Not Everyone Trades the Same Way

By Lawrence

I was asked many times what I do when I am coaching traders. It is an interesting question because there are many answers. I think laying out some of the things I do will provide a better picture.

I Need To Know You

I usually need a lot of details from you on various aspects in your life. Most of the time, difficulties in trading is a combination of many factors affecting your ability to make better judgments. Hence, knowing you better gives me the chance to identify what areas in your life are affecting your trading.

Sometimes your perception on your trading problems may not be the complete picture. By communicating openly with me and discussing your concerns, usually better insights into the problems will emerge. In a way, questions I raised about you is a doorway to make you think more clearly about yourself.

Most important of all, I have worked with many traders. The extensive experience alone allows me to be able to see if your problems have happened to other traders. By identifying the issues, I can tell you how to overcome them.

I Need To Know Your Past Trading Patterns

I ask for detail trading records from you if possible. If not, I would like to take a look at the daily trading account balance. From the data you have given me, I will organize the information and see if certain patterns exist in your trading. For example, you could be better at trading certain kind of market environment. In that case, learning to avoid the ones you do not perform would be the single best thing to do to improve your performance.

Sometimes it is not that easy because your past trading records may tell me you have no strategy at all with your trading. In that case, I need to figure out what kind of strategy fits you best and teach you one to build on. Not everyone trades the same way hence I do not stuff the same trading methodology to everyone.

Some people are reactionary to the markets. They tend to have less patience but faster reactions to quick moving market environments. If you are like that, your preferred trading style will have to focus on trading the follow through moves and low risk counter-trend plays.

Some other people are strategist. They cannot pull the trigger unless they can see the bigger picture clearly. They need reasons before they can commit to a trade. If you are like this, your day trading game plan is better to be based on strategic price levels and known targets.

I Need Your Commitment

If you are not ready to take the bold step in making drastic changes, I really cannot help you much. I can tell you all I learned about you and what has to be done to turn things around, but you have to commit to yourself that you will make the necessary changes.

A common problem I have seen are traders who suffered significant drawdown for several months because of using average down all the time to stay profitable. When the market volatility surged, these traders were literally hit by the freight train. My advice to these traders is to start over without using the average down method they have relied on for years. I often help them building new trading plans based on what they are good at in the first place with trading.

Some traders would find it difficult to deal with the change of the game plan because they refused to go trading in simulation first to retrain themselves. As many of you know from my writings, it takes training to allow our minds to accept a new trading style. If you use real money to trade a new method immediately, your trained responses from your old trading style will always take over. Usually, after suffering from further losses, my voice of reasoning will finally get to these traders.

Practice and Evaluation

For beginner traders, they need guidance not because they know they have certain problems with trading. Instead, it is the searching for a method that fits them making it very difficult as they do not have anyone to talk to. My advice for the beginners is to read and learn as much as you can. There are good trading books you can learn from which I have listed in my website. I have written many articles myself on trading techniques and various aspects of trading. You can absorb the knowledge first and then get a simulation account to practice trading. Through casual engagement with trading, you will pick up the basic skills quickly. The practice you have done on simulation can provide you valuable information about yourself.

Working with beginners, I find that it is more an assignment and evaluation approach that can produce results quickly. Lots of reading assignment with questions from me to help you understand the materials better. Dialog on specific trading related concepts and techniques enable you to think deeper into these subjects. Through the correspondence, you will get to your goal faster as my job is to guide you directly towards the goal by avoiding the unnecessary detours like learning the wrong approach to the market that does not fit your personality.

For some very young traders, they often have the unrealistic expectations that they can learn to trade very quickly. Yes, I have seen naturally talented traders who can just do their thing and making money within a month or two after they learned all the basics. If you ask them how they do it, they cannot give you an answer. The key factor making them able to do what they do is their minds are wired differently. For those not having this advantage, it takes time to develop the mental strength in this area. Usually it takes 3 to 5 years to become a proficient Emini trader. Coaching can help accelerate the process if you are willing to learn.

End Notes

Trading is such a diverse business that there are rooms for anyone who want it bad enough to establish a successful trading career. The main obstacle to trading success is not a secret trading method or some incredible trading edge you discover. It is you being able to figure out who you are, what you are good at and how to best utilize yourself in trading that can lead you to trading success.

My goal in coaching traders is to help them to breakthrough their personal limitations so that they can build on what they have learned and continue to grow from there. As I explained before, I am doing this for a short period of time and likely move on to pursuit other things. I am passionate about this coaching service but I also know myself well enough that I cannot do this continuously. When I have another big project idea on what I like to do next, I will let you all know.