Do you need a trading coach?
The notion of having a trading coach is an interesting one – why would I need one of those! In fact, you don’t need a trading coach, unless of course you want to be successful!
Critical to your Success
Having a coach is almost critical to your success in virtually anything. All too often we bumble through and try and work it out ourselves, which can generally prove to be very costly. By trying to short cut it and run solo. We can fall into the trap of many a “rookie error” silly and frustrating errors which can cost you money – often more than what the trading coach would have, or, alternatively, eat up reams of time in getting you to the goal or outcome you set for yourself.
Robert Kiyosaki had his Rich Dad as a coach and a mentor, Warren Buffett followed Benjamin Graham and George Soros had Karl Popper. Three success stories and three mentors – so having a coach adds value.
What are some of the core benefits in having a Trading coach or mentor?
So you want to be an investor or trader – which area of the market, type of instrument, or trading strategy are you going to focus on?
This is a pivotal question and one that most people totally miss. And plough straight in with learning how to trade. Chances are, you will end up in an area of the market that perhaps isn’t suitable for you. It could turn out to be more risky than you thought. Perhaps more time consuming, or simply a process that, in spite of making a profit, you find totally unfulfilling, dull and uninteresting.
Working with a coach or a mentor will likely help you identify the key sign posts that are important for you as a trader. Before you go too far down the track – possibly the wrong track. The key thing is to understand what makes you tick – your trading personality, and then match the strategy to this. Because there is not a one size fits all, when it comes to investing.
Because we understand this, every time we start working with a trader or investor we encourage them to go through our trading profiling tool. Which allows our coaches to customise a program that suits them. If you are unsure what your trading profile is and you’d like to find out more about what makes you make the investment choices you do you can take the test here.
2. Set realistic Goals and Objectives
Having worked out your objectives, it’s time to set some realistic goals and objectives. Getting this aligned on your own can be hard – after all, what is realistic? Just yesterday I overheard a client talking to one of my traders on our floor, in terms of what they were after. They claimed to be fairly conservative and yet we’re looking for 30% returns – not per year, per month! This is a clear mismatch between what they thought they wanted and what they would get – after all, any strategy with a chance of yielding 30% per month, on a consistent basis. It would be pretty high risk, right.
And so the process of matching you and your trading can then begin. Traditionally, this may focus on attitude to risk, and the returns available – often the reverse of how some others do it. “How much can I make?” should really be “based on my level of risk, what sort of returns are available?” A very different question
3. Do’s and Don’ts
When we are new to something, or perhaps more focussed on mastering a new subject. Getting some hard and fast tools and rules to serve your needs is a pretty good idea. When working with your coach, a run through of the Top 10 do’s and don’ts should give you a very clear idea of getting started. This can be invaluable, particularly in a trading context. As those rookie errors can be incredibly frustrating – not to mention expensive.
4. What about as your needs change?
As you learn more, you will want to bounce ideas and strategies off of someone – to give you some objective feedback and of course, their take on things, based on experience etc. To be clear – your needs in this area will change over time. Particularly as you learn more and move further along the path. With this in mind, your trading coach should be able to go the distance with you.
What we mean by this, is that you need someone who has the depth of experience in their team, and themselves, so they can continue to help you build your knowledge and confidence. However, having ongoing access to this, will also be of great value to you – why – well at some point, you will be running your own race. But having the confidence and security that comes with having open ended access to your coach, whenever you need it, is critical.
Time for a hard question!
5. Self Discipline
How is your self discipline? This more than any single issue, based on my own experience and observations, is where the majority of traders fail. Not sticking to their trading plan, not sticking to their risk management and not squeezing the trigger correctly. This area more than any, is where a good trading coach is worth their weight in gold! Having that accountability – having someone that you need to justify your actions and decisions to will help you immeasurably, when it comes to staying on track.
That call where, when speaking with your coach, you have to explain that you have departed from your trading plan or risk management and “taken off some bark”. More than likely. The question from the coach would most likely be “Why?”
This is a short one, and not always easy to answer. And this is where you get the return on your investment more than any single area. Not by having to answer a tough question. But helping you get to the actual cause of the problem and, more importantly, getting the fix in place and on a sustained basis.
What if you want to go it alone?
Good luck – yes you will work it all out, eventually! However, this could take years to do. If you even see the journey out.
However, when starting out, we very rarely know what we are doing right, or indeed, doing wrong, making it hard to do more of one and less of another and these are expensive lessons.
Ok so what if you are paper trading, while “learning the ropes”? Well – it’s still costing you money – that is the opportunity cost of not actually being live in the market. I have yet to see anyone ever drive a paper trading Mercedes!
Without a trading coach – someone to be accountable to. There is a good chance you will quit, without ever realising your potential and that would be a tragedy – worse, you would never know just how close you got to master it.
I can do it alone and save money!
Not really. Just the other day, a new broking client on our trading floor was discussing with one of my traders. How they had just lost over $8,000 on a trade they were doing with another firm. They had no real education on the strategy (had seen it at a seminar) and clearly didn’t know the risks – they were selling naked puts and had been exercised early, net loss $8,000 – ouch. Needless to say, lesson learned and they are now enrolled in our coaching program. Having had the strategy thoroughly explained. And I think put in the bin, on realising it was far riskier than they thought.
So with a coach, are your results guaranteed?
The simple answer being no!
Trading and investing involve risk – as does your potential for success. A great quote I heard recently, 80% of success is actually just turning up – how many people don’t show?
This is true at live events. But also in terms of when you open your screen in the morning – are you really there, or going through the motions?
Again, being accountable to a third party, who may well hold you accountable for your actions or lack thereof, will help you grow and get a result. The result you want – well that will depend on your efforts too. And by working with your trading coach, your odds of success have dramatically improved.
Here’s a random example
A couple of years ago, my personal trainer and I were having breakfast. And discussing a reset of some goals and objectives. I was due for some major knee surgery, in 8 weeks. The goal we set was a heavy bench press (would also help with handling being on crutches) and the goal was a mammoth 187.5kg (400lbs in old money) and the date – Thursday 8th June – the day before surgery.
Now at the time, I was benching around 100kgs – being tall is not the ideal build for powerlifting but we both committed to the goal – we were on the same page. Specialist knowledge was a key factor – in terms of diet and training techniques, 100% accountability ie turning up for each session, on time warmed up and ready to give 100%. The progress we made was measurable – where we should be versus the plan. In the middle of all this, something came in from left field (there always is) taking out precious training days, but we worked around it.
The schedule was punishing, my body was sore but at lunchtime 8th June, I benched 187.5kg – a weight which surpasses the current club record at the Brisbane Broncos and one I can categorically confirm I could not have done without my coach and the game plan we put together. He has a track record, specialist knowledge. We could work together and we both committed – outcome – job done.
Now, where is the relevance for you and a trading coach?
- Without a coach, I would not have hit my goal
- I have tried it since, solo, and came up short
- We had a clear goal
- The coach had a track record for delivering
- The outcome was measurable
- We both committed 100%
- There was a deadline
- We were both accountable for our actions
- My coach had specialist knowledge
- I had the specialist knowledge too, but not the process for pulling it together in the right way
- The result is accelerate over a relatively short time
- When we needed to make changes, there was flexibility
- Few people thought it possible – we were both committed
So in a trading context, how many of the above would really ring true – almost all of them?
These are the bona fide benefits of a trading coach and when paired with someone who really wants the outcome, well, anyone can get there. When the process is right, the results follow – and an important part of that process is being prepared to do what is needed – an effort level that will always be at least matched by your coach.
Some other questions to consider may include:
- What markets do I want to trade and does my coach have experience there
- The coaching one on one or group based
- Is there coaching to only a specific level
- There’s an ongoing element to the program
- Is there flexibility if I change my goals and objectives
Not having a trading coach, appeals to some. Because they want to go it alone – and this is an admirable approach. But often a costly one. Modeling success is often one of the best ways of accelerating your learning. If someone has already worked out the process, why not jump on the bandwagon, and ride that for yourself? Typically this is quicker – ie fast tracking you to where you are trying to get. Given the quote of “time is money” the opportunity cost, frustration. And the pain of trying to work it all out yourself, while rewarding, is easily outweighed by getting there far more quickly, with the support and partnership of a trading coach.
To get start with one of the coaches, who will give you the support you need. Schedule a one on one session with one of our trading coaches, by clicking here