Process Goals

Define and explore what process goals are and how they improve you.

The process goal is simple. It is an acknowledgment of a weakness in my trading, which I have a deliberate intent to focus and improve on. Process goals will usually be set for about a week, or until it is built into a habit. The intent of these goals is to slowly, but consistently improve as a trader. Identify a weakness, isolate it, and then correct it and build it into a habit to prevent further violations.

In order to improve the progress with these goals I use James Clear's ideas from Atomic Habits. Once I have a weakness I want to fix, I break it down into its causes: cue, craving, response, reward.

Moving Stop Loss: Cue - Position is going against me, Craving - avoid loss, Response - tighten stop to unrealistic measure, Reward - less loss than could have occurred if trade had gone against me.

This was the breakdown of a recent bad habit I had to break. Understanding why I am making these trading decisions then attacking the root causes.

Then we follow his principals for building a good habit:

  1. Make it obvious.

  2. Make it attractive

  3. Make it easy.

  4. Make it satisfying.

In the case of the Stop Loss. I had text on my charts reminding me of my Stop loss policy and had it in my prep. (Obvious) Then I let myself set the stop and go watch a video, this let me let go of the trade and not be attached to every tick. (Attractive and easy) Finally, I decided to evaluate my trading at the end of the day only on if I met this goal, not P&L. (Satisfying)

And the bad habit:

  1. Make it invisible.

  2. Make it unattractive.

  3. Make it difficult.

  4. Make it unsatisfying.

For a while I had a issue plaguing my trading when I would take trades close to VWAP. To address this I removed the VWAP from DVA and that made it invisible. Now, there was no line to "trade" from so that made any trade unattractive and difficult to justify/take. Finally, I made sure my accountability partner would be looking specifically for these trades, I knew I would be scolded for taking them at the end of day review, so that would be unsatisfying.

Process goals will change as soon as a current goal is deemed to be habitual. Then the next goal will be placed. Journaling specifically on your execution of that process goal happens every day and is the first and most important part of the review.