The Dos and Don'ts of New Year's Resolutions

Last week we looked through all of our trades, the market conditions, what we did well, what we did poorly, and came away with a list of things we’d love to work on in the coming year. But like any to do list we are likely overwhelmed by the task in front of us. Where do we start? How do we actually fix it? What does better even mean?

While some might view it as cliché to set New Year’s Resolutions, the truth is the human mind loves a clean slate. We need forgiveness to start fresh, we need motivation and arbitrary dates to give us the boost to overcome the “getting started hump”. That imaginary line that feels impossible to begin until some external force sets us in motion. To move us from the object at rest, to the object that will never stop rolling.

And while we love clean slates, most people can’t keep their resolutions past 2-3 weeks. The gym empties out by late January. February rolls around and instead of feeling the motivation of newness we feel the dead of winter. We start instead looking forward to spring to be our next bump in motivation.

So how to tackle that list? How to make resolutions that last?

Do: Prioritize

Trying to attack your entire list in the first week of the year is a setup for failure. A task list should never be to do all at once, it should be something that gets implemented over time as you prioritize the things that will make the biggest impacts first. If you are starting dietary changes, you probably prioritize cutting out junk food before amino acid supplementation. If you are having trouble with your risk reward ratio, you probably want to prioritize minimizing losses before you change entire trading strategies or implement new indicators.

Do: Make Specific System Oriented Goals

A goal that has a specific mechanism of action that supports your goal is much more likely to keep you working towards it even if the line to the goal isn’t straight - which it almost never is. If your goal is to lose weight what does that mean? Are you changing your activity level? Your diet? Both? What about water intake? Have you even weighed yourself yet to see what’s reasonable to lose? What actions are you going to take? Are you getting a gym membership? Committing to more walking? You can see how having a vague goal does nothing to get you towards your goals. But if you decide that you want to focus on your health and decide to do so by increasing your water intake and committing to going for a 30 minute walk after breakfast and after dinner you will be far more likely to end up losing weight.

Don’t: Punish yourself for the outcome rather than the system

A system will take time to implement. It also uses the law of averages in your favor over a long period of time, rather than ensuring everything you do will be correct. With trading, our goal is never to bat 100% on our trade thesis, but it is to act in accordance with our system all the time. If we are acting within our system and we lose, it’s not a failure. If we act outside our system and win, it’s a bonus, but it shouldn’t become our new baseline unless we figure out the mechanism for that win.

Don’t: Give up when you mess up

One of my favorite expressions is that you can start a diet in the middle of a bag of chips. We are human. We will never be perfect. We will make mistakes. We will miss trades, we will miss a stop, we will sell a winner too soon out of panic. But it’s minimizing the distance between failures that matters. Don’t let one missed stop loss become ten. Don’t double down on a losing strategy in trying to make it back. Don’t let the slip up become the pattern.

Do: Create your emergency kit

When we create goals, we often imagine that everything will go perfectly. Because that’s what goals are - fantasy. What if instead we start to anticipate in advance that they won’t. Because I promise they won’t. This is the emergency kit. This is bringing food with you when you travel. This is having a flashlight or emergency candles for when the power goes out. This is having a buddy to hold you accountable when you miss a stop. Or a broker that shuts down once you’ve hit a day loser. Having sticky notes on the side of your screen reminding you what to do if you’re feeling stressed out. Whatever helps you get out of your funk faster, and back on track faster. That is your emergency kit.

Do: Ask to be held accountable

Some people are naturally socially oriented. That’s okay, find someone to hold you accountable in a meaningful way. And tell them what that looks like. Do you want them to be a sympathetic ear, or tell you when you’re being reckless? What does accountability look like to you. Not perfection, just accountability. Community is there to build you up, and also to hold your feet to the fire. To become someone that you can look up to, that will see your goals through because they are bigger than yourself. It’s time. Prioritize your list. Break it down into system based actionable tasks. Then let us know what amazing things you’ve got planned for 2025.