• Tips to Finding a Trading Mentor

  • finding-mentorBeing a trader is a lonesome business. The separation of a private trader and the wider trading community makes finding a mentor tough. It is quite easy to jump at the first offer you get, but the wrong mentor can more harmful to your trading than anything else. Finding a proven skilled trading mentor could mean the difference from you prospering in the markets or losing most of your account and walking away with a bad experience.

    Here are some tips for what you should look for in a good mentor:

    1. Make sure they are brutally honestNicety is of no use in trading. The market is nasty. You need your mentor to be to be honest. Don’t wait until the markets get hold of your losing position with no stop. Your mentor must be able to tell you how manage your emotions and provide a clear strategy in entering, selling and stopping out on positions. You will not be right 100% of the time and will definitely stop-out and need to be prepared to do so. If you can not take a loss or a series of losses, don’t trade in the markets you do not have the stomach for it.
    1. Make sure their story is realistic – A good trader should have some good “back when I was in the war” type of stories. Find a trader with some battle scars. Look for someone who wears those scars with pride. If they can remember how they got them, they probably learnt a good lesson from them and continue to do so. They are also transparent in terms of results over time.
    1. Find someone that can demonstrate long-term and consistent results– A mentor has developed a proven approach that is not so specific that it can be taught and can demonstrate results. They do not trade a widespread system but follow something for a niche market and privy to a selective group. The reason is that these widespread systems are nothing more then selling a system to the masses and letting you figure it out on your own. You should be able to realize realistic repeatable returns that will build confidence over time.
    1. Find someone who is clear and concise – There is so much ambiguity and unknowns in trading, the last thing you need is more confusion with trading advice you are given. You need a mentor to give clear, short, concise ideas, not long-winded history of the planet stories. Sharp, to the point, honest opinion.
    1. Find someone who makes you uncomfortable – The point of a mentor is to help you do the things you can’t do on your own. You need someone to watch you closely, ask you to report back to them constantly and basically hold you accountable. They should want to see you trading statements and ask uncomfortable questions. You need a mentor someone to take you out of your comfort zone. Trading is very rarely comfortable.
    1. A mentor doesn’t have to own a yacht – There is a misconception that to be a great teacher, you need to be a great trader. It is simply not true. There are fantastic traders who would be terrible mentors. They would be terrible because they have poor communication skills, their methods are too specific, or they aren’t willing to put in the time.
    1. Find someone who is can teach you learn gradually – There is allot to learn in trading and a good mentor will rely on technology to perform the basic and automatic tasks. Leveraging on technology will allow you to gradually learn all the ins and outs of trading, while being able to be successful out of the gate.
    1. Be prepared to pay for it – Don’t expect to get a great mentor for free. Yes you might get lucky, but the saying of “you get what you paid for” applies here also. Paying for someone’s services encourages responsibility by you, and more importantly your mentor. It also encourages guidelines for what can and can’t be asked for as part of the mentoring agreement.
    1. Find someone who will teach you what it is to be a trader – In reality, you don’t only want to know how to trade a market, system or instrument, but how to be a trader. You need to know what is involved with trading full-time, with outside challenges that come with being a trader, and the core fundamentals of trading itself. Find a trader who will teach you the fundamentals of trading so you can trade any market on any time frame. Then you truly are a trader.
    1. In the end, if all else is equal, pick the older one – If you have two options (lucky you) that seem equally inviting, in the end, pick the older one. Some lessons can only be taught over time, and the best teachers will always be the best learners. Some trading lessons are taught not by the markets, but by life.

    There is no easy way of sourcing a mentor. Finding one that meets most of the above requirements is even harder. It has been proven that learning to trade without a mentor will take up to 10 years to learn and that’s if you still have an account to trade. Being taught by a mentor a following a clear approach with laid out disciplines can cut that time to as little as 1 year or shorter.

    If you find someone that is really skilled in trading and has demonstrated their results, this is gem as they are hard to find. You will definitely want to engage them to share their learned skills.