Novice traders love nothing more than a great outcome and a great outcome for a novice trader is seeing green in the P&L. Instead of these outcome goals the new trader should be setting process goals. We want to see our processes grow and mature so our skills and experience can grow along side them. When our process goals are achieved, our outcome goals come along for the ride.
Lets look at a simple example using Stock Selection. We will assume that part of your daily stock selection is choosing stocks that gap up or down overnight. An outcome goal would be to make $500 by selecting a “great gapper”. A process goal would be to take a week and develop a set of criteria to rate gaps thus allowing you to refine your edge of truly finding a “great gapper”
These process goals should be very thin slices of achievable enhancements that you set every single week. We want to find very specific goals that you can measure. And remember this is the fun part of trading, the learning and growing. Define some process goals for yourself and your P&L will thank you for it.