What Are Realistic Goals for a Forex Trader?
Goals are an important part of achieving success in anything, forex trading included. However, goals can be tricky because people usually set them too high, out of the realm of what’s realistically achievable in an acceptable amount of time. For example, having a goal of ‘becoming a full-time trader’ is not going to do you any good if you don’t know HOW to trade properly. Whilst it’s good to have lofty long-term goals, you will not achieve them if you don’t break them down into shorter-term, more realistically achievable goals. Doing this will keep you motivated and focused whilst also keep you progressing toward your longer-term goals.
Where most traders get lost, is in setting the bar too high right out of the gate and then getting discouraged six months or a year later when they have nothing to show for it. This happens because they aren’t being realistic with their goals. Let’s discuss some realistic trading goals you should have so that you can stay focused, motivated and on-track…
Learn how to trade properly, with no expectations
Whilst I appreciate that not everyone is a beginning trader, this first point applies to those who are just starting out learning the trading craft.
The first goal you should have is to trade your account to learn, not to make money. Learn as much as you can so that you don’t lose your money, leading to faster and longer-term success.
First of all, this doesn’t apply to everyone of course. However, if you’re a novice trader who is just starting out, it would be wise to not expect to make a lot of money or an ‘income’ from trading. These early years are your training period, your pursuit of education as well as screen-time and the ‘school of hard knocks’ will probably result in you breaking even or even in a small loss if you are trading a small account.
So the lesson here is, as a beginning trader, a realistic goal is to trade your account as a learning exercise and not just for the intent of making a profit. Just as with any other profession, be it sports, business or other, you can’t expect to walk out, learn a bit and become a professional overnight.
Don’t aim to make a living right away
Once you’ve done some study and have practiced trading for a while, when you’re comfortable to start increasing risk per trade, whether this means a transition from demo to live, or moving from risking $1 to $100 per trade, your objective is not to make a ‘full time income’, let me explain why…
Most people will be starting with an account under $5,000. To put this in perspective, you’d have to make a 1,000% return on that account per year to make a living. Having a realistic goal would be turning slow and steady gains; hitting ‘singles’ and ‘doubles’ to build up your account. A 50% to 100% return per year would be realistic return if you’re hitting the numbers. The aim is to make profit but not to ‘make a living’ yet, so don’t have the wool pulled over your eyes by thinking you’re going to print money like a job.
The reason why you should not aim to make a living is pretty obvious…you don’t have the money or the skills yet. As I explained above, you can’t make a living on a small account, but you can and should try to build it up. The trading mindset that you need to successfully build up a small account is going to be impossible to achieve and maintain if all you’re thinking about is hitting ‘home run’ trades every time and ‘getting rich’. You will over-trade, over-leverage your account and likely blow it out; which is obviously the opposite of what you want.
Aim to become a part-time trader.
As we mentioned above, most people can’t and won’t achieve the status of full-time trader in the early part of their career. So, a great goal is to focus on becoming a part-time trader and earning a nice profit while still maintaining your day-to-day income. There are many benefits to this and to learn more about it check out a recent article I wrote on part-time trading.
Be the best trader you can be.
Whether you’re a beginner or a seasoned trader, you should have a goal of putting your focus on the process of trading and becoming a good trader, not on your account balance. This goal is more applicable to your subconscious mind, because you have to train yourself to be focused on the trade setup, the price action and the overall chart picture, as opposed to the money and profits that so many traders become fixated on.
As I discussed in the article ‘Focus on the trading, not the money’, a trader should focus on the actual process of trading, not on profit and rewards. The main reason for this is that the only way you can become a profitable trader is by becoming a skilled trader, and you cannot do that if you’re too worried about ‘making money’, because you’ll become emotional.
Be a market observer more than a trader
Another realistic goal you should have is to stay out of the market as much as possible and only trade those trade setups that will yield high-probability results. As your goal, stay away from the market when there’s nothing going on and observe more than you trade. This is similar to my sniper trading and crocodile trading approach.
The main idea here is that most traders lose money because they over-trade; they are simply in the market too much. This causes them to both lose money because they are entering bad trades and it makes them emotional as a result, essentially starting a snowball effect of bad trading habits which you obviously want to avoid. It takes discipline and patience to sit out of the market the majority of the time and only enter when your trading edge is truly present, but this is the only path to making money consistently as a trader, there are no short-cuts.
Trading must be your passion, you must live and breathe it.
Over my 12 years of trading, and training 15,000 students, it’s clear to me that the people that make money don’t think about the money or ‘profits and rewards’ nearly as much as those who don’t make money. The ones who make money are those who love trading, are passionate about it and want to be the best trader they can possibly be. Just like a professional tennis player, whilst the money may be a driver initially, those tennis players have to love their chosen craft, and to stay in the game over a long period and excel at it, they have to have passion. Therefore, your final goal is to not only want to be a trader, but to be honest with yourself and either find a passion for trading or cut it loose and move on, because I can promise you if you don’t love, live and breathe trading (not the money) you won’t succeed.
35 Comments Leave a Comment
Thankyou for the great article to traders. First learn to trade and mix it with your day job to grow your skills.
Thank you for realistic guidance.
Thanks for all you do to help us in this amazing road!!
Nice article. Awe inspiring for me with the hope of crossing the bridge to reach where you are. You are the Guru Nial. Thanks
Great insight. thanks. I will set realistic goals
M inspired by the intro…-s the 1st step for me
I feel highly motivated. I want to learn as much as I can.
Hi Nial, I have been waiting for this article for a while now and finally, all the mist has cleared and I now know exactly how to set my goals as a Forex trader. Thank you very much.
Thank you sir for an excellent and honest article. I needed to read this.
So educative and beneficial article as usual. Thanks for educating us Sir.
Good article. Thank you for the inspiration.
Everytime i get into your site i feel like you are speaking to me.So simple and clear!!!.May God bless you and thanks for what your doing to humanity.
Thank Nial for this article.I hofe one day i become one of your best student in trading.Thank for you guide in trading.
Good article and yes it’s an apprentiship just like any other craft . Certainly not a casino in this industry if you want to be successful .
Thanks Nial for this great article and surely I need to trade along that path.
Hi Niall I have been studying forex for just over 2 months now and enjoy your articles very much. I have been using demo and have just opened a tiny live account because I wanted to actually see the live dynamics and the process. Already I have had some of the emotions and feelings that you describe in earlier articles… like wanting to jump out of one trade to another and also being impatient and not waiting for a trade to play out. I am only risking very small amounts and I am able to afford or accept any losses. So I can see immediately what you mean when you say we have to use the live experience to learn as much as possible and not think of making money. So I am trying to stay focused and thanks to your brilliant articles I have spotted my own mistakes very quickly. I have never traded before and I am enjoying the learning process and finding forex an interesting and exciting market.
Thanks for an encouraging article.
This is very true, I love this, thank you
thanks nial keep up your good work becoz people like me feel motivated.
Was exactly what I needed today! thanks!!!
It probably is similar to what we pilots say about flying: ” You have to be crazy and you have to love it”.
Those rare moments when you get the feeling you really accomplished something are the highlights of life . You have to be crazy about what you love to succeed.
Thanks for the article. Very informative and the kind of info that we require especially we who are learners. Keep posting. John
To fail to thank you will amount to ingratitude. You have successfully mentored me into becoming a successful trader. I had wanted to give up, but now I am happy I can make a career of it. I cannot thank you enough. I am mostly grateful for this lifetime benefit. Not only will I continue to make money as a professional trader, I will be able to coach my children and turn them to good traders.
I wish every trader should understand these goals, they are invaluable…
Remarkable lesson! Very informative, you on a lot of things open eyes. Thank you
Nial’s wisdom in this profession is amazing.His insight is unparalleled.What is even more awesome is his ability to convey the message in lucid,simple and convincing manner without without superfluousness in words.He speaks always to the heart of the issues.Thank you Nial for this.
that is s good one
your lesson is a true blessing to me
if I had known all the things I learnt from you while starting about 6 yrs ago by now I would have been a master in Fx trading all the money that i lost all these yrs will have gains to me but never the less its not late
Thanks Nial ,love it and no fluff and straight to the point
you need to love trading more to be a professional than to make money.
I agree, if your not passionate about trading, you won’t make consistent money.
Another great article. Clear and honest. Thanks.
Hi, Nice article!
How much (in percentage of capital) then would you expect to make if you master a strategy? is there any average known figure in the filed? Thanks!
How long is a piece of string ? Nobody can predict your expected returns.
That was so nice best trading rules thanks.
Nice one there. Always on point.