Realistic targets and why people quit…

On another (closed) forum I’m a member of we’re engaged in a fierce debate (ok, there seems to only be a few of us left… lol) about what happened to the other 40+ members of the original courses that we went on. Where did everyone go?

I believe that in undertaking any new venture it’s extremely important to have realistic expectations and to understand that learning a new skill requires time, effort and patience…

I’m sure a lot of people are prepared to fork out huge sums on training and courses because they fully expect to make it back almost immediately. Unfortunately, unless they’re extremely fortunate in their initial trading I think it will take most people a while to get themselves to a point where they’re making consistent profits week in week out. As far as trading for a living goes? Well, I’ll come back to that…

So there’s a bit of conflict here. Companies need to sell courses so are prepared to put a rose tinted glow on what they’re offering. Hence many fall at the first hurdle when cash doesn’t magically fall into their lap…

So what is realistic? Let’s start really small

Target 1. Make £50 per week. No, seriously just £50. That’s £200 per month or £2400 per year. 
You’ve possibly just given yourself a 10% pay-rise (remember it’s tax free) or paid for a very decent holiday… well done!

Target 2. Get twice as good and make £100 per week. That’s £5200 per year.
First rule Take some of this money and buy you and your family something nice. Make sure they know this is a direct result of you looking at a bunch of wavy lines on a chart.

Now, again if you’re starting with a small account and you can pull this off you are already a superstar. Give yourself a pat on the back and keep going. Don’t get cocky and pay very close attention to risk management. I think you realistically need a trading account over £5K to achieve this with minimal risk but that’s just my opinion.

Target 3. What are your daily living costs? Take the amount you actually spend in a month and divide it by 30 days. So for me this is £83 per day (holy crap!)

Work on increasing your account size to be able to use leverage to achieve this modest goal. Yes, a 42 point rise at £2 per point will cover it. Don’t try to place a trade on everything under the sun!

Minimize risk to reduce stress and don’t trade with your last £200 in the bank because you will trade like a scared monkey brain. If this means you have to wait a bit then bloody wait!

If you can achieve target 3 then you are FINANCIALLY INDEPENDENT Yes, this is what all the guru’s talk about. Your activity outside your job is paying for your life. Now here’s the interesting part.

Target 4. What is target 4 for you

Do you want to trade full time? How much money in your account do you need to do this while generating a positive equity curve? What size ‘buffer’ do you need to trade comfortably and live without financial stress? Is this the point at which you are going to give up your job? Is this something you’d never consider? Do you need to?

I believe everyone is sold on the basis of what they believe ‘Target 4’ to look like for them. What people tend to forget is that the way to eat an elephant is one small bite at a time…

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