(scroll down for screenshots of each day’s trades)
Trades: 2 / Winners: 2 / Losers: 0 / Break Even: 0
[wp_lightbox_anchor_text_display_external_page link=”https://www.forexistentialist.com/wp-content/uploads/2015/03/ROBOS_RESULTS_2015-2percentRisk.htm” width=”640″ height=”728″ class=”center_text” text=”2015 Progressive Results at 2% Risk“][wp_lightbox_anchor_text_display_external_page link=”https://www.forexistentialist.com/wp-content/uploads/2015/03/ROBOS_RESULTS_2015-5percentRisk.htm” width=”640″ height=”728″ class=”center_text” text=”2015 Progressive Results at 5% Risk“][wp_lightbox_anchor_text_display_external_page link=”https://www.forexistentialist.com/wp-content/uploads/charts/backtests/ROBOS_2013-2014.htm” width=”640″ height=”728″ class=”center_text” text=”Jan 2013 – Dec 2014 Results at 2% Risk (2% TP)“]
So you’ve decided to trade full-time. You’ve proven to yourself that your strategy is viable – hang on, not just viable, let’s be honest, it’s been going gangbusters! On Monday you’re going to front the boss and give him notice. At last you’ll be working at your dream job as a real professional trader, and all of those daily commutes to the office will just be a thing of the past.
Well yes, there is the small problem of first having to break it to your wife, and yes, you know how she’s going to respond. “How do you expect we’re going to live if you quit your job? We’ve got two kids at school, and a mortgage. We need at least $100,000 a year just to maintain our current living standards,” you anticipate her protests.
You rehearse your lines: “Don’t worry darling, it won’t be a problem. I’ve been making around $2,000 a week for the last couple of months, just from trading alone. I have it in the bag. Check the bank balance! I reckon by adding a few contracts, I can easily rack up my profits to at least $500 a day. That’ll give us cash left over for that river cruise down the Rhine that you always wanted.”
But whoa boy! Let’s pull back a little and look at this from a realistic perspective. Setting high-proficiency goals is a great way to motivate yourself, and keep track of your performance, but basing your entire lifestyle (and that of your family) on a specific daily target will force enormous pressure on you to deliver. Sure, you’ll probably make $500 on some days, maybe even $1,000, but can you realistically do it day in, day out? What if the markets don’t suit your strategy on any given day? What if the markets are quiet ahead of an important economic announcement, and then become too volatile to trade when the news is announced. What if you have a whole week of such news events?
Commonsense suggests that it’s not a good idea to believe that you can be a winner every day, or even every week. Market conditions can often make it unsuitable to even open a position. On some days it can be a better strategy to avoid trading completely, rather than attempt to enter low probability setups. Even if you do have the skills to make $500+ a day, setting your goals based on a premise that you can do it EVERY day is not the best way to develop a long-term financial plan.
For instance, what do you do if the first two days of the week yield only $250 profit – a quarter of your two-day goal? By Wednesday, you’re going to be under intense pressure to make up the money you need to stay on track. How will you react? This sort of pressure usually leads to emotion-based, ‘catch-up’ trading, which in turn can result in poor decision-making and further failure. Losing days can stretch into losing weeks, and before long you find yourself back looking for a job, frustrated and depressed. Not only has your wallet taken a beating, but also your ego.
So what’s the answer? Well, setting more realistic goals is one way to minimize stress and prevent frustration. Don’t get me wrong, it’s not a bad idea to have a monetary reward objective, but flexible weekly and monthly targets are more sensible than daily targets. Pushing yourself to achieve unrealistic goals is usually counterproductive. Allowing for down days will relieve pressure and help you keep you motivated. Building wealth gradually, rather than relying on a specific daily dollar amount, is a far more enjoyable way to trade. And if you’re enjoying yourself, you’re more likely to make logical and realistic trading decisions.
Setting goals is essential to achieving success, but goals are useful only when they match your skill level. Targeting goals that go beyond your current skill-set will not only frustrate and depress you, but will more than likely force you from the market altogether.
Personally, I’ve found that using the Weekly Profit Projection spreadsheet on the Free Trading Tools link of the website gives me a clear idea of how well I’m achieving my goals and whether I’m ready ramp them up, or pull back on my expectations. This knowledge is essential (for me at least) in order to stay on track and prevent the emotional rollercoaster that often besets new traders.
Check out last week’s trades below…