TRADERS’ NEW YEAR RESOLUTION: GOALS AND THE PATHWAY TO A NEW MILESTONE
The New Year marks New Year's resolutions. This article will guide you to setting and achieving your New Year trading goals on Dominion Markets.
INTRODUCTION TO DOMINION MARKETS
Established to ensure secure and equitable trading conditions, Dominion Markets is an online ECN Forex broker specializing in low spreads and prompt withdrawals. The firm was founded in early 2020 with the main goal of meeting the needs of active day traders and scalpers while also providing trading education and risk management strategies. Dominion Markets distinguishes itself through low-latency connectivity, superior liquidity, and access to quotes that were once exclusive to high-net-worth individuals, achieved through collaborations with various industry partners.
The broker aims to bridge the divide between institutional and retail trading, offering clients enhanced liquidity and a fair market environment. Clients can access top-notch Trading Education and Risk Management methods through commission-based incentive programs.
REFLECTING ON THE PAST YEAR
Before setting new year goals, you must reflect on your past year on Dominion Markets.
MARKET ANALYSIS
Follow these steps to analyze the markets of the previous year.
- Understand the Drivers
- Chart the Indexes
To ensure an in-depth understanding of the markets in the new year, you need to understand the market drivers. Study the fundamentals of the market in the previous year. Identify the relationships present. That is what makes the markets move and what doesn’t. You can apply this knowledge as you trade on Dominion Markets in the new year.
For traders, charting key indexes across markets over an extended period is beneficial. This practice helps identify relationships between markets and assess whether a shift in one market is contrary to or aligned with another. Carry out chart indexing on the previous year’s data to identify relationships that existed the previous year.
PERSONAL PERFORMANCE ANALYSIS
You can follow the steps below to do a personal performance analysis of the previous year.
- Absolute drawdown
- Average win size vs. average loss size
- Profit factor
The absolute drawdown measures the decline in a trading account by calculating the difference between the initial deposit and the lowest point the account reached below that deposit level. For instance, if your trading account started with $5000, reached a peak of $6000, but dropped to a minimum of $3000 during the past year, the absolute drawdown would be $2000 ($5000 - $3000 = $2000). This value indicates the most significant loss relative to the initial deposit over the year.
The profit/loss ratio compares the average profit/ loss per trade. For instance, if a trader anticipates a $1000 profit per trade and faces a $500 loss when incorrect, the profit/loss ratio would be 2:1 ($1000 / $500). Calculate your average profit-to-loss ratio for that year.
The profit factor indicates the ratio of your earnings to your losses in trading. To illustrate, consider your most recent five trades. You gained profits in 2 trades, earning $500 on one position and $800 on another. However, you incurred losses in 3 trades, each amounting to $150, totaling $450. By dividing the overall value of your winning trades ($1300) by the total value of your losing trades ($450), the resulting figure is 2.89. This signifies that your profits were 2.89 times greater than your losses. Calculate the profit factor for the previous year.
SETTING SMART GOALS FOR THE NEW YEAR
After assessing the previous year, you can now set goals for the new year. Below are some pointers to help as you set your new year goals for online trading on Dominion Markets.
DETERMINE YOUR MOTIVATION
The initial stage in establishing goals for forex trading involves identifying the purpose behind your desire to set new year goals. For instance, do you want to improve your profit margins? Do you want to increase the number of trades you take? Do you want to find a different trading style that suits you? Do you want to reduce your absolute drawdown?
By knowing your motivations, you can establish practical goals. Furthermore, clearly defining your motivations assists in recognizing the specific skills you need to acquire to achieve them.
MAKE YOUR GOALS MORE ABOUT THE PROCESS THAN THE RESULT
At first, traders often set goals like "I want to make 1% every day with my $30,000" or "I aim to make 30% in a year." While these goals may seem simple, achieving them involves refining how you approach the market and sticking to a plan. If you just jump into trading expecting to make a specific amount of money, reaching those goals in the long run is hard. To meet these targets,traders need to truly understand their trading plan's capabilities and limitations, not just think they understand.
Sometimes, reaching a dollar or percentage goal might be impossible, depending on the method used, but the strategy could still be valid and provide a good return. In such cases, traders must decide whether to stick with the strategy, adjust it, or try a different approach to increase returns. Many traders constantly change strategies, which can become a never-ending cycle. Trading might look easy when looking at past charts, but those who trade know it's more challenging than it seems. Beginners need to learn not only about the markets but also about themselves.
Like any other business, becoming a successful trader involves concentrating on a reliable method. You won't see immediate results. Most businesses take considerable time before making money, and some don't succeed. Trading follows the same pattern. If you don't grasp how the markets function and create a successful approach, your outcomes will be more about luck than skill
SET REALISTIC GOALS
Your New Year forex trading objectives should adhere to the SMART criteria. This means they should be specific, relevant, measurable, achievable, and time-bound. An example of a realistic goal is to achieve a return of 10 on your investment in the first four months of the New Year. While most of you will set monetary goals, you must understand that they depend on market conditions. You might execute your strategy flawlessly, but this is no guarantee. A lot of it depends on market fundamentals. Goals tied to your account balance may cause a lot of pressure, leading to high-risk trades to meet those goals.
Therefore, Your goals should not be tied to your account balance. This helps relieve pressure while trading.
CONSIDER YOUR RISK TOLERANCE
Like any other broker, online trading on Dominion Markets has risks. It is, therefore, important to have New Year goals that align with your risk tolerance. As you develop your goals, make sure you use funds you can afford to lose. Goals that require a lot of risk are not advisable. Losing in these circumstances may have a great effect on a trader. Furthermore, you should set modest monetary goals to ease pressure while trading. It also helps in boosting confidence when you achieve these goals.
The appeal of forex trading lies in the potential to amplify profits through leverage. Increasing your position size becomes tempting as you become profitable and develop an effective trading strategy. However, rapidly trading a large position can be risky and may reduce the likelihood of achieving your long-term profitability objectives.
DEVELOP A TRADING PLAN
Establishing trading goals is just the first step. You should create a structured plan to help you achieve your trading goals on Dominion Markets. A plan is a guide toward the attainment of your goals. This plan should explain everything in detail, from your entry and exit points and position sizing to risk management.
You should align your trading plan with your goals. For instance, a day trading strategy may yield higher monthly returns than a swing trading strategy but necessitates a distinct approach. Creating a trading plan that syncs with your trading style, personal preferences, and goals is important for success.
REVIEW AND ADJUST YOUR GOALS
As the new year progresses, you should regularly review your trading goals. This process is important since you might realize that some of your goals might have been unrealistic.
Traders might set unrealistic goals as a result of underestimating the challenge. Trading can be a tricky affair. Therefore, you should understand that achieving your goals might take longer than you thought.
Having clear goals is important for success in forex trading. If you follow these steps, you can set goals that you can reach and make a plan to help you get there. Stay positive, work on your daily trading strategy , and don't just think about short-term success.
CONCLUSION
The new year should mark a new trader. The article guides you on how to set your New Year trading goals. You can’t set new year goals without reviewing your previous year. Carry out market analysis and a personal performance analysis. This process will help you establish your starting point. You can then make your new year goals considering the outlined tips.
Know your motivation, and make realistic goals, focusing more on the process. You should also consider your risk tolerance and develop a trading plan for achieving these goals. Lastly, review and adjust your goals as the year goes by. Join Dominion Markets in the New Year and achieve your set objective.