new indicators for my volatility systems, test different automated strategies in trending stocks and build trade plans that more closely fit my lifestyle.

For 2020, I committed myself to getting better at reading my environment and choosing the right strategies and trade plans at the right time. I also committed myself to getting better – more confident – at sizing up when I see my best swing-trade setups.

Getting better at what YOU do in the markets should be a process-oriented endeavor. Again, have faith that if you focus on the process the results will come.