3 Steps For Successful New Year Resolutions

Posted in: Basic Trading Strategies, Trading Article



It’s that time of year again – the one where we all look back and think of the things we haven’t managed to achieve or habits we’d like to change. We resolve to do better in the coming year, set new goals, re-evaluate old goals and dig in to make these resolutions stick.

But here is a hard truth:  unless you do something different this time, this year’s resolutions will end in the same way as all the rest – they’ll end in failure.


You Already Knew There Was An Issue

If you haven’t managed to change something you’d like to in the past, then it’s not for the want of trying. You already know there’s something that you’re doing that you really shouldn’t be. New Year’s resolutions are not New Year’s revelations.

It’s not like this is the only time of year you’re able to go on a diet, start to exercise, quit smoking, stop breaking your trading loss limits, make sure you prepare for trading each day or start that trade journal you know you should.

But then the holiday break is one where in one way or another, we all take a step back from everything and have the chance to reflect on life.

This makes the New Year a great opportunity to make a fresh start for many. You can see this by the number of people who actually start it with resolutions.


We All Have A Natural Balance

When it comes to resolutions, sticking to them is in effect an exercise in habit replacement. The trouble with this is that the habits we form over time become particularly ingrained and therefore can be troublesome to change. If you are trying to change a habit you are pushing yourself out of your natural state of equilibrium.

This is stressful enough as it is but there are things which can make your willpower crumble. One of which is trying to change too many things at once – fail at one and the whole ship may capsize.

Willpower is an emotional resource and so it can be depleted. Arguments at home, trouble at work or even lack of sleep can all take their toll and end up depleting our levels of willpower. So when your willpower is already low, what’s the first thing that’s likely to suffer? You got it – things that push us out of our natural equilibrium.


You Don’t Need A New Year To Start Again

There is a tipping point where you know you need to change. Often this point does indeed come in the New Year. But it also comes at random points throughout the year. It could be after seeing old friends, an argument with your spouse or stepping on the scales for the first time in a while!

But once you have the motivation to start to make a change you need to make sure you’re going to be able to go the distance.

It’s going to be something that’s in some respects unique to each individual, but there are some common themes which can help. Apart from the obvious about being specific about your goals (actually probably the last step) it’s desire, passion and results driven motivation that’ll help you sustain change.

1. Make Sure You Have A True desire for change

Understanding more fully why you need to change is a great motivator. Researching the health effects of not being a good weight or smoking/drinking is a good start. As is identifying exactly how much a particular trading habit you know is bad actually costs you through the cold hard data.

But there has to be a benefit to retaining your new habit once you get there. A new natural equilibrium must be forged. Feeling fit and healthy, enjoying great clothes or seeing a great income stream is definitely a good motivation, but is this enough?

2. Couple it with something you are passionate about

Now here’s the bit where you might need to be a little creative – but if you do it can be a powerful tool to create a new natural equilibrium so you are less likely to slip up. For example, it’s not so difficult to get fit if you already know you love playing a sport. But what if you don’t? What if the thing you’re trying to achieve can’t be associated with a passion?

Well you need to get creative.

If you don’t like any sport, perhaps you like photography and then that can be your drive to get outside and be more active. What about keeping a trading journal? Perhaps you’re a whiz at Excel – use that passion to create a great journal and then fill it. Or perhaps you’re really competitive – so seek out what the competition is doing and then beat it.

3. Track your resolution progress

Success is not always a black and white thing. It can be measured by relative performance which is always a variable thing anyway. So if you’re able to see general progress and movement in the right direction, then it’s easier to maintain your focus and you’re less likely to abandon your goals when you have a stressful period in your life. Track your progress and you’ll find it becomes a motivation in itself.

Making big changes in your life and work is never going to be as easy as making a New Year’s resolution. It takes time and effort and moreover, a bit of cunning in order to change your natural state of being so that you might maintain a new habit. The chances are that if you make New Year’s resolutions you’ll have struggled to keep them before.

So why not make the resolution to do things differently this year? If your goals are worth achieving, I suggest you do.

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Coach James

James began his trading career nearly a decade ago, learning his craft in fixed income derivatives. These days, he predominantly day trades index futures using auction context as the vital ingredient to his approach. James is a firm believer in the importance of trader psychology and how it can make such a monumental difference to how well a trader performs.

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