A question that was posed to me following on my review of Brett Steenbarger’s new book Enhancing Trader Performance involves how one goes about finding a trader coach or mentor. It’s a tricky question.
First, I think we need to define what we mean when we use the terms “coach” and “mentor”. I brought this up directly with Brett recently, as he uses the two terms fairly interchangeably in his book. That comes from his medical background where they are basically the same thing. Coming from a coaching background myself, my view is different, of course.
I define a “coach” as someone who at the core is a teacher and well educated on the subject in question. For example, as a volleyball coach I teach players the ins and outs of the sport and I help them develop their skills. This is done in a great many ways including specific training regimens and video review. Beyond the skill development, though, there is also motivation, strategy development, and things like that.
Now “mentor” in my usage of the term is more like advisor. This is someone who takes a wider view of things. He or she helps guide you through things. They are often someone who has had success, who can provide advice and suggestions and be a sounding board for thoughts and ideas.
Good coaches can certainly be mentors, and often are. Mentors, though, are not as likely to be coaches.
In many arenas it is pretty easy to define a coach. They are folks who go through training programs and work under other coaches as they enter the field.
For example, I started coaching by helping out my own high school coach. Later, I assisted under other experienced coaches and coached my own teams under the supervision of still others. I read tons of books on the topic. I joined the American Volleyball Coaches Association. I went through USA Volleyball’s Coaching Accreditation Program. I’ve gone to seminars and clinics and talked with coaches from all over the country, worked camps, and coached teams of all levels. In other words, I’ve developed my coaching through an educational and experiential process.
Mentors, on the other hand, are more likely to be experienced people in a given field. They can share their war stories and provide advice based on their own person history of having gone through similar things as the mentee – either specifically related to the field in question, or in general terms. Keeping to my volleyball theme, older players on a team can be mentors to younger ones.
As I mentioned before, a good coach is often a mentor as well. For example, in my role as a college coach I not only worked with the players in developing their volleyball acumen, but I could also share with them my own playing experience. Even more, I could advise them on academic, career, and even life issues at times as well.
The whole topic of trader coaching is something Brett and I have discussed at length. In trading there is no real coaching development structure. There are no coach certification processes, and not much in the way of opportunity for a prospective trader coach to apprentice under an experienced one. As a result, it is hard to have a clear way of identifying coaches and knowing what they can offer.
Much of trader coaching as it has been over the years has been more mentoring in the way I’ve defined it. A budding young trader develops a relationship with a successful trader who has a good deal of experience in the markets. That is great, but only to a point. Why? Because mentors do not always make great coaches.
Here is the classic example. In sports one hardly ever sees the real elite athletes have any success in coaching, if they even bother trying it at all. The best coaches and managers often come from the ranks of relatively average players. There are any number of reasons for this. It may be that being less gifted, the average athlete worked harder learning the game and trying to find ways to compensate for short-comings in talent.
It is also sometimes a simple communication issue. We have all had teachers or professors who were absolutely brilliant in their field, but awful in the classroom. They simply could not present the material in a useful, coherent fashion.
The same sort of thing happens in trading. So many novice traders attempt to learn at the feet of superstar traders because they think the fact that someone made 500% in the markets over the last three years means they can teach them how to do it. Frankly, things just don’t work that way.
First of all, being able to teach someone else how to match your trading results requires you to understand exactly how you achieved them in the first place. Many traders simply cannot do that because they don’t really know. They might think they do because they have a system of some kind, but there are often other elements to the process which go unseen. This can be in terms of trading psychology or personality, or it could simply be years of experience.
Even if that successful trader can tell you exactly how he or she does it, there is still the question of being able to teach it effectively. Not everyone has what it takes to teach. It requires understanding how to communicate with the “student” in ways which will allow them to grasp the material. It also requires a great deal of patience, which not everyone has – especially hyperactive traders! 
Oh, and make sure you don’t mistake teaching for coaching. They are not the same.
There are loads of trading courses, seminars, classes, etc. out there. Some of them use “coaching” in their titles or descriptions, but there isn’t any coaching. It’s instruction. They are teaching you something – generally about a particular market, a style of trading, a trading system, etc. That’s not the same as coaching.
Coaching, at least to my mind, is a very personal thing, and more comprehensive. The coach works with the individual in specifically personalized ways to help them develop. Even in a team situation, a good coach spends time with each player observing them and working on their specific strengths and weaknesses.
A good trader coach does the same thing. It isn’t just about presenting some information and that being it. The coach learns about the coachee, understands their strengths and weaknesses, and customizes the training program to their needs. They also help in the implementation in trading terms – similar to game coaching following on from practice coaching.
If you can find that person and get them to coach you, then you’ve got something special. Keep in mind, though, that coaching is rarely free. After all, a good coach will commit a decent amount of time to the process. Additionally good coaches will only work with people they know they can help, and they will be able to assess that. They won’t just take on anyone.
Also, realize that one coach may not be all you’ll ever need. Just as an athlete will progress from having one coach when they are first learning the game, to a different one at the high school level, to yet another in college, you may find the need to change coaches over time. There is nothing wrong with that. Certain coaches are more suited in specific areas than are others. One coach could serve you very well as you learn to trade at the beginning level, but you may find you need someone else to help you focus more specifically on day trading, for example.
So where do you find these coaches? That’s the ultimate question, isn’t it?
Unfortunately, it’s not an easy thing to answer. Since there is no Association of Trader Coaches, you’re going to have to do the leg work yourself. Clearly you need to go looking where there are traders and do some research.
My advice would be to look for someone with a demonstrated knowledge of trading and the markets – especially in terms of what you would be looking to learn. Then you need to narrow it down to people who can effectively teach the subject. As I mentioned before, knowledge doesn’t necessarily equate to teaching ability.
After that it becomes more personal and individual. You need to be able to communicate well with your coach and he/she with you. That means ideally spending at least some time getting to know them - certainly enough to establish compatibility.
Having a trading coach is most definitely a worthwhile objective. A good one can help you go way beyond where you are likely to be able to go by yourself. Best of luck finding the right one for you.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
** See John’s full bio.
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