Why a Mentor is Like a Personal Trainer
11/15/2013 6:00 am EST
Option mentor Dan Sheridan shares the inside scoop on what newbie traders should look for when conducting due diligence to find a good trading mentor.
SPEAKER: My guest today is Dan Sheridan. We're talking about mentors and how you find a good one that fits your trading file and can really help you succeed in this business. Dan, first of all, what kind of questions should I be asking of a mentor to see if it's the right fit for me?
DAN SHERIDAN: Here's key, I think when you get a student, when I get a prospective student, it's funny they say well Dan, let me tell you your goals, and I say well let me do a little ESP, let me tell you your goals. Most people come in and it's shocking, but when I get people come in the options trade, they said my goal is to make some monthly income, and I said you're the first person I've ever talked to that would want monthly income, being facetious here, but I think the main goal, the goal is to make monthly income and be consistent, I think the most important thing with a mentor, and that's what we do, is if you're going to deal with someone who's going to educate you, that's okay, but educate without live trading.
I think the most important thing is someone who's going to help you make a plan but you trade, that they're going to be with you and hold your hand for at least six months. Two or three sessions of mentoring or some education. I'm not saying there's not a place for that, but I think ultimately if you're going to do it you have to give somebody, and what I do is not based on charts. It's based on a repeatable trade, so if you're going to have somebody do something, you have to give them something repeatable that they can do month after month, but you're going to have to be there with them holding their hand for six months. I think that live trading, repeatable trades, and that's where I think 99 percent of the people out there don't do it because it's more work.
SPEAKER: Let me ask you about the idea that I can look over somebody's shoulder for six months and exactly replicate what they do. I think a lot of people think that that's the idea behind mentoring, but my sense is it's not.
DAN SHERIDAN: No, I'm not talking advisory where 200 people come in a room and watch you trade. I'm talking about, we do it kind of I'd say the hard way. I deal with people one on one. You get to know them, you get to know their thinking, their quirks, their whatever it is. You set a plan based on them, right, so it's not 80 people follow me and then go do it. Here we're doing it, we set a plan, and then like a personal trainer for seven months, they're doing it. They didn't come in just to see me do it, right. I should be able to do a little bit, I've been doing it for 25 years, but they're doing and I'm going to be available and work with them over six months on a live trading plan. Let's say it's $10,000 and the goal is to make 5% a month, that's the goal, right. There's a goal, but they're doing, so the goal is after six months they can leave the nest and do it themselves. That's the only thing that makes sense, because that's what people want. If you're with them for six months and now they have to do live trading on their own, that would be a problem.
SPEAKER: I would think that one of the most important things is that your mentor is actually trading themselves. We've seen a lot of mentors who don't trade anymore, and that seems to be a problem.
DAN SHERIDAN: Yes, it is. I could tell you honesty, we're usually pretty busy, problem is I'm mentoring all day long, all day long, which is different. When I was trading full time I was trading. Here you're mentoring, but all our mentors are trading, but again is that important? Yes, it is important that there's a level of expertise, but even more important is let's say you're a mentor and you're trading but your students aren't trading. How are they get to get from A to Z? So yes, it's assume that the mentors know what they're doing and they're trading, but more important if the student isn't training, if the student isn't live trading on a plan, how are they getting from A to Z? You can't do a blood transfusion between the successful mentor and the student. They have to do it, so yes, I think that's just the beginning, due diligence, does this guy know what he's doing, but then B, the student has to do it. Anyway, that's my two cents.
SPEAKER: Dan, thanks for your time.
DAN SHERIDAN: Thank you.
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