Do you remember your first miles driving a car for the first time? I bet you had an experienced driver sitting next to you, explaining how to accelerate, when to brake, and how to shift gears.
Learning to trade is pretty much similar: Having an experienced trader or coach teaching you how to approach the markets can make a real difference in your trading performance.
Following the car analogy, a good coach will teach you when to enter trades (accelerate), how to manage risks (brake), and how to scale in or out of positions (shift gears).
Here’s a guide explaining all the benefits of having a trading coach, what to look for, and where to find one.
Should You Get a Trading Coach?
A trading coach can help you fast-track your learning process and teach you how to trade the financial markets. A good trading coach understands the common mistakes of beginner traders and can help you become a successful trader. Trading is like any other skill, it takes time until you learn how to do it properly.
Do you remember your first steps in playing chess or riding a bicycle? Most likely, you’ve had a mentor who showed you the basics of chess playing or how to keep your balance on a bike. Trading is similar. You need to learn the basics first and then slowly gain experience, which will eventually make you a successful trader.
Now, if you already have some experience with trading as a beginner trader, you might think that it looks fairly straightforward. Maybe you’ve read a few online trading articles and went through some trading videos, learning some basic trading strategies along the way and feeling that trading success lies just around the corner.
At first, trading may look simple. All you have to do is press that buy or sell button, wait for the trade to become profitable, and close your trade. Still, the majority of traders lose money on a daily basis.
That’s where a trading coach comes into play. A good trading coach will teach you the foundations of successful trading, like risk management and patience.
A coach will also help you get in the right mindset of a successful trader, teach you how to follow your trading strategy, and how to hold yourself accountable for any trading mistakes you make. While you can become a successful trader without a trading coach, it will likely take much more time and a few blown accounts. That’s why I recommend you take a course with a tutor first.
Major Benefits of Using a Trading Coach
Trading coaches can make a real difference in your trading performance. Learning to trade on your own can be a lonely and stressful experience, with hundreds of online articles offering contradictory or useless information. Experienced trading coaches, on the other hand, know how to identify your trading mistakes and help you overcome them, providing a path to consistent profits.
Here are a few things you should expect from a trading coach:
Helps you improve your trading
A good trading coach should help you improve your trading. However, don’t expect trading success to come overnight. While a coach will point you in the right direction, it’s still your job to trade and to embrace all trading tips the coach gives you. You should soon see yourself making fewer trading mistakes, such as overtrading, chasing the market, and not paying attention to risk management.
Overtrading refers to trading too large position sizes too often and is one of the most dangerous trading mistakes among beginner traders. Good trading coaches are able to identify when you’re overtrading the markets as well as provide solutions for it. This alone can make it worth looking for a trading coach.
In general, good trading coaches should give you a stable trading foundation. Without that, it’s almost impossible to add more complex trading tools to your toolbox down the road. You should learn when is the best time to trade, how to develop a trading plan, and how to review your trades to improve your performance.
Highlights your strengths and weaknesses
Another important advantage of having a trading coach is that he will be able to highlight your strengths and weaknesses in your trading, which can be hard to do on your own.
An experienced trading coach will pinpoint your strengths and encourage you to stick to them and improve over time. Even more importantly, you’ll learn what your main weaknesses are that prevent you from becoming that consistently profitable trader you want to be.
Your thoughts on your trading performance are most likely subjective. Even though the bottom line doesn’t lie, as humans, we tend to look for all kinds of excuses for bad trading. A trading coach will show you what you’re doing right and try to eliminate your trading mistakes as much as possible.
Helps you reach your trading goals
While trading success doesn’t come overnight, a trading coach can help you accelerate your learning curve. At your first session, a good coach should ask you about your trading experience and what your trading goals are, after which you should develop a plan together on how to achieve your goals.
Good trading coaches will also identify unrealistic trading goals where high expectations inevitably lead to disappointment.
Traders who are new to the world of online trading often lack accountability for their actions. The markets are a dangerous environment for impulsive people since there is no boss who tells you what to do, when to buy, when to close, and how large of a position size to take. All this makes it tough for inexperienced traders to make profitable trading decisions.
A trading coach can help you with that by holding you accountable for your trading mistakes. This helps you avoid impulsive trading decisions, as you’ll have to explain those irrational actions to your coach.
Helps You Develop a Routine
Last but not least, good trading coaches help you with developing a trading routine. All successful traders have built a routine that includes how they’re approaching the markets, how they manage their trades and risk, and how their review process looks like. A trading coach can help you do the same.
Successful trading requires rules and a well-defined process of reviewing past trades.
How to Find a Trading Coach
1. It’s Not All About Track-Records
When looking for a trading coach, his or her personal track-record isn’t the most important thing to pay attention to. In fact, there are some trading coaches who don’t even trade themselves!
What really matters is how their students are doing: Are they satisfied with the coach’s work? Did they improve their trading results? Look for answers on the internet, try to find honest online reviews and, if possible, reach out to previous students to hear their personal opinions about a coach.
2. Find a Coach Who Suits Your Style
Not all trading coaches are the same. Some use long-term trading styles, while others focus on scalping or even algorithmic trading strategies. That’s why it is important to find a coach who suits your personal trading style. Serious trading coaches will often have an introductory interview with their clients to check whether their mentoring method is what their clients are looking for.
If you want to become a day trader, for example, you should look for a trading coach who is a day trader himself or has a strong focus on day trading.
In addition, some trading coaches focus entirely on other trading aspects, like risk management and trading psychology. If you’re already familiar with trading and have a successful trading strategy, you may want to focus on the exit rules for your trades, or how to cope with a losing streak. There are trading coaches whose job is exactly that.
3. Do Your Homework
Finding a good trading coach isn’t that easy. The best out there usually don’t have to promote themselves as they already have enough students, which makes finding them even harder. That’s why you need to do your analysis and look at places that aren’t that obvious at first, like trading forums and freelance sites.
If possible, try to reach out to expert traders who host reputable trading courses as some of them offer interactive webinars where students can ask questions and receive prompt answers.
While webinars aren’t exactly the same as having a trading coach, they still provide a great opportunity to master trading skills and receive prompt feedback on your personal trading.
Having a personal trading coach or mentor can be an invaluable asset for beginner traders. If you’ve read Market Wizards by Jack Schwager, a legendary trading book, you’ll note that many of the greatest traders had a trading coach early in their career who taught them the fundamentals of trading and showed them the path to success. Start your trading career with us at My Trading Skills, our Trading for Beginners course is the perfect place to learn the fundamentals.
Credit: My Trading Skills