Since 1997, I’ve worked with many types of traders, from independent self-directed, to prop firms, hedge funds, bank desks, floor traders and others.

Many years ago I had a coaching client who’s trading partner had a fairly well known indicator named after him. I’ve also coached trading educators.

The other day I received an email update from a client who is trading his own account, also trades OPM, and is a trading educator with newsletters and chat room.

Here’s the first paragraph from his email:

How’s things going? I just want to thank you for your input. I believe I have found my rhythm again day trading. I have slowly started with small size and things are looking decent (see attached). Not major profits, but consistent so now I’m looking to increase size.

Attached to the email was a NinjaTrader Cumulative Profit Report from 11/1/17 – 3/26-18.

I replied to his email with a few tips for him as he looks to increase size:

  • Do it very slowly, in small increments.
  • Instead of thinking about size in a traditional sense (number of shares or contracts) try thinking in terms of risk units. For example, 10 contracts equals one unit of risk; with how many units of risk to put on a trade being determined by conviction level around the trade idea.
  • A key stat to track as you increase size will be very illuminating – avg hold times of winners vs avg hold times of losers. This stat gives a lot of insight into the psychology around how you’re managing your trades as you increase size. A stat often used on trading desks to help traders improve performance.
  • The idea that a trade is a trade regardless of size sounds good in theory, in reality we do treat trades of different sizes differently. Believing you should trade the same way with 1 as you would with 100 is not realistic. It sounds great in a book or blog post, but its not realistic.

In this blog post my goal is to share more than just some basic tips around increasing size. I also want to share my experience as a coach as a way to counter-balance possible stereotypes that exist about traders and, trading educators specifically.

Some people believe that trading educators don’t actually make money in the market, others (usually newer traders) believe that trading educators have some secret recipe for success.

There are many trading educators out there, and from my admittedly small sample size (my sample size is educators who I’ve coached or ones who’ve shared their track record with me in discussing possible coaching) I would say the percentage of ‘educators’ who make money trading is only a little higher than the universe of traders in general. Probably not a shock to many of you who’ve been around a while.

So why am I sharing this with you and how could it help you?

Perhaps the most important takeaway for you is the idea that even people who know a lot, who teach others, are still human and are not perfect.

A few years ago I worked with a trader from a highly regarded prop firm, Schonfeld. He had been one of Schonfeld’s top traders but hit a rough patch and reached out to me for coaching.

Historically this trader had very good performance and he had mentored others in the firm (part of the model of that firm). What impressed me initially about this trader was not just his success (sans the rough patch) but that a trader with his experience recognized that he needed a special type of help.

Here was a trader who was not about to let pride get in the way of improving his performance. That’s rare, especially among ‘well known’ traders. Without going into too much detail, the coaching helped him recognize how his response to the market changed around the time that he became a father.

A central premise in my coaching (and in my own trading) is that we don’t see the market as it is, we see it as we are. And this trader was now feeling greater responsibility since becoming a father and that had a huge impact on his perception of risk and uncertainty. Additionally, this brought up (previously subconscious) childhood issues for him around his own fathers approach to success.

If you agree that we don’t see the market as it is, we see it as we are; then it’s only logical to say that developing self-awareness, including working toward understanding the subconscious motivations underlying a particular behavior, will improve your interaction with the market.

>With limited capacity to take on new clients I’m only accepting traders who are absolutely committed and a good fit. If you think you’re one, email me first, if you’re still serious, we will have a phone/Skype chat to see if it makes sense to work together. I prefer to choose my clients as much as they choose me. You’ll know why once we talk. My self-paced course is another option.