I tell you something that will help anyone tighten their group, Instead of shooting at that big black paint circle go to walmart and buy some little round smiley face stickers (the bright ones) the size roughly of a dime. Aim small miss small!!!! Your doing good but as said, before keep practicing....Try the little stickers and see if you dont tighten your groups within a week or even a couple of shooting sessions....
Sound advice, here (and elsewhere). David also gives you good thoughts.
At 20yds you could aim for a particular HOLE. also....your 40yd practice should shrink your 20yd groups. I'd spend 75% of my practice time at 2-3X the distance I felt was my "effective range".
What I found out the hard way is......we need to be EXTREMELY precise in our non-hunting practice. When you introduce a live target to the equation......things change (and I'm not trying to be condescending....as I'm sure you're aware of this). I feel like I'm a fairly proficient bow shot......but I've had issues in the field, simply due to nerves and the fact that the target can move
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I think it's great you're getting advice. Shows you care. Good luck to you as you progress. That black circle is actually what I'd be striving for from 40yds (all arrows inside it) with my backyard practice.
Again....good luck!