This was absolutely essential. I do not mean I set my targets on a per trade basis. I mean I set myself weekly and monthly targets. I have discussed in this previous article how important discipline is. As a newbie, what I needed above all else was discipline and the way I became disciplined was by setting targets.
I looked at my method and I decided it was capable of generating around 50-70 pips per trade, giving me on average two trades per week. So I set my weekly pip goal to 100 pips. When I meet my goal I stopped trading for the week.
Why was this so important?
It was important because
- It gave my trading structure and allowed me to plan ahead, long term.
- It gave me a goal to aim for instead of trading aimlessly.
That’s not all it did though. I fought against the biggest psychological pitfalls, which I discussed previously in this article, such as the tendency to overtrade and being undisciplined.
The urge to overtrade is one of the biggest problems a newbie trader faces. If you have a set target once you reach it you can relax, and take it easy for the rest of the week. It removes that pressure traders usually have to make more and more pips. It also keeps you disciplined because it gives you a structured plan that you can stick to.
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