The goal of novice traders

When you start trading, there will be many questions. With all the information, it can be difficult to decide where to start. Setting goals can help, but novice traders often set the wrong type of goals. As a novice trader, your initial goal should help you make money eventually, but making money should not be your goal. Instead, choose to develop initial goals regarding the process and imitating the characteristics of professional traders.

Set goals for the process, not the results

Initially, the trader wants to set a numerical goal: “I will earn 1% from my $30,000 capital every day”, or “I will earn 30% every year”. Although it may seem simple, to truly reach a specific percentage or dollar target, you need to improve your marketing methods and hone your discipline. By entering the market and expecting to make a certain amount of money, in the long run, this goal is almost impossible to achieve. These types of goals require traders to truly understand the capabilities (and limitations) of the trading plan they adopt, not just think they understand.

Depending on the method used, the dollar or percentage target may not be reached, but it may still be effective and provide good returns. Therefore, traders must either abandon the strategy or deviate from it in an attempt to obtain more profits. For many traders, this becomes an endless cycle of abandoning strategies after another. Looking at the chart after the fact makes trading look easy, but the trader knows it is harder than it looks. Novice traders need to understand not only the market, but also themselves.

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Just like any other business, to be a good trader, you must focus on a reliable process. The result will not appear immediately. It takes a long time for most companies to make a profit, and many companies fail completely. Trading is no exception. If you don’t understand how the market really works and formulate a winning process, the results will be based on opportunities, not skills.

To build a successful market transaction process, try to use these three goals.

Always have a plan

In business school, you are taught that to start a business, you need a business plan. Trading is a business. Therefore, every time you trade, you must trade according to a well-thought-out and calculated plan.

The plan should include how to enter and exit transactions and how to manage funds. The plan should be very detailed, outlining the market to be traded, risk parameters, whether to use filters for trading signals, the composition of trading and exit signals, position size, the market environment that will be traded, and how to determine the trade, such as scope or trend.

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Therefore, the goal here is to develop a complete plan before making another transaction.

Learn not to trade

Especially when the target is a specific dollar amount, even if there is no chance, the trader will work hard to achieve the target. The market does not always provide statistically possible trading opportunities, and it is usually better to sit on your hands or watch TV than to trade. Most people are not satisfied with this. They want to do something constantly. In the market, this may slowly (or quickly) erode profits gained during good trading periods.

Trading at a slow time or impulsive trading outside the planned range is a very common problem that deserves special attention. Let one of your goals be as self-disciplined as possible and only conduct the transactions listed in the plan.

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Keep things simple

Complex strategies can be very tempting. Many people believe that because something is complicated, it is more likely to work. Avoid being too fancy about your analysis and trading strategies or making winning trading plans more complicated-usually this will only undermine its profitability. If you like the stock market, please insist on trading stocks. If you like currencies, then trade foreign exchange. At the beginning, only focus on one market and a few simple strategies.

The goal here is to avoid constant patching to improve performance, or constant conversion of markets, strategies, or analytical methods. Stick to planning. If you need to make a slight modification occasionally, that’s great, but keep the modification simple and avoid becoming too complicated.

Bottom line

In the beginning, be a niche trader who focuses on some manageable goals. If you trade according to the trading plan, instead of trading when there is no chance, and avoid becoming too complicated, then the results will appear in time.

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