Why should you have a mentor? There are obviously two sides to this question. There is the “ask” side and the “answer” side. I have personally been on both side of this question. Now, as a trader and mentor, the “answer” has never been made more clear to me! With that said please allow me to dive into WHY a mentor is not only important but critical to your success as a trader. As a new trader or someone that has been trying their hand at the market for years but has not yet experienced true consistency this is primarily for you.
We all know that the market place for stocks ( FX, Options, Bitcoin etc) is not only a crowed space but also an environment where there is a ton of uncorrelated information. You have 10 talking heads all taking about 10 different things and at the end of the day, they offer little to NO explanation or clarity on what they’re talking about. People actually approach the markets thinking that what’s being talked about on your favourite financial show is in some way going to help them make money. Wrong! Full disclosure: there is absolute truth in the reporting of Macro news and financial reporting of a company, but for the most part the rest is just filler. It’s that “filler”, when counted on as absolute, that 90% of traders fail. To expand on that, failure comes from no plan, no strategy, taking tips , not managing risk etc…the list goes on but I’m sure you get the point.
Now that the stage has been set for the question, why is having a mentor important? The quick answer is that mentors cut 99.9% of the fat out of the equation. They can offer a road map on how to become consistent when approaching the markets. Mentors are traders first and as such they will understand the value in doing 1 maybe 2 things exceptionally well. Here is a primary example: I’m a day trader first and a short term swing trader second. I have a very defined way of searching for stocks using my proprietary scan I have developed. I’m looking for a particular set-up which encompasses a pattern recognition and momentum indicators. I’m only trading that one set-up long or short (based on momentum). You’ll find that if you have a chance to talk to a professional trader and mentor that they too adhere to a simple set of rules that they don’t stray away from. That in short, is the importance of having a mentor.
“…having someone in your corner that knows the early stage struggles of becoming a consistent trader and understands how to keep you on track”
Back in the day when I was an up and coming (and struggling) trader, my mentor expressed this idea upon me; He said “ find ONE space that you feel comfortable trading and simply trade it….over and over agin. And manage your risk”. My mentor is a full time trader who also mentors traders and now runs a successful Hedge Fund. It should be no surprise that he himself also has a Mentor.
It isn’t expressed enough when it comes to having a mentor and it’s that having someone in your corner that knows the early stage struggles of becoming a trader can keep you on track. For myself, teaching my students scans, technical set-up’s etc. is only a small portion of the trading puzzle. I spend a lot of my time checking in to ensure students are staying on track. I strive to keep my students motivated and honest about what there are doing with trading and in some cases, I’m the guy that has to communicate to my students that they’re off the mark. When you have a mentor in your corner you have someone that has your blindspots covered. You have someone that has the foresight that you lack. You have a second pair of eyes on every chart. Those are the TRUE key components on why having a mentor is important.
“The traders that get connected to a community and have a mentor in their corner will be better prepared for ANY type of market and will be equipped to survive.”
There is always the off chance that you go to market and become an over night success. But truthfully, that may not be the best thing for a traders. There are important lessons that need to be realized so you can learn to navigate the ebb and flow of the market. I know traders and investors that are killing this bull market but without the skill and knowledge of how to move with the market, they will inevitably get hammered when the market turns. These are the guys that don’t have mentors and think they have the market figured out, this is truly a dangerous position to be in. The traders that get connected to a community and have a mentor in their corner will be better prepared for ANY type of market and will be equipped to survive. I’ve openly admitted that I have and have always had a mentor. And if you look at any big trader, Retail or Institutional, you’ll find that they ALSO have (or had) a mentor. Statistically, 90% of traders fail and portion of that failure rate can be attributed NOT having someone in their corner. A mentor WILL get you to where you’re looking to go. They will shorten your learning curve by offering you a roadmap to what actually needs to be done and will be in your corner should you need real-time support. That what I do!