Setting Goals

[ricardodeano]

Hello everyone, I hope you're all well.

So I've been a bit quiet in life, on the forum and trading front but thought I'd try and canvas some opinions about setting goals.

Firstly do we think this is a good / bad idea for a newbie? Personally, I seem to work better under pressure and when I have deadlines to meet so hopefully I would apply this same 'deadline motivator' to trading.

Secondly, what would you set as realistic goals for a newbie trader?

Personally, I am not looking for a quick fix and instant riches - that'd be nice but I am a realist and having spent a February having my first real play in the pre-race markets, I believe I have personal battles to overcome (over confidence/staking, understanding my own cognitive biases, etc/) . But I'm fine with that, I've always been quite self aware so happy to work on those flaws (sorry experienced pros, I know you like such folk in the market )

My long term strategy is as follows:

2017 - Spend the year learning, collecting data.
Mar - May: Purely paper trade, developing systematic approaches, sticking to them, learning to accept 'pretend' losses and avoid over-staking.
June - Sept: Real trading with smallest stakes possible, learning to accept real losses.
Oct - Dec: Reviewing collected data, small stake trades.

2018 - Aim to make a profit for the year, ideally using said profits to, finally, clear my student loan (I'm 37 married with two kids ffs!!!)
2019 - Clear £20k profit

What do we think? Pipe dreams? Realistic?

Just interested in hearing peoples thoughts and getting my plan out there rather than just sitting on it and deliberate it in my own mind.

[Nero Tulip]

Goals are good, as long as they are process orientated, and not based upon results - which are random and uncontrollable, trying to exert control on the uncontrollable is well, as dodgy as it sounds.

If you are starting out, set goals relating to learning -

Markets - how, when and why they move - gather data.
Sport - what is going on fundamentally in the sport your are trading that cause market moves, how, when, why etc etc etc... gather data.
Trading - maths, maths, maths - probability theory, game / information. Execution of trades, placement of orders, timing, what hurts your position, what helps it, and staking of trades... gather data.
Logic - relating to execution and edge, how decisions are your bottom line, how to place risk reward in your favour by operating around logic.
Psychology - yours, everyone else's, behavioral economics relating to markets, how to use this to your advantage, what's good/bad internally.
Finding the right path - read about trading, find how great traders traded, understand what is timeless and what no longer applies, find parallels with your own experiences in markets, find your own style - never blindly copy others.

Don't get learning and data overload, part of the data thing is added value it can bring much later down the line, when you understand better the intricacies of analysing it. Gather it, but the above stuff is more important. Take breaks and let the stuff sink in slowly.

Personally I hate paper trading, I doubt it's realism, particularly psychologically. The above stuff is a classic menu of trading stuff, but your main goal through learning that stuff imo should be to find a repetitive, executable edge that is ideally automated, or if manual, does not rely on your reaction speed or intuition. The goal is therefore to have a plan that contains all the technical stuff and covers all eventualities relating to your decision making process, good and bad.

This is a marathon, you don't find out if you're good at this until you hang up your boots, so be slow and consistent. I'm a bit older than you with 2 little ones, I'm not sure Id fancy trying to start doing this now. If you find an edge, the size of profit will take care of itself, if you don't, don't sweat it looking and don't lose a lot looking for one either, paying off that student by 'ordinary means' looks to be a good value play. Best of luck, never get out of learning mode.

[ricardodeano]

Seems like great advice Nero, I appreciate the time taken to reply.

I'm a web developer by trade so I have no choice other than to always continue to learn otherwise you get left behind. Hopefully I can bring that attitude to the table.

[Euler]

I think it's sensible to use real money where possible, even at small stakes. Things like fill rate are an edge too and you can't see that when paper trading. Also, nothing more frustrating than seeing something work in theory but only getting 5p matched live. So using some money will give you a clue beyond just some stats.

[iambic_pentameter]

I'd echo what Euler says about using real money.

From my own limited experience, some good goals to begin with:

1) Focus on not losing money before you focus on making money
2) Spend as much time trading the markets as you can and, initially, focus on one sport, trading using minimum stakes
3) Watch all the videos on Bet Angel's YouTube channel
4) Read Jolly Green's posts on starting out - really useful

Most importantly - give it time. It's easy to fall into the trap of observing successful traders and thinking "I wish I could do that" but you have to remember, every successful trader at some point didn't know anything.

Good luck on your journey

Iambic

[Frogmella]

I'm a recent returner/noob myself but I've tried this and other types of trading going back over the last 20 years. I have had some success but, I must confess, not much.

I think "goals" are a mistake here, it is the wrong mindset altogether in my view.

This isn't like a normal job, there isn't a start or a finish, no one truly cares whether you win or lose except you. There is, or should be, no one to appraise you, and no-one you have to impress. If there is such a person. I guarantee you will fail at this because the need to impress will cause mistakes to be made. You must not NEED to make a profit especially while you learn, you cannot be worrying about paying household bills while tackling the chaotic market.

Unlike a normal job, in this business, sometimes, often in fact, the best thing to do is to do nothing at all. For someone used to being productive at work this can be a difficult realisation to adjust to. You can, spend all day having to do nothing and end the day with nothing. You will have done the right thing, but will feel like you haven't done any work at all, you will have nothing to show for your efforts. You may have to explain to an important other what you did with your time. You will therefore feel pressure to DO something all the time.

The VERY worst thing you can do is the following:
Work out what you would like/need to earn a year and divide it by 52 or 12 or 365. "I only need £54.59 a day from 20 races thats only £2.74 a race....". This kind of thinking will kill you. Especially if you start the day with a loss or two and your target immediately goes up, then you don't manage to hit it for a day so you add the shortfall to the day next day and now you need £5.74 a race to stay on your target, when you couldn't even make £2.74. As the self-imposed pressure increases you may try to play catch up, you'll probably loosen/alter your entry requirements and then lose even more money, so then you might decide to increase the stakes to get back on track quicker, things start to go better for a while but then reversion hits you and the bigger stakes cause a bigger loss and now you're even farther behind and your target gets ever farther away. You get the idea. Don't fix an income goal, take what comes and relax.

Everything you have been trained to do in your normal working life is almost useless here, in fact it holds you back.

I hope this hasn't put you off, it's fun if you don't weigh yourself down with unreasonable expectations.

[Nero Tulip]

About as sound as any advice you'll read anywhere. Goals based on results and profit desires/expectations/needs are trading kryptonite. If you have a trading plan that has a positive expectancy, you work while you are focused and alert, and stop when you aren't. Results are randomly distributed. Doing nothing can be your strongest weapon, one that most find hardest to use for the reasons Frogmella explained so well. Great post.

I'm a recent returner/noob myself but I've tried this and other types of trading going back over the last 20 years. I have had some success but, I must confess, not much.

I think "goals" are a mistake here, it is the wrong mindset altogether in my view.

This isn't like a normal job, there isn't a start or a finish, no one truly cares whether you win or lose except you. There is, or should be, no one to appraise you, and no-one you have to impress. If there is such a person. I guarantee you will fail at this because the need to impress will cause mistakes to be made. You must not NEED to make a profit especially while you learn, you cannot be worrying about paying household bills while tackling the chaotic market.

Unlike a normal job, in this business, sometimes, often in fact, the best thing to do is to do nothing at all. For someone used to being productive at work this can be a difficult realisation to adjust to. You can, spend all day having to do nothing and end the day with nothing. You will have done the right thing, but will feel like you haven't done any work at all, you will have nothing to show for your efforts. You may have to explain to an important other what you did with your time. You will therefore feel pressure to DO something all the time.

The VERY worst thing you can do is the following:
Work out what you would like/need to earn a year and divide it by 52 or 12 or 365. "I only need £54.59 a day from 20 races thats only £2.74 a race....". This kind of thinking will kill you. Especially if you start the day with a loss or two and your target immediately goes up, then you don't manage to hit it for a day so you add the shortfall to the day next day and now you need £5.74 a race to stay on your target, when you couldn't even make £2.74. As the self-imposed pressure increases you may try to play catch up, you'll probably loosen/alter your entry requirements and then lose even more money, so then you might decide to increase the stakes to get back on track quicker, things start to go better for a while but then reversion hits you and the bigger stakes cause a bigger loss and now you're even farther behind and your target gets ever farther away. You get the idea. Don't fix an income goal, take what comes and relax.

Everything you have been trained to do in your normal working life is almost useless here, in fact it holds you back.

I hope this hasn't put you off, it's fun if you don't weigh yourself down with unreasonable expectations.

[ricardodeano]

Thanks very much for the advice Frogmella.

Goals booted into touch!

Fortunately I do not have the enforced pressures of saying "I need x per day". At present, I am using this soully as a learning experience and something that, further down the line, will show good results.

If I get there, great. If I don't, I'm not going to beat myself up about it.

I am enjoying it, despite my shortfalls, and if nothing else, it has reinvigorated my passion for psychology (I studied it at university but was genuinely too drunk at the time to appreciate what was in front of me)