Questions You Should Never Miss Asking Your Mentor

Questions You Should Never Miss Asking Your Mentor

Trading the financial markets is not a walk in the park. It’s not an easy road for one to walk alone. It’s easy to get lost in the midst of indicators, strategies, systems, signals, robots, books, and everything sold on the internet in the name of forex.  There is a lot of great content on the internet that is available for free that one can make use as a resource to learn how to trade the forex market. You don’t necessarily need a mentor.  The mentor’s role is to help join the pieces  of all those resources and make sense of it so it can be translated into actual trading. In otherwords, they help shorten and quicken your learning journey


Having a coach to train you and a mentor to guide your walk can be the difference between success and failure for many.  They help sharpen your skill  by straightening what would have been ups and downs and trials and errors by lending you their valuable trading experience. Make use of every opportunity to gain from their experience. The easiest way to learn is by asking. Learning from your own experience is good, but be sure of the pains that come with it, and it doesn’t necessarily always end well. Learning from another’s experience is therefore the best shortcut to the desired end.


Here are some of the questions I deemed necessary for an aspiring trader of the financial markets seeking a mentor to pause to those that would mentor them:


What Are The Markets?

You need to understand what the markets are. What might be confusing is the fact that there is no face to face interaction between buyer and seller. This is different to the common every day markets known to many. Your mentor needs to define for you the particular financial market you are seeking training in and how it operates.


Who Can Trade Forex?

You may need to be aware the degree of ease or difficulty trading currencies. This question ultimately begs for what is needed to ably trade the markets with ease and whether anyone including yourself under your present circumstances can trade them and become successful.


Having confidence and assurance that anyone with a proper training and good mentorship can trade the markets is extremely important. As an aspiring trader, you need to be assured that despite your nature of being, trading experience, and professional background you can learn and trade forex at a professional level. This aids your mental resolve to learn and as long as the will is present there’s without a question a sure way.


What Is The Best Financial Market To Trade?

Every market has its own nature and life. The opening and closing time is different for every market be it stocks, cryptos, forex, commodities, or indexes. For example, the forex market is open 24hours a day from Sunday evening (early Monday morning in some parts) to Friday night with with three major sessions including Tokyo, London, and New York. These sessions overlap meaning that clients are able to trade at most hours within the Forex markets. However, stock exchanges across the world open at different hours.


Different markets function differently. However, all financial markets are interrelated with each other. Rising equities can increase the demand for the domestic currency in order to invest in stocks, for example, which can lead to an appreciation of that currency. Similarly, falling equities can decrease risk appetite among investors and support the price of gold, which is traditionally considered as a safe haven.


You need a mentor who will ably differentiate for you the several financial markets and how they function and help you decide the best for you to trade and how to take advantage of the intermarket relationship that exists among different markets.


How Many Markets Should I Trade?

There are many financial markets in the world as our free course covers you can trade but not everyone is for you. You can trade currencies, cryptos, indexes, equities, bonds, commodities, stocks, or derivatives. Each of these markets have different driving factors making each take on its own character, nature, and life. However, the trading concept in each of these markets is the same, with just differing macroeconomic influences that affect the different instruments in each market.


As a beginner, you need to focus on one and have a complete grasp of it as it can help transfer the same concept to a different market. Brokers offer different minimum trade sizes and maximum leverage for each market and this could a cause of confusion mixing them all for a beginner



What Is Your Trading Experience?

 You need to know how long they’ve been trading and the length of their experience in the different financial markets. You need a tutor who is experienced at what they are teaching. You’re not going to learn forex trading in a day. It demands discipline and patience. That means you need quite some good quality time to learn forex, and having a mentor without experience only makes your journey longer. Mentors that have been in the markets long enough have encountered all sorts of market events and reactions and have learned a great deal in how to handle them. Note however that such mentors who know how much time they’ve invested and the wealth of experience they seek to pass on may charge more and may not be affordable to you much as they’re necessary.


What Is Your Trading Strategy?

Not every mentor will let his trading secrets be known in specificity, but at least they will reveal what they look at before they consider a setup for a probable trade in generality. Otherwise, they should reveal their trading procedures including how, when and where they open positions in the market. This composes of entry conditions, stop areas and targets. At the very least, a mentor should be able to tell you how they analyst the markets to come up with entry and exit points. This will show you their fundamental and technical approach to the market and their short term and longer term perspective when trading


How Do I Read Into The Markets?

There are several ways of understanding the behaviour of the markets and the likely outcomes such as impulsive moves or corrections resultantly. A good mentor should be able to explain to you the different ways of reading into market behaviour through different analysis methods. It could be technical, fundamental, or sentimental. Different trading platforms come equipped with different analytical tools that can be utilised to aid traders’ analysis. Many depend on one style of analysis and are profitable with it. This dependence on one trading approach is what defines traders as technical or fundamental traders. Those who are able to combine two or more of these approaches have a better edge


When Should I trade?

There are different trading sessions in a trading day with some overlapping others making it possible to trade 24hours a day five days a week. This however doesn’t mean you have to be trading all the time much as you could. Certain times and sessions are ideal for certain trading styles.  They present better profiting opportunities than others. For example scalpers might have a difficult time trading during the early Asian session as spreads tend to be high. Besides, day traders and scalpers depend more on volatility and so the London and new York sessions may interest them better. A forex mentor should be able to answer this depending on your trading style


How Many Trades Can I Take Per Day?

This is a question many new traders love to ask. They tend to think forex trading is ‘get rich quick’ kind of business. The idea of many trades leading to more profits cannot be farther from the truth. Over trading can only be detrimental to your account balance. There are different styles of trading and each avails different opportunities at different intervals. Scalpers and day traders trading frequency is higher than swing and position traders. A scalper can trade anywhere between 10 to 100 trades a day, but that doesn’t necessarily translate into more profit than the swing trader who might take a trade or two in a week.


You don’t have to be in the market every day to make decent profits. Volume doesn’t always mean more; it could mean less in terms of profitability. Trading should be based on good analysis not random entries. It has to be an informed decision taken not an emotion driven decision. As a trader your analysis of the market directly affects the number of trades you can take in a given time. It’s not uncommon for swing traders to go several days without a single position taken or for position traders to go several weeks.


So really there is no single answer to this question. Professionals will take as long as it takes for the right trading opportunity to present itself.  So as to how many trades you can take, there’s no straight out answer. A good mentor should help understand the trading style that might suit you and then have you develop strategies that fit it. and thereafter your strategy should determine how many trades you can take on a particular day depending on whether there are opportunities that meet the entry criteria or not, and not all days will be the same


How Many Trades Can I Have Running At The Same Time?

To answer this, it really depends on the opportunities available in the market. Professionals will take every available opportunity that presents itself since they view profitability as a possibility over a series of trades. as such, being selective and leaving out some may affect their probability of profitability over time. However, this doesn’t mean taking trades on every single currency pair.


Some instruments are correlated and trading them both of the in the direction of their correlation –positive or negative is essentially opening two positions on the same currency pair. This means you are doubling your risk on one position. Let’s take for an example two currency pairs that move the same and happen to present opportunities at the same time.


If you take both opportunities at the same time risking the same risk on each of them, it will be risking twice as much on price moving in the same direction. This is so because a loss on one would mean the loss of the other since they move the same. If I then must trade them both, its only wise that I halve the risk on each to stay within my intended risk portfolio.


On the other hand, if they move in a similar way but present opportunities at different time, I can trade them both with the full risk on each but trading one at a time and then trading the other after the first is safely into profits with my stops on it at breakeven.


So, the number of trades running at the same time depends on the number of opportunities available. Your mentor should help you understand the idea of correlation and its associated risk and how to manage that risk.


How Much Capital do I Need To Trade Forex?

This all depends on your trading goals and the mentor should be able to spell it out for you. Today some brokers allow as low as $10 deposits as capital for trading an account. Off course this is only good for practice as you can’t earn a living off it much as  you may want to regard it as an investment. What it does though is to give you the hint of what it feels like to trade your real money in real live account. You don’t need to put in much as you might lose it all as a learner.


With your mentor you should determine your level of skill, trading experience, and trading goals, before determining how much you need to start trading . A good mentor should advise you to start trading on a demo with the same amount you desire to invest on a live account so you can get the feel of how to handle such amounts on a live account once you finally invest it. The fact that you’ve handled it before helps you manage the pressure of the same account size.


How Much Of My Capital Should I Risk Per Trade?

You cannot perfectly predict the market; you can only react to what it presents. The market will always do its thing no matter how good your analysis is. This uncertainty of market movement demands good risk management.


Trading is about probabilities, nothing is guaranteed. It’s about taking educated guesses. That’s why correctly analyzing the markets before taking any positions is critical. And however good and detailed your analysis is, only a small portion of your account balance is should be risked on any single trade. The rule of the thumb would be 1% per trade but it depends on the account balance and the trader’s risk appetite which could mean less or slightly more.


Nobody knows what the market will do from the time we place the position.  When we place a trade, it’s all about probability – we believe that our trade has a higher chance to win than to lose and pull the trigger to open the position a good mentor should help you know how to protect your capital and control your losses


How Much Profit Should I Target Per Trade?

Beginner traders need to be taught to both take profits and cut losses. No one every became broke doing both. The risk on every trade needs to be defined as well as the target before taking any position in the market. How much to risk or target should be expressed in percentage terms in relation to the account balance. For example, risking 1% of the total capital and aiming for 3%. That would be a risk to reward ratio of 1:3. That means for every dollar risked, three dollars are aimed for. The amount of risk and targets should be defined by the strategy you trade with.


Strategies need to be tested out to know their best risk-reward potential and maximum drawdowns. It’s so crucial as it helps to boost confidence in taking trades and in handling the emotional chaos that arises with a string of consecutive losses and extended drawdowns. Also, since it’s been tested over a series of trades over a long period of time, the data gathered can easily be relied on to help give your trades room to run to their targets without interfering with them such as moving stop losses or prematurely closing winning trades before they reach their targets. This is so important as profitability for professionals is over a series of trades no matter how bad the win-loss rate is.


How Much Can I Make Trading Forex?

This type of question defines your trading goal. Pay attention to the answer your mentor gives. If it’s not realistic, he may not be the best mentor for you. For example, if he promises to help you double your account in the next few days, or guarantees profit on every trade, then it might be better you get someone else. Trading is a probabilities business with all outcomes a possibility – win, loss, or breakeven.


How Do I Control My Emotions To Deal With Loss?

There can only be three different outcomes on any trade and as a trader you should be willing to live with whatever the come is, or you have not business trading. It’s always a win, a loss, or a breakeven trade. some of the best professionals have the worst win-loss ratio. However, they know that they’ll be profitable since they use very strict risk management rules on every position they take and risk only a small percentage of their trading account balance on every trade. This ensure that their wins are extremely more significant than their losses enabling profitability over a series of trades. Losses are inseparable from trading; you only have to manage them.


Find a mentor who can help shape your mental fortitude to handle losses. A proper psychological training is important before engaging in forex trading no matter how good a trader you might be or a strategy you might have. Its not uncommon for a would have been a wining trade ending as a loss on a position prematurely closed out when it went against you only a few pips because you couldn’t handle the small minimal drawdown you saw as the trade ran yet if let run would have been your best trade in a while. Professional traders trust their analysis and allow their trades enough room to run.


How Do I Trade Around The News?

Trading around news events is not a cup of tea. First of all, you do not know which way the market is to go after the news releases. Secondly, even if you predicted it right, it could move first significantly in the opposite direction, long enough to blow any account depending on the trade size, before reversing and moving in the predicted direction and all this in just a matter of minutes.


Slippage and spreads are extremely prohibitive especially during high impact news events. The best way to trade the news would be early entry before release time or much later after the release when the chaos is settled. Scalpers usually want to profit from the volatility these events generate but you need to be seasoned enough to handle it. The extreme volatility can lead to heavy losses for scalpers and day traders and might need to close out positions entered before the release. Trading is business. You shouldn’t never treat it like a gamble or a get rich quick scheme.


Swing and position traders on the other hand don’t have so much of an issue with such events as their stops are usually based on higher timeframes market structure safe enough from the news spikes. Besides, higher timeframe price direction trends tend to hold, unless of course the impact if the news is so heavy as to change the market trend as was the case of the 2008 financial market crisis. Otherwise traders with longer-term approaches need not to close their traders during news releases. They just need to manage them.


What Are The Best Pairs To Trade?

Different currency pairs have different behavioural patterns. There are different micro and macroeconomic events that drive volatility of different currencies more than others. That’s why different forex pairs behave the differently during certain market events. Even without such events, these pairs have especially major one have different liquidity, volatility and active market hours and the difference in liquidity and volatility is large between them. A good mentor should advice beginners to focus on the majors for starters given their volume of trades in the market that makes them extremely liquid and highly volatile, and also given their low spreads, and minimal slippages. Such pairs include EUR/USD, USDCHF, USD/JPY and GBP/USD


Who Can Trade Exotics?

Trading exotic currency pairs is not bad. However, depending to the style of trading, exotics can be quite challenging. For a scalper, the volatility of these currencies would have been a treasure. These currencies can move thousands of pips in a matter of hours but the spreads and slippages are prohibitive. They are not ideal for short-term traders. It would be safer focusing on the majors.

For swing and position traders however, the more the instruments available for trading the better. Opportunities for traders with a long-term approach are sometimes far and wide in between. So it can only make sense for more instruments to be present on the table to increase the trading opportunities. The volatility of these pairs is low the fact that they are less traded. As such, trades taken on them tend to take long to playout. This makes it all the more important to take note of the swap/rollover fees on them before trading them. The fact that they might take long to reach target or stops, the rollover fees might affect you negatively in the case of loss as it would bring the total loss to more than you intended to lose.


Engage your mentor to know whether it’s wise to trade them and whether they fit in your trading style


How Available And Accessible Are You?

Before you choose a mentor, you need to know how much time they have for you. A mentor is one who is supposed to avail time however little for the learner. The availability and accessibility of the mentor will determine the period it will take to learn from that mentor. If they’re too busy for you, its best you find another. Your mentor should be available for questions, advice and guidance as regards your learning. They should be accessible for help when needed. You woukdnt want a mentor you cant reach.


Godfrey Kakulu

Your Forex Trading Coach and Mentor

Professional Training and Education in Forex, Cryptocurrencies, Indexes, Commodities and Precious metals


Godfrey Kakulu

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