Properly Setting Your Trading Goals to Lower Stress

John LockeGeneral Comments, John Locke, Trading Lesson, Trading Psychology, Trading Theory1 Comment

As traders we often set some sort of performance “goals”. We might say something like “My goal is to make $5000 per month trading”.

There are problems with that goal, the biggest problem being that we don’t actually have control over how much money we make in any given trade. We might have a lot of influence on how much we make. We could utilize a variety of resources such as a good trading plan and proper position sizing but ultimately the underlying asset has to do certain things in order for us to reach our goal. Things we cannot predict and things that we have no control over. Therefore, we do not have full control over the outcome.

So here’s the problem. When you properly set a goal followed by reinforcement with emotion and repetition, your unconscious mind takes this as a command from an authority figure and instantly goes to work on achieving that goal. And as it does, if you are not in control of that outcome, it eventually realizes this and you become extremely stressed.

To put it in perspective, can you imagine being given a command or goal from an authority figure that you must achieve, or else… and then finding out that you have no control over the outcome? How would you feel, uneasy, stressed out, a lack of confidence, like there is something wrong with you?

What if you told a child that they had to forecast the weather for next week and if the were wrong, that meant they were stupid and they’d lose their favorite toy? How do you think they’d feel? Wouldn’t they feel the same way?

Considering this, how do you expect to feel when you demand a result from yourself that you have no control over? Wouldn’t you feel the same way? Why would you do this to yourself?

Isn’t it much better to realize that “income” goal for what it is?

You see making a certain income from a trade isn’t really a goal; it’s more like a possibility. A possibility that may be very realistic and achievable if things go your way but may also be very unrealistic when certain events occur that are beyond your control.

A better way is to look at your target profit is as a “possibility” and then set up achievable supporting goals that are under your control to maximize your chances of that possibility happening.

For example:


  • Make $5000 this month trading. We have no control over this, it is only a possibility.

Goals supporting possibility:

  • Create best plan possible based off of available information
  • Identify entries and exits
  • Properly execute trades
  • Follow the plan

You have control over creating your plan. You have control over following your plan. You have no control over the outcome.

Understanding this and focusing your efforts on the things that you can control provides many benefits.

  • Confidence – you can’t always make money but you can always follow a plan.
  • Reassurance – if you followed your plan, you’ve done the best you could do. Give yourself a pat on the back regardless of the outcome.
  • Diagnosis – If you follow a plan that repeatedly doesn’t work, there is nothing wrong with you. Fix the plan! In contrast if you don’t follow a plan how will you ever know if it works?
  • Stress reduction – Stress comes from telling yourself that you have to be right about an unforeseeable event. This is the best way to put your mind into an endless loop of poor decisions resulting in fear and confidence problems. In contrast, you can be right every trade by following your plan, you may not make money but you will be right. This is a great way to gain confidence and reduce stress.

Have confidence that the outcome of your trade is not predicable and that you can follow your plan. Then follow it. If you find the plan doesn’t work, that’s not a problem with you; it’s a problem with your plan. Reward yourself for following the plan and then modify the plan and confidently follow the new plan. Then continue to modify it until it works for you.

This allows you to be confident and under control when trading. It allows you to properly determine whether you traded correctly and it helps your self-esteem which is much more productive than beating yourself up because you couldn’t predict the future.

For more information on properly setting goals and reducing stress while trading, click here to learn about our One on One Coaching and Trading Triangle Programs

Risk Disclosure

No relevant positions

One Comment on “Properly Setting Your Trading Goals to Lower Stress”

  1. Wow! This is very important point. I’m glad I’ve read this since right now I am working on writing down my trading goals for next 6, 12, 36 and 60 months. Thanks a lot!

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