The Trading Mentor: Radical Awareness for the Experienced Trader

How mentors can take a different approach to their trading students.

Everybody needs a mentor at times.
Mentors can help stock traders. PhotoAlto/Eric Audras/PhotoAlto Agency RF Collections /Getty Images

Today's post is by Richard Friesen, CEO of Mind Muscle for Traders. Richard works with financial professionals and independent traders to increase their consistent profits using neuroscience. His online courses and intensive trading boot camps are well-known throughout the trading community.

We all love to give advice. We all love to see what somebody else is doing incorrectly and point it out to them.

Many marriages have failed because one of the spouses insisted on giving such advice. A trading mentor can cause the same amount of damage to even an experienced trader.

In this article, I propose a new model for the trading mentor which does not include any advice-giving at all. In fact, it prohibits advice-giving as one of its core precepts. As we have learned from modern neuroscience, long-term learning, and behavioral changes happen best when the student puts in an effort to overcome the challenges by themselves. When this is done in a way that gives them a visceral experience of the effort and the sense of satisfaction with the hard earned accomplishment, that learning builds a foundation that advice cannot match. If we give trading advice and it is followed, then we remove that learning experience and a personal sense of victory.

However, a brand-new trader can easily be overwhelmed by the all the options, alternatives, and variables making learning to trade very difficult.

For the new trader, starting with an established strategy or advisor can create a path through all this complexity. This can be foundational at the start of the trading career.

Eventually, both the novice and experienced trader, in order to become successful, need to develop their own path in a way that serves them best.

And here is where a radical trading mentor can be most helpful.

Most experienced traders acknowledge that most of their trading success comes from a mindset, not a strategy. If this is the case, then we can look at supporting another trader by being a mindset mentor. So the next question we have is, how can we, as trading mentors, provide the best environment for our friends and fellow traders to progress the best?

We can’t make decisions or redo decisions that we made in the past. Many times I wished I could change a decision that I had made previously, but I have found out that that is very difficult to do. (Time travel being so expensive these days.)  I also wish that I could, while I am in my rational mind, finalize a decision now, that I will be making in the future.

However, I have found this equally as challenging. So that leaves us with the present moment for effective behavioral changes. If this is the case, then the best thing that a trading mentor can do is bring awareness to this present moment. This allows the trader to experience in real time the mechanics of decision processes they have, the emotional triggers that are present and the thought processes that create their state of mind.

Change the Approach, Change the Trader

I propose that rather than giving trading advice we become mindset awareness coaches. What we can do best is to help our fellow traders become aware of their internal and subconscious processes as they trade in real time. What this looks like is simply observing them as they trade, asking some very specific questions and taking notes.

These questions are not about their strategies nor the asset class they trade, but simply about their current state of mind in the moment while they are trading. This gives the trader the ability and modeling they need to start improving their real-time awareness which leads to better decisions. I believe that a trading mentor who focuses on just increasing a traders awareness and letting the traders find their own path, in the long term will do more good than a mentor that gives advice.

How does this work? Here is a story from a client I had. The trader was able to make consistently profitable trading decisions while trading in a simulated account. I verified the hard numbers he was producing. However, when he went to his funded account, he would start losing.

So, I went to his office and just watched and took notes. We started with him actively trading the simulated account. I paid attention to his physiology, posture, breathing, skin tones. He was relaxed, his voice was low and easy and his posture showed a relaxed openness.

Then he switched to the funded account. His breathing became more rapid, he hunched closer to the screens, his foot started bouncing up and down, his face became slightly redder, while his jaw tightened.

The first step was to just report the changes to him as they were happening. This in and of itself was a revelation to him as the light bulb went on in his head. He had not been aware of these dramatic change in his state of mind.

Then we talked about how he was feeling and the quality of this thoughts. Both of these reflected the changes represented by his physiology. This allowed us, just by asking questions, to find the triggers (his dad’s voice in his head) that created these changes.

No advice, no therapy, just being a mirror to increase the trading awareness. By the end of the session, he was like a new man who just had a 100-pound weight lifted off of his shoulders.

So the radical approach to being a trading mentor is not to give advice, but to improve awareness, so that the trader can work through the issues that they have, create new neural circuits, new behaviors that serve them better and do it in a way that will stand the test of time.

Richard can be contacted at rich@mindmuscles.com