Trader coaching and mentorship

One thing I haven’t written enough about is the role of other people in a trader’s career. I was fortunate to have worked as an FX trader at commercial banks for 15 years before going out on my own. From day one until the day I left, I was constantly learning from some of the best traders in the industry. A few of them were better traders than me, and if they decided to apply their skills towards trading personal capital like I did, they would have made a fortune bigger than what they earned in banking. A handful of traders I worked with were real pricks, but I learned from them all the same. Mentors and teachers are enormously important in trading, yet people don’t talk about them enough because trading is seen mostly as an individual endeavor.

Unfortunately the ecosystem I was brought up in is slowly disappearing. Banks don’t hire a lot of traders anymore, as the roles that human traders play in a trading business have largely been disintermediated by technology. There are few, if any, breeding grounds for skilled and hardened global macro traders. Sure, hedge funds still hire traders, but the buy side doesn’t provide a long career runway with the generous salary that would encourage a trader to stick it out for many years while he figures out how to become consistently profitable. I didn’t even branch outside of the FX asset class until year 10 of my banking career - imagine if I only had three years to figure out trading for myself!

Every elite athlete at the top of his game works with a coach. Startup founders seek mentors, and C-suite executives work with executive coaches. Trading is no different. Having a mentor or coach in trading is crucial due to the highly individualized nature of trading and the large psychological component that goes into every decision. At the very least, a coach plays a role as a third-party observer who can see when you are going on tilt or becoming overconfident, when you yourself are blind to it. A great coach can help a trader break through mental barriers and destroy bad habits, and even help develop trading superpowers that he didn’t know existed.

There are plenty of successful traders out there, but my experience is particularly unique. I’m one of the few traders I know who have successfully managed the transition from trading at an institution to trading personal capital on a long-term basis. The subset of traders who trade both global macro and crypto profitably is small. After I left banking, I realized I needed better tools to survive trading on my own. I’ve developed an arsenal of trading superpowers, such as expanding my zone of competence to profitably trade new asset classes, increasing my emotional capacity to manage more concurrent positions and larger positions over time, and learning how to manage the emotional swings of trading so that I can maintain a thriving family and social life.

Over the years, I’ve had fellow traders and former colleagues come to me for advice and mentorship, in addition to discussing market views. I found these conversations rewarding, and decided to give back to the trading community by starting a formal coaching and mentorship program via my blog. I didn’t advertise it at all, but a handful of traders came across it and signed up. Since starting the program, these are some of the things I’ve helped them with:

• A talented but highly leveraged crypto trader was delivering phenomenal returns, but suffered from the occasional large drawdown, and employed trading strategies that increased his risk of ruin in the long run. I helped him fine-tune his position sizing based on market conditions and his emotional confidence, and pointed out aspects of his trading strategy that were putting him at risk of ruin. I also gave him tools to overcome hesitation when it came to stopping out losing trades.

• An FX bank trader had been delivering a strong performance every year and had a steady pnl curve, but was having trouble increasing his position sizes despite his risk limits providing plenty of room. I provided a process and framework for increasing his position size by 2-3x without going on emotional tilt, and helped work through some of the mental roadblocks keeping him from sizing up.

• One couple with busy professional careers had a lot of cash sitting on the sidelines but little bandwidth to figure out how to invest it and make it more productive. I gave actionable and immediate solutions to make their cash work harder for them, and helped them allocate to a “forever portfolio allocation” that had a history of delivering strong risk-adjusted returns with minimal intervention.

• Here’s what one trader wrote about his experience with me:

  After being impressed with the transparent and to the point format of the Fidenza blog, it became one of my regular reads as it was a good cross-section of macro and crypto, the two markets where I spend the majority of my time. After attending a couple of video Q&A sessions for the readers with Geo and watching some of his appearances on Real Vision, I decided to sign up for the more individualized founders program as I was working on becoming a better, more self-aware macro trader.

  During the first couple of months, the markets changed a bit as crypto started trending up and the bull cycle started unfolding, so I decided to focus on crypto more intently. Luckily Geo had a really good understanding of everything crypto, and I found it helpful to shoot ideas back and forth to get his perspective on various assets, trades, narratives and psychology around all of these things in a portfolio management context. Geo also gave great advice regarding finance careers that was very relevant to my situation and how to plan out getting to the promised land of trading for yourself and not relying on salary/bonus work (as that is the ultimate goal).

I’ve also mentored young and aspiring traders on career advice, answering questions such as what business areas and trading desks to target when starting out at an investment bank, how to best position oneself for competitive trading jobs, and how to develop trading skills without the benefit of being in a paid trading role.

If you’re interested and would like to know more, feel free to respond to this email or DM me via the Substack app. Check out the Trader Wisdom section of my blog, where I post free posts to educate traders. You can find out more about my trading journey via this interview I did with the WLD Show.