Home > Lessons from the trading floor > Goal setting for 2009

Goal setting for 2009

Day trading is a business, no different than owning a deli or accounting firm. You have your revenues, expenses, you have busy periods and slow periods. You write a business plan, fund your business and then get to work. You have some good days and weeks and some days and weeks when you feel like you bought yourself a job instead of the freedom owning a business is supposed to bring.

Proprietary trading firms are a unique business. We are essentially in the business of teaching others to run their trading business. We supply the capital, the cost structure and a business plan. If you are trading at a good firm they will also offer coaching or mentoring. As a business owner you must have ambitious goals but also realistic based on your experience at running your business and the amount of capital you can afford to risk to open your business.

The top money managers in the world strive for a 15-20% annual return on capital investment. Return on capital “ROC” for a business in the area of 10-15% is a good return. I have seen some day traders make a much larger number than this, Some have actually produced 100%! What would a 50% return be for you based on the amount of capital you have invested in your trading business?

My advice for improving your business is to always have a method of monitoring your progress so that you know what you need to improve and and what you are doing well so that you can do more of it. Goal setting in trading should be monthly, quarterly and yearly.

Setting daily goals is not a good idea in my opinion because it is not busy every day. It is tough to set a number for daily revenue (trading profits). Your goals should be set for the month and that is how you should run your trading business. We will discuss in our next newsletter what specific goals to set as a trader.


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