"If you don't know where you're going, any road will get you there."
- Yogi Berra

We've been so busy talking about the market's wild start to 2008 that we really haven't had a chance to talk about getting our minds prepared for a new trading year. Since it's important though (at least as important as making market predictions) we're not going to let the second week of 2008 pass by and not take care of it.

Today's TrendWatch has two sections to it. The first part is twelve new years resolutions - well, affirmations actually - I think everyone should live by. The second part is a set of tips on goal setting, the roadmap to making the most out of the twelve affirmations.

Don't worry though - it's actually a pretty short and sweet lesson.
First up is the 12 critical resolutions that make me better at selecting trades. Note that I used to write these affirmations in the future tense, but as a reader pointed out, affirmations are best when stated in the present tense. If you mentally believe you are already doing the things you need to do, then just keep doing them and you attain a daily mentality of prosperity.

1. I do not trade every day just because I feel as if I have to.

2. I have developed and follow a proven trading system, and realize that one bad trade does not negate the system.

3. I set profit targets, and take those profits when they are achieved. I do not change targets in an effort to create "just a little more" profit.

4. I do not let emotions sway my trade decisions.

5. I approach trading as a business. I am strategic and logical in following my trading business plan.

6. I learn something every day, no matter how small, that gives me a greater trading edge.

7. I keep a trading journal, and note when and why my analysis failed and succeeded. I review this journal weekly.

8. I do not fight the market. I capitalize on whichever direction the market is going.

9. I take small losses rather than let them become large losses. I don't have to be correct with every trade.

10. I am an expert in one area of trading, whether it be options, one certain stock, or an index. I master every detail particular to those trades.

11. I invest in my success, whether it be via a book, market data, or a trading coach.

12. I act upon what the market is doing, rather than what I think it "should" be doing.

Now, do you actually have a written goal of what you expect to make from your trading this year? If you do, you're among three in 100 who have any goal in writing.

Writing out your goal allows your mind to define exactly what you want from your trading. Once you define a dollar amount you will make for the year, you can break that goal down into what you need to make each month, each week and each day on average.

Your goals should not be just monetary though. Your goals sheet should also list other areas like improving your percentage of winning trades, widening the size of your winners or reducing the size of your losers. Another good goal is reviewing your processes daily to stay sharp. I'm sure you can think of other areas you'd like to improve. Write one goal down NOW while you're thinking about it!

Why so important? Goals focus our attention and our energy to give our efforts a clear direction. Without a clear direction, your efforts will not be unified and your results will not be reaching anywhere near your true potential. Setting goals gives the trader a feeling of control over what actions to take to accomplish a goal. This allows traders to grow beyond past limiting beliefs or fears that had previously held them back.

One of the best methods I've seen in goal-setting is to make sure they're 'SMART' goals, which is just an acronym for the key criteria for any objective.

S - Specific - Goals must be specific, defining exactly what you want to achieve.

M - Measurable - You must be able to measure if your goal is being achieved, to give you the clear feedback you need to stay on track.

A - Achievable - Goals should be ambitious but they should also be attainable. You have to possess the belief that you can achieve the goal in order to

R - Relevant - Your goal must be personally important to you in order to increase the odds that you will be driven by the goal to accomplish it.

T - Timeline - You must have a deadline date to completion, which focuses you on the steps needed and time required in order to fulfill your objective.

Monitor goals daily and change your plan if you're not getting the results you expected. And once you achieve your goal, celebrate your accomplishment - and then set another goal!

I think getting your mindset and your goals right is the key to any trading success. You can do it in 2008!

Price Headley is the founder and chief analyst of BigTrends.com.