What Are Your Goals For 2021?

I recently offered a Three Minute Trading Coach video on the topic of setting effective trading goals.  Now that we're wrapping up the challenging 2020 year, it's only natural to think about goals for the year to come.  Here are several pitfalls that I'm observing among the traders I'm speaking with:

1)  Exhaustion - A number of traders understandably just want this year to be over with.  After the pandemic, crazy political gyrations, and shifts in market themes, many traders simply want a break.  Indeed, taking time off at the end of the year and renewing energy and focus is itself a worthwhile goal.  The risk, however, is that we so focus on the needs of here and now that we don't formulate powerful visions and goals for the coming year.  Once we've rejuvenated, it's important to perform a thorough review of the year, identify clearly what you did well and what needs improvement, and then set specific plans for growth in 2021.  Perhaps you want to expand the opportunities that you pursue in markets; perhaps you want to refine your network of colleagues to generate better discussions and ideas; perhaps you want to grow your risk-taking:  defining specific goals that excite and scare you will provide you with energy to tackle the new year.  The right goals and goal-setting *gives* energy.

2)  Setting Narrow P/L Goals - While 2020 was a difficult year for many people personally, it in fact has been a profitable year for many traders, especially shorter-term traders that benefit from expanded volatility and the speculative flows that have entered the stock market.  I'm working with quite a few traders who have had record years in 2020 and phenomenal monthly returns in November, as SMB recently shared.  It is only competitive human nature to want to build upon such performance and define even more lofty performance goals.  This can be a trap, however.  We don't know what the market environment for 2021 will be.  Could we have known in December, 2019 what 2020 would bring?  If we increase our risk-taking in the wrong environment, we could expose ourselves to quite a setback.  This is why setting process goals is more important than setting absolute P/L goals.  (See the upcoming Three Minute Trading Coach video on setting process goals). 

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Laura Jones 1 month ago Member's comment