What’s your end game?
So what’s your end game? Why are you doing this and what financial outcomes do you want to achieve in 2 years time? Let’s get specific because unless we do you’ll end up getting lost in the crowd and likely gobbled up by the market as you chase profit without a specific approach.
If you say to me that you are only doing this to make as much money as you can that’s not the answer that will lead you to anything meaningful. That’s like a football team saying we are going to win as many matches as we can this season. Our goal is to make finals! Yeah but what is the game plan, how are you going to structure your attack and defense and what tactics are you going to use to beat the top teams? It’s no different with your trading you need to be far more specific than just “I’m going to make as much as I can”.
Yes, we all want to make lots of money but let’s get a little specific for a moment and let me share with you one way to approach a realistic outcome. You need to write something down such as the following: “To achieve my desired outcome I need to earn a 30% return on investment in the coming 12 months and the trades that I am going to take to give me the best chance of making 30% are these (and list them). To minimize my risk I am going to ensure each trade does not risk more than x%.”
My experience tells me that taking an approach to only copy others trades, learn nothing and just try and make as much money as you can won’t work. Sure you can copy the trades, but what trades, do you know what the trades are based on, why they are taken, how many of those trades are taken on average each week and what sort of risk v reward do they have over time? If you do you will highly likely behave appropriately but if you don’t you risk behaving poorly as a “follower”.
These are questions that must be answered. Remember on Friday I said trading is a numbers game and understanding the trade numbers is an important element to a sustainable and meaningful outcome.
We will soon be announcing the venue for our annual 2-Day Professional Trader Boot Camp, which this year is in Sydney on May 13th and 14th.
One trade at a time. Go get ’em!
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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