Setting proper day trading goals while day trading can set you up for success. Goals help you stay motivated to learn, have discipline, and make sure you have the proper mindset. In this article we will go over why setting goals is important, what realistic goals are, and how you can work toward those goals.

Main Points

  • Goals are important because they help you stay on track and motivate you.
  • Risk management goals will ensure you have longevity in the market and make sure you are sustainable while trading.
  • Everybody makes mistakes, but your goal should be to learn from those mistakes.
  • You should always have realistic profit goals and exit plans because the market can go against you at any second.


The importance of goals


Goals help you stay on track. In anything in life that you want to master, you have to go through a step-by-step process to get there. Trading is not different. Throughout this journey, you will learn a variety of strategies, how the market works, how to learn from your mistakes, new events to the market, how global and daily events affect what the market does, and so on. Goals will provide you with direction on what you need to do, a sense of accomplishment, and will protect you from rash decisions. 

Risk Management Goal

In a few articles below, I express why risk management is extremely important. Day trading can become gambling really quickly if you are reckless and disregard risk. Most traders end up losing their hard-earned money that they put into the market. A goal you could set is to have the discipline to only place 1-5% of your trading balance in one trade, so you’re not risking too much. (Leverage is a different story, 1-3% in that case.) It is best not to be reckless in the market. Many people don’t have the discipline to do low-risk trades, but those people will end up burning their money in the long run, or even in a minute. Even if the trade doesn’t go well, you can still have in mind how you are disciplined to not have your portfolio destroyed by a single move. Losses are common for everyone in trading, and a single loss shouldn’t mean you aren’t profitable in the long term.

Learning from your mistakes

Everyone makes mistakes, especially in trading, beginners, professionals, and advanced traders all alike have made mistakes and will make mistakes. After each trade it is best to reflect and determine what went right and what went wrong. Beginners and experienced traders should both do this since the market is never ending. New data is always coming in and there will always be a new surprise for all of us. If a trade went wrong then in your reflection you should include what went wrong, did you risk too much, or did you have a high risk to reward ratio, or did you not follow your strategy correctly, did you trade a bad time? There are many reasons why your trade couldn’t have gone right, nobody can predict the future but you can always improve your probability and improve your next trade.

Learning Goals

Before you go on to the live market, you should understand what the market is, how the economy works, risk management, fundamentals, technical analysis, what can happen, what has happened, and much more. Of course, part of learning is experiencing mistakes, but many mistakes are avoidable, like risking everything in a high-risk move and then losing all your money. This mistake is avoidable and you will end up regretting it for your entire life. Before trading, you should have spent many months at least learning about investing, trading, volatility, reading online about people’s mistakes, and sustainable trading systems, because trading is extremely competitive. Everybody has one goal in trading, and that is to make money, even if they have to take the money from you ( Market Manipulation ).

Profit Goals

“No one ever went broke by taking a profit” – Jesse Lauriston Livermore

You should always have a liquidation plan, or an exit strategy when in profit. There is a chance that you won’t be in profit forever. Nobody has ever gone by taking a profit. You need to be thankful if you have profits because the market could have always gone against you, and it can still go against you. You bought at the bottom of a bear market and then the market flipped bullish but you refused to sell, and then the market flipped bearish again and you kept hoping that it would go up, only to see the market day by day going to lower lows and your profits slowly decreasing, and suddenly you lost your profits. It is always good to take profits, you don’t know what will happen in the future.


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