Separating missions, strategies, methods and goals.

In trading circles many new and seasoned traders use the words (or similar): strategy, method, targets, goals. But what do they actually mean? How do they all fit together? How are they organised? (see mindmap below). In this post I take the concepts apart and put them back into some sense of organisation.

Some have confused and conflated strategies and methods – and have lost track of the ‘Grand Mission’.  Some seem to take their grand mission as ‘profitability’. That’s fine if people want to do that, however I think it misses something more important.

Profitability is in my perception a sub-goal of a bigger strategic plan – the ‘Grand Mission’ – that has not been properly identified. If you do not identify the ‘Grand Mission’ how can you be so certain that all your sub-strategies, methods and sub-goals are well aligned? Difficult I think. What do you want to achieve by profitability? What drives you to it? Why do you need it so much? Why do you need the money so badly? It is about money – and any trader who says they’re not in this for making money, probably has a capacity for self-deception.

What are your methods for profitability? Do you have just one method? Do you know the difference between a method, a strategy and a goal? People think they know the difference, but in reality many confuse the concepts. In doing so they trip up themselves or limit their own achievements. How? They narrow their view and miss other methods, that may be consistent with their strategies. I too have been guilty of conflating the concepts up to this point. I have used the word strategy interchangeably with method on several occasions. That’s now going to change.

The following mindmap is not meant to be prescriptive. It is a broad and flexible framework. It does not mean that everybody has to follow it. It is not specifically applied to trading, but it can be. It requires deep thought.

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