Achieving Trading Goals

"There's no way of reaching trading goals,
so why set them in the first place?"

People who do not understand the methods used by the successful system traders think their trading goals are just targets they hope to reach.

But they are far more than just wishes, they are the very foundations on which the trader's system is built.

A professional trader wants to be sure his system is capable of producing results that meet his goals before he starts using it.

The whole process of system evaluation used by the professional trader begins with his personal trading goals for return and risk and these afterwards remain the base against which the remainder of his tests and assessments are measured.

So how does all this work?

Professional traders use methods which in all important respects are the same as each other.

For example, every trader has to know his own attitude to risk, which he will use to set trading goals - in number form.

These goals state the limit of risk he is prepared to take and the minimum return he requires for that level of risk.

His trading goals can then be used to find the risk resonance of any particular system he wishes to evaluate. The risk resonance will tell him the risk per trade at which he will operate the system if he decides to trade it.

Further processes are then applied to complete the evaluation of the system, after which the trader has all the information he requires for him to assess the suitability of the system for him.

So, as can be seen, the traders goals are much more than just wishes or
targets, they are objectives against which he will control his trading.

By setting particular goals, the trader is confirming that he would be comfortable to fully delegate to his computer any system capable of meeting these goals.

Follow your system is the first commandment of trading and if you are to succeed in this, you must be comfortable with it.

Every systems trader must understand the importance of setting his own personal trading goals and ensure that his trading method will be working towards achieving them.

 

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Copyright David Bromley 2006
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