Traditionally to achieve what you want from trading— a higher account value, better reward for your risk, being a successful trader— you set actionable goals.
For a while, this is exactly what I did too. Each goal was laid out, waiting for me to achieve it. I completed a few of them, but many were just out of reach. But then I understood, my results weren’t a reflection of my goals, but on the actions and systems I had put in place to achieve them.
For traders, your goals are to be successful, your systems are how you do them. Training your eyes to spot patterns, practising price action and volume analysis, evaluating risk to reward with each trade idea.
If you completely forgot about your goals, but instead focused your energy on your systems, I bet you would come out the other end with far greater skills and ability to practise than you otherwise would.
Goals vs Systems.
Scott Adams has nailed this concept “If you do something every day, its a system. If you’re waiting to achieve it someday in the future, it’s a goal.”
The goals for trading centre around growing your account, but it’s obviously useless to spend the whole session focused on your profit and loss stats. The only real alternative is to work on your trading tasks each day. The profit and loss will take care of itself.
I’ll preface this by saying, goals are good for allowing your mind to focus on tasks, but systems are best for progressing and upskilling.
Unlike goals—which you merely think and dream about—systems are concrete processes of actions, choices, and habits that bring you closer to achieving success each day. (Now, there are some problems with goals…)
Goals, by contrast, can be vague and unattainable without the strategy and consistent action that systems demand. While systems help you level up day after day, goals lock you into a fixed outcome. Goals can make you dream about your future instead of focusing on the present moment’s work.
I’ve experienced this myself.
Perhaps most importantly, Goals put you in a state of failure from day one. When pursuing a goal, you remain in this “failure zone” for an indefinite period until you achieve it. Systems, however, deliver daily results and compound your progress over time.
Scott Adams again: “Goal-oriented people exist in a state of continuous pre success failure at best, and permanent failure at worst if things never work out. Systems people succeed every time they apply their systems, in the sense that they did what they intended to do. The goals people are fighting the feeling of discouragement at each turn. The systems people are feeling good every time they apply their system.”
The stats are real. 90% of traders drop out in the first few years. They all had the goal to become a successful trader, but not everyone had the backend systems in place to achieve their goals. There’s some serious survivorship bias in trading and we must reflect on the fact that our goals won’t save us, consistent practice will.
Instead of setting a goal to create a three hundred page model book of the best stocks in the last three decades, commit to working on it for an hour each day. The same principle applies to trading income—instead of promising yourself a specific growth target by year’s end, follow your trading plan honestly and diligently each session for the next six months before evaluating your progress.
Imagine you have an enormous watchlist, and you set a goal to find the true market leaders. If you summon the resources to do your absolute best due diligence and find the TML’s, you’ll have a great watchlist. But if you fall back into “adding anything moving into the watchlist”, then soon you will be buried in crap again, seeking another burst of motivation to remove those laggards.
You are left with the same outcome because you didn’t change the system behind high quality screening. You worked on the symptom without attending to the cause. High quality systems with good inputs will mean the outputs take care of themselves. Achieving goals is a momentary thing, results are not the problem here. You need to change the systems that cause cause these bad results.
Solving problems at the results level provides only temporary fixes. For lasting improvement, you must address issues at the systems level.
Is there a balance here?
Instead of throwing goals out completely, use them to visualise a broad direction you want to head towards, or create manageable goals that your systems will achieve with ease. Move out of the failure zone using systems thinking and towards consistent success every day.
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