Effectiveness of Goal Oriented Trading
Setting trading goals can be a useful endeavor to help traders navigate the market, but setting only some goals is more useful than others. In this section, traders will look at the right and wrong types of forex trading goals to aim for. Why proper goals make sense in the context of a trader's trading plan, and how to track progress of a trader's goals.
In contrast to results-oriented goals, process-oriented goals are more useful for helping traders follow a trader's trading plan. Creating goals that support a trader's plan can help a trader stay focused on the details that lead to good trades.
One way to do this is to think of the process that follows like an 'If, then...' statement' - 'If this [event] happened, then I would do this.' For example - 'If EUR/USD pulls back to a certain price level and shows a major reversal bar, then I will enter a 'long' position. There could be a number of criteria depending on the trading style of the trader, but the point is to pay attention to doing the right thing according to the trader's plan.
If the trader adheres to the trader's own rules, regardless of the outcome - win or lose - this is success in trading. If the trader has an advantage with the right risk management rules (another set of rules/goals), then the trader gives the trader the opportunity to make profits over time.
One should not think of profitable trades as 'good' trades, and unprofitable ones as 'bad' trades. Traders can open 'good' trades and still lose (as many will do), and 'bad' trades and make money. Keep in mind, bad habits that lead to favorable results are negative reinforcement, and vice versa, good behavior can be said to be positive reinforcement. Traders want to make sure that traders focus on the latter.
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