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The formation of our trading plan begins with our mission statement. It details WHY we are trading and investing in the market or markets we have chosen. It is, in essence, our purpose.
By clearly defining this purpose or mission, we will be able to remain on track and stay committed to our rules and trading processes through both the good and tough times. This will ensure we aren’t tempted by greed during the good times and aren’t paralysed by fear when the tough times are upon us. Each and every one of us will have a different purpose or mission for engaging the market. If your mission is powerful enough it will ensure you remain on track and help you retain your passion for trading or investing.
Purpose drives one to persevere, it creates intense desire to overcome.
Below are a number of key points to consider for inclusion in your mission statement:
- The Mission Statement is a purposeful promise that can carry you towards your goals
- It is about you and your family, your approach, and your ideals
- Your purpose. To “make money” is not a purpose – it is an outcome; your driving purpose needs to be more clearly and concisely articulated.
- Why are you investing in the market?
- What drives you? – providing for your kid’s future? – taking responsibility for your investments?
- What role will investing play in your life?
- Who are you doing this for?
- It is about growing as a person and as an investor
- It must also be able to accommodate changes that will occur over time and with experience – don’t make it too narrow, and
- Needs to have a deadline – to ensure accountability
A well structured mission statement can act as a silent ‘coach’ – keeping us focused and accountable in our quest to achieve our goals. A great example of a mission statement occurred in 1960 when JFK said that he would put a man on the moon by the end of the decade. Google’s mission statement “is to organise the world’s information and make it universally accessible and useful”.
Can’t wait until next week? Read the next blog in The Trading Plan series:
The Trading Plan – 2. Goals and Objectives