While trading is awesome, it is by far the hardest profession I have taken on. That has included cold call sales, 16 years of programming, managing a company, and finding enough work as a freelancer to keep the kids fed.
It uncovers some of your deepest secrets. Which is both unexpected, and something few traders prepare for.
The single best way to ease that learning curve and shortcut that mental torture is to find a trading mentor.
Being a private trader can be a lonesome business.
Unless you are one of the few who get picked up by a prop desk, bank or investment firm, you are without a network of seniors who can guide you over the bumpy road of trading.
It is up to you, books, anonymous forum posters and blogs like this one.
The separation of a private trader and the wider trading community makes finding a mentor fraught with danger and guesswork.
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.
So after asking the traders I know who is a mentor, or has a mentor (for some, it is both), here are the top tips for finding the right person for the job.
10 tips to find a good trading mentor
- Make sure they are brutally honest – *Nicety is of no use in trading. The market is nasty. Like all of your in-laws wrapped into one type of nasty. You need your mentor to be your harshest critic. If you think your partner has super lie-detected powers, wait until the markets get hold of your losing position with no stop. Your mentor must be brutally honest. They can still be nice to have a beer with, but you don’t want them brushing over a flaw in your trading in fear of hurting your feelings.
- Make sure their story is realistic – If you find a mentor that says you will never blow an account. They are either lying or yet to explore the ups and downs of trading. If they say trading is easy, they are lying. If they say you need to know everything about everything to be a good trader. Lying. 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 learned a good lesson from them.
- Don’t pick a system builder – A mentor is not someone who wants you to trade a particular system. That is a salesman. A mentor needs to be someone who can help you discover who you are as a trader. A mentor is not a system builder, a mentor is someone who provides tools for you to build a system around you. In the long run, you must feel like you own what you trade.
- Find someone who is clear and concise – There are so much ambiguity and unknowns in trading, the last thing you need is more confusion with the trading advice you are given. You need a mentor to give clear, short, concise ideas, not the long-winded, history of the planet, stories. Sharp, to the point, honest opinion.
- 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 be a pain in the ass. 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.
- 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. I know of some fantastic traders who would be terrible mentors. They would be terrible because either their communication skills suck, their methods are too specific, or they are just too darn nice. I have written on this before, so have a read of that to get the full reasons.
- Find someone who is around in your trading time zone – There is nothing like live feedback. Trading is an emotional game, and a key factor of being a trading mentor is to smooth out the emotional spikes beginner traders experience. You don’t want to be caught in a situation that you need to wait 18 hours to get advice on. Don’t expect live help desk kind of support, but at least know you will get some feedback before your account will explode.
- 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. Neither of you wants a 1 am phone call.
- 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.
- 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.
I won’t lie. There is no easy way of sourcing a mentor.
Finding one that meets most of the above requirements is even harder.
I spent over a decade without a mentor when I learned to trade and it is by far my biggest regret.
Sure I eventually made it full-time, but I’m sure I doubled the time it took by going it alone.
Get involved in the trading community, whether that is online, a local trading club or through services like meetup.com.
Network with other traders, be a real person talking to other real people and you will get a feel of who resonates with you.
Then just be bold, ask them, offer to pay, and you never know your luck.
Do you have suggestions on what is needed to be a good mentor I have forgotten? Help other traders by adding them below.