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"A mentor is someone who sees more talent and ability within you, than you see in yourself, and helps bring it out of you."
- Bob Proctor
Author, Speaker and Success Coach
"We make a living by what we get, we make a life
by what we give."
“Everyone needs a coach, whether it’s a top level executive, a graduate student, a homemaker, a homeless person or the President of the United States”
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1. Save you time, save you money
It is a wonderful afternoon on a warm late winters day in sunny South Africa as I write here.
While I was working on this page a bit earlier my phone rang and the person wanted to ask me a few questions about forex trading.
At the time I was looking for quotable quotes about mentoring and copying and pasting a few into my working document.
We spoke for about forty minutes. Towards the end of our conversation we agreed he has probably learned more about forex trading during
this conversation than in all the time he had spent before in about a month surfing forex trading and will spend in some time to come doing the same.
When I hung up I continued and within minutes I came across this Japanese saying:
“Better than a thousand days of diligent study is one day with a great teacher.”
In our modern, digital age we can roughly paraphrase it as:
"Better than a thousand days of mindless surfing is
a short consultation with someone who has been there earned the cap."
It is impossible to over-estimate the importance of the value in terms of time saving a trading mentor with real experience and real expertise can bring to your forex trading business.
Here is an example. One of my clients sent me this incredible statistic a year or two ago:
2. Helps you cope with information overload
It is said that Reuters (the news agency) produces 27,000 pages of information every second.
It is also estimated that the amount of information available on the Internet absolutely dwarfs the storage capacity of one human brain.
Most scary however is the theory that the brain's ability to handle all this information has'nt improved much since the caveman.
Information overload is bad for our health.
According to Richard Peterson, managing director of MarketPsych, a behavioural finance consultancy, traders are particularly vulnerable to the perils of data deluge as they attempt to process and respond quickly to a barrage of trading signals. “I have seen traders just burn out on too much information,” he said. “Traders get into a death spiral where they become too tired and their judgment becomes impaired.”
Burnout often correlates with poor trading performance, said Peterson, adding: “Tired people lose sight of the big picture and of moral norms: that is how rogue traders are born.”
In short, too much information is not only bad for your mental health, it is damaging for your wealth too.
From www.efinancialnews.com/story/2012-01-09/coping-with-information-overload
The Specific Causes of Overload
Agnew and Szykman tell us there are three main causes of information overload.
One is pure quantity.
The second is having too many options. (Although too few is also bad)
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The third factor is option similarity. If everything seems the same, differentiating one alternative from another is confusing and difficult.
From: www.investopedia.com/articles/financial-theory/11/negative-impact-of-information-overload.asp
The ability to ask someone you trust, someone you can connect with on a personal level, someone with experience and expertise about what to totally ignore, which options to consider and to discern between the confusing and many times unknown nuances of different but similar options is absolutely priceless.
3. Offers intelligence | Provides interpretation
Above we have made the case for information overload.
Novices and beginners in any area are dependent on experts in that area to reduce the amount of information to usable quantities, to transform it to intelligence ("gather intelligence") and then to interpret the intelligence."
- Novices tend to totally under-estimate the impact of price change information overload on their ability to trade. As a result they easily fall in the trap of ultra short term trading.
By doing this they add vast quantities of useless information to their experience. Information they can do nothing with but which have very large negative affects on them
- Intelligence is the result of a logical intellectual process, often referred to
as the intelligence cycle, which produces new actionable knowledge
designed to:
- Corroborate the validity & usability of information
- Understand its importance and linkages with other data
- Categorise and systematise the information
- Develop a plan for action, and
- Use the plan to accomplish a desired goal.
- Learning from the mistakes we make.
- There is a totally wrong idea in forex trading that simply the use of charts and technical analysis is sufficient to overcome information overload, provide ample intelligence and interpretation.
This is false.
Price charts as well as the indicators / patterns / formations provided by technical analysis add to the deluge of information with a slither of intelligence.
This is proven by the memes "all information is in the last price" and "all technical analysis are applicable to all timeframes". The lack of experience and expertise to interpret price charts and technical analysis studies has a devastating impact on novices attempts at trading
4. Perspective | Research
Consider this quote from Richard Peterson again:
“Tired people lose sight of the big picture and of moral norms: that is how rogue traders are born.”
To give or create perspective is to help someone to see the bigger picture, or to see "the wood from the trees", or to get "a bird's eye view".
An important aspect of seeing the bigger picture is what comes with it: different perspectives. A different perspective on things.
It is hardly possible to have a proper perspective and understanding and expertise in a complex subject such as trading successfully if you don't research it.
In order to create, give and transfer applicable perspective including new and different perspectives you need to have researched a subject matter properly. Research takes time. Time is money The value of good research done for you is priceless. Novice traders run the risk of spending valuable time on utter useless research due to a lack of knowledge and experience about what to research.
5. Evaluation and progress monitoring
It should go without saying that any endeavour to change or improve your life significantly and sustainably over a long period of time will require some exceptional and ongoing effort.
As a novice to the financial market space and the trading environment the beginner has a lot of practical things to master. Giving assistance on a practical level is one of the main functions of a good forex mentor. In this regard he should be a good trainer / teacher and even instructor. The mentor is a technical director, overseeing the broader process which defines progress.
The most difficult aspect of beginning and learning to trade is effective, correct and value adding evaluation. I believe this adds to trading failure more than any other factor. It can be argued that it is basically impossible for a novice to do this effectively. Especially so if he struggles with the practical consequences of not having a mentor.
If you can't and don't monitor your real progress as a beginner trader, your chances of success diminishes substantially.
This is arguably the most important need of novices: evaluation and monitoring progress
6. Motivates & Encourages | Guides & caution
Trading is exceptionally difficult in a manner which is almost impossible to explain to someone who isn't experiencing it first hand. Why this is so is becoming clear with the latest advances in "brain science".
In short, traders are constantly challenged with uncertainty on a micro scale but also on a macro scale. Due to the problem to effectively evaluate progress traders experience their initial efforts mostly as traumatic. They are in constant need of re-assurance in the face of things apparently going wrong. Motivating anyone in this scenario is an art. A good forex mentor will not be found under every bush.
Over-trading, impaired judgment, short-termism are realities facing novice traders. Someone to guide and caution, someone who can spot when these problems afflict you is an indispensible part of putting yourself in a position to achieve success as a private trader.
6. Add a personal touch | Success environment
Through all levels of society isolation is used as a form of punishment. The worst punishment is sustained, long term solitary confinement. It is basically living death.
The effects of isolation and loneliness is a very important topic in social and psychological studies.
The superficial connectedness via online communities and online social networks has put this on a whole new trajectory.
The negative impact (of online communities) on individuals may be much larger than one would believe.
To make the choice to be a private trader is to choose to skirt with lonelines and isolation.
Trader loneliness is a very special type of loneliness. It is not well studied, especially not in the home trader or private trader environment.
Take the general negative effect of isolation and loneliness on your personal psychology. Add persistent uncertainty and doubt on micro and macro level. Add the reality of sole responsibility and no-one to blame but yourself for any adverse consequences of you micro and macro trading decisions. Add the lack of experience and expertise. That is the recipe for trouble.
The private trader who lacks the support of professional institutional traders is at a distinct disadvantage in this regard.
This disadvantage can be beaten by teaming up with a personal trading mentor.
There are many more successful traders than openly successful traders.
This is because successful traders understand success is a journey and success can only be achieved in hindsight. Successful traders are thus generally reluctant to claim early success.
Successful traders know they are on the road to success. They also know the benefits of sharing with other journeyman.
A forex mentor is in a position to inevitably gather truly successful traders together and create a success environment in which indivdual traders can thrive and find their own success.
Consider this saying again to understand the dynamic and benefits of a success environment:
"We make a living by what we get, we make a life
by what we give."
Dirk, tell me more about your current Personal Mentoring Class
