I was recently asked a question by a woman who had read a review I wrote of Brett N. Steenbarger’s book Enhancing Trader Performance (John Wiley & Sons, Inc., 2007). The book talks a lot about coaching, and she wanted to know how one goes about finding a trading coach and/or mentor. This is a tricky question.

Coach Versus Mentor
I think, first of all, we need to define what we mean when we use the terms “coach” and “mentor.” I brought this up with Brett recently, as he uses the two terms fairly interchangeably in his book. This comes from his medical background where these two terms mean basically the same thing. Coming from a coaching background myself, I have a different view.

I define a “coach” as someone who is at the core a teacher and who is 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. I do this with a variety of approaches, including specific training regimens and video reviews. Beyond the skill development, though, there is also motivation, strategy development, and their other things.

“Mentor” in my use of the term is more like advisor. This is someone who has a broader view. He or she helps guide you through the learning process. A mentor is often someone who has achieved success and who can provide advice and suggestions, offering a sounding board for thoughts and ideas. Good coaches can certainly be mentors, and they often are. Mentors, on the other hand, are not as likely to be coaches.

In many arenas it is easy to define a coach. They are the folks who go through training programs and work under other coaches as they enter a field. I started coaching by helping out my own high school coach. Later, I assisted under other experienced coaches and then coached my own teams under the supervision of others. I read tons of books on the topic, joined the American Volleyball Coaches Association, and went through USA’s Volleyball Coaching Accreditation Program. I’ve gone to seminars and clinics, talked with coaches from all over the country, worked at camps, and coached teams of all levels. In other words, I’ve developed my coaching through education and experience.

Mentors, on the other hand, are more likely to be experienced in a given field. They can share their war stories and provide advice based on having had an experience similar to the mentee’s. Older players on a team can be mentors to the younger ones. In my role as a college coach I not only worked with 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 other life issues at times as well.

The Making of a Coach
The whole topic of trader coaching is something Brett and I have discussed at length. In trading there is no real development structure for coaching. There are no coaching certification processes, and not much in the way of opportunity for a prospective trading coach to apprentice under an experienced one. As a result, it is hard to clearly identify coaches and know what they can offer. Much of trader coaching has been closer to mentoring as 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’s 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 top athletes have any success in coaching, if they even bother trying it. The best coaches and managers often come from the ranks of relatively average players. There is any number of reasons for this. It may be that being less gifted; the average athlete worked harder learning the game, trying to find ways to compensate for their 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 percent in the markets over the last three years means he can teach someone else how to do it. Frankly, things just don’t work that way. 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 know because they have a system of some kind, but there are often other elements involved in the process, some of them unseen—for example the psychology of the superstar trader. And even if that superstar 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 an understanding of how to communicate with “students” in ways that allow them to grasp the material. It also requires a great deal of patience, which not everyone has—especially hyperactive traders! Make sure you don’t mistake teaching for coaching. They are not the same.

Instructors are Not Necessarily Coaches
There are loads of trading courses, seminars and classes out there. Some of them use “coaching” in their titles or descriptions even though there really isn’t any coaching involved. 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 in my mind, is very personal and is more comprehensive. The coach works with the individual to help develop his or her specific skills and then utilize them during the game. Even in a team situation, a good coach spends time with each individual player, observing her and working on her specific strengths and weaknesses.

A good trading coach does the same thing. It isn’t just about presenting the right information. The coach learns about the player, understands his strengths and weaknesses, and customizes the training program to his needs. Coaches also help in the implementation of trading terms—similar to actual game coaching which is vastly different from practice coaching.

Finding a Good Coach Starts with You
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 Trading 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.

The first part of finding a coach actually involves deciding what you are looking for—what you feel like you need to learn or do better. That can include things like:

• Learning the details of a new market.
• Improving your risk management.
• Developing a deeper understanding of how to use volatility in your trading.
• Understand how to evaluate trading systems.
• Learn a specific type of trading (scalping, day trading,

These are just a few examples. There are many others that could come in to play. The important part of the process at this stage is having a clear notion of what exactly you want to get out of a new coaching arrangement.

Here’s another example in volleyball. In this sport there are several specialized positions. Each player must know the overall rules of play, understand the system the head coach is employing, and train in the basics (conditioning, quickness, ball-handling skills, etc.). These things are usually accomplished in group practice sessions.

Often, however, the player will also spend time working on skills specific to his or her particular position. The focus here is narrower and may be geared towards either the individual or a smaller group. This training is generally done by a coach with a better understanding of the specific position and how to develop the skills involved. Sometimes, to get even more focused and individual attention, a player will get involved with an outside coach who specializes in the position in question.

In trading, you can do the same thing. There is one level of general coaching that can cover a broader scope—trading forex, for example. Then there is the much deeper level which goes into more specialized territory—such as how to trade using market profile charts. You just need to go into finding a trading coach who knows exactly what your needs are.

Coaching Takes Knowledge and Communication
The next step in finding a good coach is to look for someone who has demonstrated great knowledge of trading and the markets—especially in those you are looking to learn. That’s obvious. But there are experts everywhere. How do you find one that can work with you?

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. It requires communication. Look for someone who is good at expressing things and can articulate ideas and concepts clearly. This might not be easy to figure out. Some potential coaches can be observed presenting classes or seminars. Others have written articles or books that you can read to gain a better idea. If that’s the case, it will be fairly easy for you to evaluate their ability to communicate.

However, if you don’t have access to the writings and/or oral presentations of a coaching candidate, you are going to have to take a more direct approach. That means you need to speak to them yourself in order to make that judgment. Actually, you are going to want to speak with them at some point anyway.

A Personal Coach
After you have a candidate in mind, the process can become much more personal and individual. You need to be able to communicate well with your coach and she with you. That means, ideally, spending at least some time getting to know her—certainly enough to establish whether there is a reasonable level of compatibility.

It’s important for the prospective coach be focused on you. If possible, before you give him or her any real information about yourself and what you are looking to accomplish, ask the question “What would you do for me?” This is a bit of a trick question. If he starts rambling on about all the stuff he knows and doesn’t talk about your particular needs at all, look elsewhere. In actuality, the ideal answer would be no answer at all. A good coach would first try to get an idea of what you need, and that means asking questions. If your prospective coach asks you questions about your experience and objectives, take that as a good sign.

Make sure, in your discussions with a prospective coach, that you also discuss the way the coaching will be handled. Will it be in person? Will it be over the phone, through email or some other online connection? What sorts of support resources will the coach provide? Will you be required to purchase any other books, products or services? Before committing to any arrangement, you have to know the full details.

What it Costs
If you can find that person and get her 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 only they will be able to assess that. They won’t just take on anyone.

I have seen per hour coaching rates that range from $100 up to $300, and I’m sure there are those who charge even more. A good coach is worth the money, but obviously you don’t want to be putting yourself in bankruptcy for the sake of it.

Often coaches will offer discounted rates for making a longer-term commitment. This is great, but you don’t want to lock yourself into something you cannot get out of if you find things are not working out the way you had intended. Give yourself enough time to get into the coaching relationship and see where it’s going, but don’t lock yourself into something longer than that until you know it’s what you want.

Final Thoughts
Having a trading coach is most definitely a worthwhile objective. A good one can help you go far beyond where you were likely to be able to go by yourself. Make sure you don’t just go for someone who has achieved spectacular results (especially if they were accomplished over only a short period of time). Knowledge and practical experience are important, but teaching ability is equally so. Ask lots of questions and make sure any prospective coach wants to get to know you. If you do that, you are more than likely to find yourself in a positive and rewarding coaching relationship. Best of luck finding the right one for you.