Benefits of a Trading Mentor and How to Choose One

1. Personalized Guidance: 

We all do things differently, and the same is true with trading. Every trader has their trading strategy, and there is no better way to refine that strategy than getting personalized advice from an experienced mentor. A mentor not only provides advice to improve the trading strategy but also assesses the trader’s strategy and puts in the effort to understand the underlying thinking behind the strategy. 

Let’s suppose that there is a pattern in a trader’s strategy where he sets the take profit too low and ends up missing the opportunity to bag the maximum profit. Here, a mentor’s personalized guidance can be of huge help as it can help the trader understand the cause behind this and provide guidance on how high he can go from his usual take profit.

2. Learn from Experience: 

Trading mentors usually have years of hands-on experience in trading. Hence, when they start providing mentorship, traders can benefit from the long experience of their mentors. With the experience of their mentors, they can get an idea about what to expect in a volatile market. With the guidance and experience of mentors, traders can better judge which trades to pick and which to avoid.

Take the example of a situation where a big news or update is scheduled. An experienced mentor can guide their mentees on what the impact of the news can be on currencies and how it can affect the market.

3. Avoiding Common Mistakes: 

When a trader is being guided by a mentor, he can very easily avoid the common mistakes that beginner traders make. He will have a clear knowledge of the basics, such as an understanding of the risk-reward ratio, concept of leveraging, risk management, overtrading, and more. 

For example, a new trader without the privilege of having a mentor may end up using all the leverage they have. Prop trading firms offer leverage of up to 100x, which opens opportunities for earning amplified profits, but at the same time, it can cause amplified losses too. Thus, a mentor can guide you about how much leverage is too much leverage for a given situation.

4. Overcoming Psychological Barriers: 

In trading, the psychology of a trader is as important as their strategy. Whether a trader has a very high-risk appetite or a trader is too afraid to take risks, in both cases, the trader may land in trouble. Hence, it is important to find a balance between risk-taking and trading safely. If a trader takes too much risk, a single wrong trade can wipe out his capital, and if the trader does not take risks, he may miss out on the opportunities to earn profit.

Let’s get it clearer with an example. It usually happens that after a couple of adverse trades, a trader starts hesitating in taking risks. This is what we call psychological barriers in trading. In such situations, a mentor can help in seeing the situation from a different perspective and let go of the past and mental barriers.

5. Real-Time Feedback: 

Another major benefit of having a trading mentor is that you can get real-time feedback on your strategies and trades. As much as it is important for improving and refining your trading strategies, it can help to avoid huge losses. When a mentor actively provides feedback, the chances of huge losses are reduced. 

When a trader gets real-time feedback on his strategies, he can improvise and improve his strategy for the future.

6. Accelerated Growth: 

A good mentor can help a trader accelerate their growth by showing them the right path and helping them create a sustainable trading strategy. It is obvious that it is the trader who eventually has to trade in the market, but knowing what he has to avoid can help a trader grow. 

When a trader has guidance from a mentor, he can avoid years of trial and error.

7. Resources and Community: 

There is no doubt in the fact that mentors have access to more resources, tools, and community. When a trader starts getting mentorship from an experienced mentor, he may also get access to the useful resources of his mentor. There are also chances that the mentor takes his mentee to different trading conferences and helps him create his network in the trading community.

These are just some of the benefits of having a trading mentor, and there are hundreds more ways a mentor helps their mentees in trading. However, finding a good trading mentor is a task in itself. It takes time and effort to find a mentor whose ideology aligns well with yours. Let’s talk about how to choose the right trading mentor.