what your trading goal should be

Your trading purpose must support achievement of your core purpose. To achieve this effectively, your trading purpose needs to be carefully designed so it aligns with the type of trading you do, the resources you have available, and other key factors, such as who you are trading for and whether you are at a buy-side or sell-side firm.

An Forex market-maker at a bank might have the purpose of helping the bank provide markets in the currency franchise under their responsibility, including quoting prices to clients and customers. They must do this while generating profit, supporting trading volume and sales activities, and staying within defined risk limits.

An energy trader working for a producer may have a similar purpose, but it could also include managing energy assets, fulfilling and delivering physical energy products, along with achieving trading profitability and controlling risk carefully.

A buy-side trader’s purpose is different. They do not manage a franchise or handle physical operations. Their purpose might be to deploy allocated capital, either by trading with leverage or investing in tradable assets, to produce an adequate return on that capital according to the mandate set by the firm, while operating within specified risk limits.

A retail trader’s purpose differs again. Their purpose is to trade their own money and capital, using online platforms and leverage provided by a broker, to achieve profitable trading results, create personal income, grow their capital over time, and avoid losing their limited trading funds.

Your plan for reaching your purpose – how you execute your external trading activities – forms the structure of your playbook. A playbook serves as both a mission statement and a collection of rules, guidelines, strategies, and tactics that you apply in trading. It can also act as a place to document or declare your commitment to yourself.

Every step in your trading process should connect in some way to your playbook.

The playbook should remain flexible. You can modify and improve it over time. When you write it down, avoid including excessive detail. This approach supports ongoing evolution and adjustment while preventing you from feeling overly restricted.

You can maintain multiple playbooks. One client uses a specific playbook for markets in a clear bullish trend, another for bearish conditions, and a third for range-bound markets. Another client reviews their playbook frequently and updates it based on the current market environment. A different client keeps an active playbook and a separate passive playbook for times when they choose to reduce market involvement. Although I never fully wrote out my own playbook, it appeared through the notes recorded in my journals over the years, and I followed a consistent list of rules and guidelines that I always placed at the start of each trading journal.

As I began writing this section on goals and goal-setting, I noticed some internal conflict and opposing thoughts within myself.This stems from my discomfort with goals and my dissatisfaction with how most people approach goal-setting. Let me be clear: I am not opposed to goals. On the contrary, we require them as clear objectives that drive motivation. My concern lies in the method of setting goals.

Goals must originate from your purpose, remain consistent with your purpose, and take reality into account. Many people establish goals without considering reality or their true (balanced) purpose. In most cases, such goals arise from ego-driven wants.

Significant performance damage occurs when goals do not align with purpose. This applies equally to a bank imposing goals on its traders and to a beginner trader pursuing an unrealistic goal they dream of achieving.

Goals should represent results you aim to reach. They need to flow from your purpose; they must never override or dictate your purpose. At the same time, they should push you toward the boundary of your comfort zone and possibly past it. Comfort zones feel pleasant, but meaningful progress rarely occurs there.