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What are your goals in trading?
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What are your goals in trading?

  #1 (permalink)
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What are your goals in trading?

I just posted a response in the Time to give up thread and part of the response dealt with my goals in trading. Realizing it didn't quite fit for the topic of the thread, I redacted that part and decided it would be good to start a new thread on this topic. I've found a few threads on specific daily trading goals, but nothing on longer-term trading goals.

The short answer to this question, obviously, is to make money. But how much, and over what period of time? Most of us here work a non-trading job and dream of making trading our sole source of income, and building wealth through it.

But some may be content simply to trade part-time just as a supplement to their income, or maybe to meet a specific financial goal like paying off the house or saving for children's college tuition.

If you want to quit your job, do you want to do that in a year? Five years? Or is your trading more of a retirement plan where you're not in a big hurry to quit?

Do you think your goal is realistic? Have you taken a hard look at your returns, max drawdowns, and ability to replace the income you make now? How much will your standard of living increase in the coming years?

My goal is kind of a mixture of wanting to quit the day job and building a retirement fund. I'm pretty happy with my non-trading job (attorney working for myself) but I do dream of trading for a living. To do that would probably take five years. My trading system is longer-term with big drawdowns, so I think it will take me that long to build my account to where I can replace the money I make now. Although by then I could be making a lot more than I do now, and my standard of living will keep going up, so maybe seven years.

Currently I pay my assistant much more than I make as a trader, and honestly right now I could make more money cutting grass or working fast food than I do trading soybeans or gold. But in the next year or two that should change.

Someday, and that day may never come, I'll call upon you to do a service for me.
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Do you think your goal is realistic?

That is the main question.

Personally my goal is 20% return on capital per year. I'm well capitalized so 20% more than pays for my lifestyle. To date I have been able to accomplish this with our too much trouble.

One thing of interest is that I have gone from day-trading e-minis to swing/long-term trading stocks and have been able to achieve the same goal with way less stress and screen time.

It is hard to find the Truth when you start your search with a preconceived notion of what the Truth will be.
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deaddog View Post
That is the main question.

Personally my goal is 20% return on capital per year. I'm well capitalized so 20% more than pays for my lifestyle. To date I have been able to accomplish this with our too much trouble.

One thing of interest is that I have gone from day-trading e-minis to swing/long-term trading stocks and have been able to achieve the same goal with way less stress and screen time.

That's the way to do it. That's where I hope to be in a few years. Currently I'm shooting for 40% which I'm on pace for but I understand that as my account grows the chance of my behavior changing also increases. It's not the same to stomach a 20% drawdown on 50,000 (which I've done) as it is with 500,000.

Someday, and that day may never come, I'll call upon you to do a service for me.
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I am under the influence of Scott Adams these days (as per "How to Fail at Almost Everything and Still Win Big")

Systems not goals.

Goals are for losers.

So I am focusing on my System, on following it with discipline, and on constantly improving it.

Meaning my System in an overall sense, not just the specific trading system that my trading operations are based on.

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suko View Post
I am under the influence of Scott Adams these days (as per "How to Fail at Almost Everything and Still Win Big")

Systems not goals.

Goals are for losers.

So I am focusing on my System, on following it with discipline, and on constantly improving it.

Meaning my System in an overall sense, not just the specific trading system that my trading operations are based on.

Sounds like your goal is to develope the discipline to follow your system.

Or maybe just to develope a system.

Reguardless it seems you have a goal, you just haven't defined it as such

It is hard to find the Truth when you start your search with a preconceived notion of what the Truth will be.
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Yes, it is paradoxical. And it is a matter of semantics.

The Scott Adams concept is that the problem with goals is that once you get there, what are you going to do next? Once you get that orange Lamborghini. You can get sortof lost once you have achieved your dream, so it's better to focus on the system. Just focus on doing the process very well and become independent of the outcome.

Outcome independence is one of the qualities that I want to cultivate in myself, so that's another aspect of this.

I need to have milestones or clearly defined intermediate targets, as an aspect of the system. Once I reach the milestone, I immediately look ahead to the next milestone. It's like the string of black barrels at intervals that they navigate by to get across the sand of the Sahara desert.

For instance, as for trading, I have 3 milestones: Net Liq number of XYZ (which is for the next 12 months), Tier 3 options permission (in the next 12 months) , and intermediate options trader level of ability. These are all part of my overall goal of running my fund as a good business as part of the overall project of my life.

I write these milestones down in my journal every morning.

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suko View Post
Yes, it is paradoxical. And it is a matter of semantics.

The Scott Adams concept is that the problem with goals is that once you get there, what are you going to do next? Once you get that orange Lamborghini. You can get sortof lost once you have achieved your dream, so it's better to focus on the system. Just focus on doing the process very well and become independent of the outcome.

Outcome independence is one of the qualities that I want to cultivate in myself, so that's another aspect of this.

I need to have milestones or clearly defined intermediate targets, as an aspect of the system. Once I reach the milestone, I immediately look ahead to the next milestone. It's like the string of black barrels at intervals that they navigate by to get across the sand of the Sahara desert.

For instance, as for trading, I have 3 milestones: Net Liq number of XYZ (which is for the next 12 months), Tier 3 options permission (in the next 12 months) , and intermediate options trader level of ability. These are all part of my overall goal of running my fund as a good business as part of the overall project of my life.

I write these milestones down in my journal every morning.



You are right it is a matter of semantics. You look at an overall goal and break down the steps to get to that goal into smaller goals that are measureable and reasonably achievable. How else would you be able to measure your progress?

You have 2 well defined objectives but how do you determine your level of ability?

It is hard to find the Truth when you start your search with a preconceived notion of what the Truth will be.
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>>how do you determine your level of ability?


I have never come up with a verbal description of "intermediate options trader."

In a fuzzy sense I would say "has a thorough familiarity with the theory if not the fine points of options and good grasp of volatility, effortless skill at managing trades in all the basic strategies, good level of ability to run a non-correlated delta neutral portfolio. Has executed at least 1000 trades."

Let me state the numerical target. For the cash-traded part of the portfolio the goal for the current year is 62%, for the options traded part, the goal is positive above the resorts by one penny and a positive win/loss ration of better than 60%.

Also, although this is not stated in my major system goals above, I aim for absolute, 100% compliance with the rules of the system, and zero fatfinger incidents.



I will get there next year.


Last edited by suko; October 17th, 2016 at 02:25 AM.
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I follow a "systems" system of life and I was pleased to find that trading fitted neatly into it.

My goals have been to perform well and I keep what I catch as it were rather than a fixed target. As @suko says, fixed goals have a post-goal-depression effect, though occasionally an OMG that hell is over elation haha.

Since teenage years though I've traveled extensively spoken to the wise men on mountains, in lakes, by rivers and occasionally selling ice cream it always came back to roughly what the ancient Greek philosopher Epicurus distilled back in the day. Much of his writing was lost so known about via the accounts of others but whether a pastiche of ideals or not it does serve me well.

So many summaries but this seems ok Epicurus and Happiness

So my trading system is to be happy, be content with enough and trade as best as I can. The net effect has been very profitable for me, more so than my IT career before and fewer chest pains on Friday. I always worked very hard. It is however easier to be social now the pall of near endless exhaustion driving across country to clients etc. is lifted as a retail trader. The system is more elegant than ever before.

"Epicurus makes the following claims about human happiness:
  • Happiness is Pleasure; all things are to be done for the sake of the pleasant feelings associated with them
  • False beliefs produce unnecessary pain; among them, that the gods will punish us and that death is something to be feared
  • There are necessary and unnecessary desires. Necessary desires, like desiring to be free from bodily pain, help in producing happiness, whereas unnecessary desires, like desiring a bigger car or a more luxurious meal, typically produce unhappiness
  • The aim is not the positive pursuit of pleasure but rather the absence of pain, a neutral state he calls “ataraxia,” which is freedom from all worry, often translated simply as “inner tranquility.”
  • This state of ataraxia can be achieved through philosophical contemplation rather than through pursuit of crass physical pleasures
  • Happiness is not a private affair: it can be more readily achieved in a society where like-minded individuals band together to help inspire one another’s pursuit of happiness. "

I should add however that nothing is perfect. I'm still someone who varies between soft and stone hearted. I know my myself and my extremes now though so I don't worry about going over the edge with compassion or fury. I recon that all just came naturally around 36ish and would have happened regardless of my search for a more admirable life.


Last edited by Rory; October 17th, 2016 at 10:15 AM.
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