3. Trading Partners & Mentors
This is about building relationships with other traders for support, brainstorming and accountability. Carefully selecting your trading buddies and mentors is one of the shortcuts to obtain experience.
Trading In A Team
In words of Rob Booker, a trading team is...
I found that when I first started, it helped me to have another person to whom I would be accountable for all of my trading. That’s what I mean when I say you need to get some backup. Someone to get inside the barrel with you, to help you when you make a bad trade, to keep you humble when you make a good trade. That kind of stuff.
A trading team does not necessarily require a big network of people, it can be formed by a couple of individuals only. The point is taking the advantage of the unbiased or objective view of the other party in finding mistakes and correcting them. Josip Causic explains that trading partners are there to...
[...] (1) look at the chart with a new set of eyes, and (2) to honestly share their view point, which could be quite different and opposing to ours. They are often there to challenge our thinking and our market forecast. They are there to keep us accountable to ourselves. I believe that it is wise to select a Trading Buddy who is at a higher level than yourself; one who has more trading experience than you. The worst possible thing to do is to select a Trading Buddy who is too agreeable and too polite. Those kinds of people do a great disservice to other traders.
As the name suggests, this is someone that you are accountable to- preferably someone you trust and agrees to be asked about your performance. Ideally, you choose someone whom you feel responsible for- a spouse or husband. You should also consider giving this person read-only access to your trading account – many broker platforms allow for this.
The mutual agreement can also go a bit further if you can not muster enough self-discipline. For example, if you tend to over-trade, let someone have the access codes to your trade account with instructions to only let you in if you do not trade more that a certain number of trades per week.
If you feel like the above formulas are too intimidating, then just search for someone with whom you can share some of the data of your Trade Log and Journal. This way you build a community of traders to work with. You will find that lots of people are very generous in sharing their findings in terms of techniques and tools. There are plenty of places to find trading buddies, like forums, specialized social networks or by attending events like FXstreet.com International Traders Conference!
Creating and Using a Powerful Trading Plan - Part 2, by Rob Booker. In this presentation, Rob provides a description of what a trading plan can include, how a trading plan can boost your trading to a higher level, how you can keep track of your progress and implementation of your plan and much more.
Right here at the FXStreet.com Forum, FXWizard is Your Forex Mentor. With more than 10 years of experience trading all sorts of financial markets, he has gone through the main situations that any trader may face in his trading life. If there is one person in the house who has experimented with more tools and strategies, it is the FXWizard. Feel free to post your trade log on a dedicated thread and get objective advice back - many students are doing it already. And best of all, it is for free.
Coaches & Mentors
Find a mentor who has proved himself over the years to be a successful trader and watch this person perform in the markets. Taking notes of how your mentor conducts his or her business is far more important than trying to imitate his or her trading style. This means finding out why the mentor uses certain tools, how these tools are used, what the concepts are that the mentor capitalizes on, what his or her true edges are, etc.
Most mentors you can follow at FXStreet.com disclose their trading concepts or methods to the public and also explain why they trade with that particular method. This is to say that the secret is not found in the method; it is found in how the trader plans and conducts his or her business.
A good mentor should also be aware of your evolutionary stage as a trader and understand that you may still have to learn certain things he or she takes for granted. It is a natural trait in humans that once a certain piece of knowledge is acquired, we think that others also know it. In this regard, the mentor should be able to explain how he or she acted to overcome certain obstacles and make your learning experience a better and smoother one.
But not all the work and responsibility can be placed on the mentor's shoulders. Pro-activeness is a trait the student has to possess, for instance, in the willingness to formulate questions. If you do not communicate with your mentor, it is difficult for you to receive personalized guidance. Asking questions seems trivial and sometimes people avoid it for the fear of looking ridiculous, but think that mentors were also novices once upon a time and therefore they will understand your questions. Unfortunately, many aspiring traders are unable to profit one hundred percent from their mentors even if they pay for their services.
Why would you be any different in the respect to needing a mentor? Think that successful traders also had and have their mentors who helped them take better control of their trading.
Much like in other areas where people are trained in school, successful traders have also been trained and educated in a very similar fashion. In order to learn how to do a job well, one needs to be instructed by someone who is already doing that job and who can do it effectively. It is not very different in trading. Even in areas like music and arts, where creativeness and originality are aptitudes difficult master, a proper guidance is many times the key of success.
However, many aspirants decide early on in their trading career to skip the education process and jump right in. The path becomes then long and tortuous. If trading was that easy without understanding or guidance from a professional, then everyone would be doing it and making more money right from the beginning.
We suggest that you take some percentage of your trading capital and designate it as money set aside strictly for educational purposes. You will not regret the investment. Any experienced trader who has gone the hard way will agree that is better to spend a year learning than to lose thousands of dollars before starting to finally win.
There will be a constant urge and need to discover and learn more about trading and the markets. This is a normal process of growing as a trader. But this desire should be controlled and your efforts and time efficiently organized. This can be done by allocating specific time towards the learning process. More importantly, try to stay focused on one subject at a time and work toward getting to know that subject well instead of jumping from one theory to another. Many of the experts you can follow at our Live Section are also constantly learning. This can be seen in the fact that although they have been using the same tools for years, their trading concepts undergo subtle changes in some cases. Usually the novice trader thinks in terms of tools in order to develop a method, while experienced traders change the set-ups, but keep using the same tools. That is a sign of focused learning and expertise.
Your goal should be this: learn as much as you want and can, but stay focused. If it takes five or ten years to reach the level of a staggering income, let it be so and enjoy the process. Many rewards are to be found along the way. Education is where the journey starts and the right partners will reveal a shortcut on the path to knowledge.