Page 15 - Module 2_The_Human_Element

Module 2 -Lesson 2 – five steps in goalsetting

The three goals of financially security, profitable trading and emotional satisfaction are contingent
upon one another: each is impossible without the others. Hence, there will be no financial security
without profitable trading; there will be no profitable trading without emotional satisfaction; and
there will be no emotional satisfaction without financial security.

4. The five steps in goal-setting

There are five clear steps to be taken in the process of goal-setting.

Step 1 – income & satisfaction
Draw a clear distinction between what is desired in terms of income and satisfaction and what can
be expected now. The point is that the subconscious mind is organized to cope with what is expected,
i.e. to cope with beliefs about the future. If you do not actually believe that you can trade markets
successfully, then you will simply not be able to trade markets successfully.

Step 2 – analyse your desires
The first question for the trader to answer, therefore, is whether the income from current trading
procedures is satisfactory and whether the associated emotions are positive. If the answer to either
part of this question is no, then the second stage is to analyse your desires in detail to determine
why they are not being met with available resources.

Is the problem merely a question of misallocation of resources (e.g. spending too much time reading
broker’s reports) or are the resources inadequate (e.g. not having sufficient knowledge of the market
being trader)? Is the trading technique at fault in some way?

The specific questions to ask yourself are:
▪ Do I have the experience to trade effectively? It may only take a year or two to learn how to
be able to go through the mechanics of trading. But it may take up to five years to learn
whether you are able to cope with the trading environment.
▪ Do I understand fully the technical issues involved in the market(s) in which I intend to trade?
The technical and legal aspects of trading are becoming increasingly complicated and need
to be learnt carefully.
▪ Do I have sufficient working capital to trade effectively? It may be necessary to start slowly
and accumulate capital while pursuing another profession.
▪ Do I have an effective trading system?

Step 3 – identify and specify resources
Having defined the problem, the third stage is to specify in detail the resources and/or the allocation
of resources that would be necessary to achieve the desired objective. Obviously, it is also important
that these resources can be made available. It would, for example, not be practical to trade a market
without sufficient capital.

Step 4 – set a time frame
The fourth stage is to place the realization of the goal of a specific increase in income within a
practical time frame. Obviously, a goal which is to be realized within the space of a few months is
going to generate more energy than one that is to be realized within an ill-defined number of years.

3