Introduction

This article is to share the experience of undersigned as a Personal Coach & Mentor to clients on (Stock Market) Technical Analysis, especially to highlight the common misconception on the purpose and approach of the coaching and mentoring. It also describes some of the frequently asked questions and better understanding of the basic principles of Technical Analysis.

Objective and Focus

The objective of playing the stock market game (buying or selling of shares or trading) is obvious and straightforward : i.e. to make some handsome monetary gain. However, objective is very often mixed up with FOCUS. While playing the market game, the FOCUS is not and should not be on "making money", but to pay great attention to the various technical theories, signals, potential change in market direction. Just like a disciplined and good sportsman, e.g. badminton player: during play, the player focus is not on winning or walk home with the trophy, but the many strategies, skillful maneuvering, techniques and lessons from past experience. Good focus with appropriate skills application gives rise to greater opportunity to meet the eventual objective. In another word, winning the game, or making good profit is a CONSEQUENCE of acquisition of right Knowledge, disciplined application of techniques to personal mastery of essential skills.

Knowledge Techniques and Skills

The knowledge domain of technical analysis of stock market involves many theories, statistical indicators, e.g. Elliott Waves, Trend, Cycle Time, Fibonacci, Stochastic Oscillator, etc. While acquisition of vast amount of theoretical knowledge with advanced sophistication is no guarantee of trading success (more often than not, much confusion is created resulting in more losses), ignorance of some fundamental principles of the theories can bring regret also.

From good understanding of the technical theories, techniques and rules need to be developed, practiced, reviewed for continuous improvement towards personal mastery of necessary skills. This calls for patience and discipline.

A coach essentially helps clients to focus well on the above.

Distinction between Coaching and Teaching

While some theories can be taught to understand the basic principles, the actual act of trading cannot be taught but coached. Teaching a theory e.g. 2 + 2 gives a fixed answer or solution "4". But coupled with effective coaching and creativity thinking on the part of the clients, the taught theoretical rule of addition (e.g. "2 + 2 = 4") can produce synergetic result of 5 for someone, 7 for another in the field beyond determinate objects.

Stock market unfolding prices and movement are a subject of probability, not certainty. Teaching may be carried out on the theories of technical analysis, decision to buy or sell to satisfy the objective of making monetary profit is entirely the client's, guided or coached based on theoretical principles or learned experience.

Purity of the Technical Analysis Theory

The discipline to stick to purity of the technical analysis theory is most difficult to many clients. They tend to be influenced by other consideration like fundamental consideration e.g. financial performance of the counter / company, or rumor / speculation or merely logic of the day in reference to certain events. Sometime they are swayed by words of certain fortune teller.

It will be impossible for scientists to carry out experimentation successfully, if instead of basing on the original theory (to be proven right or wrong), they jump from one phenomena to another.

This flicker-minded behavior of clients / traders is due to weak belief system.

Belief System and Fundamental Principle of the Technical Theory

There must a compelling belief in the technical theory that the market forces as depicted by the graphical pattern (for which the many technical analysis is carried out) is the RESULTANT of ALL the factors that affect the market behavior. The factors can be the fundamental financial performance, economic forces, political, social, intellectual or professional input, or men on the street, housewife, speculators, syndicate groups at play, corporate insiders, etc. etc.

With such belief, the focus is always on the resultant forces or pattern and plan for the most probable unfolding pattern, guided by the above mentioned knowledge, techniques and skills.

Psychology

At the end of the day, the stock market trader is not fighting the market forces, as it is always a suicidal attempt to fight the gigantic natural forces. The strategy is to understand the pattern, trend and direction of the stock market forces and ride with the high tide, and let go with the receding wave. This calls for identifying the enemy within (not outside) : the trader own psychology of anxiety, fear, insecurity, fantasy, illusion and human values.

Mentoring service helps to address this important aspect of psychology that influences trading behavior.

Why certain questions from clients will Not be answered?

Clients have tendency to ask "Which is the best stock to buy or sell now?" "Could I go into the market now, or should I retreat?". These are the questions to the consultants or fund management entities, not coach / mentor. The later will revert back to the above : knowledge domain, techniques, applicable skills and psychology, coaching and mentoring the clients to make up their own decision and taking responsibilities for the eventual outcome.

The fundamental role of coach / mentor is to help someone to explore his or her own potentials, capacity and capability so that the client can take effective action to achieve what is desired to be achieved.

Why can't the coach be the most successful trader then? What really is the value creation of a coach / mentor on stock market technical analysis?

Similar to the fact that the most famous golf coach needs not be the winner of the golf tournament, but his student, or Edward de Bono maybe the "guru" or great coach on Lateral / Creativity Thinking, the most creative ideas may come from the students (not the guru or coach).

The role of the coach and mentor on stock market technical analysis needs to be understood in the following light :

• the coach needs to have the theoretical basic of the subject knowledge
• the coach is competent to transform knowledge to systematic methodology / techniques for application
• the coach has gone through many years of joys and frustration of the above process of knowledge to practice, thus acquiring the basic skills
• the coach, acting as mentor, is honest to examine his or her own personal strength / weakness in term of psychological make up and remains objective in helping the clients to identify the same. Some coach / mentor is poor in this aspect of self discipline, thus making him or her not a successful trader, but he or she must be cool and objective to guide the clients as his or her own psychology or emotion are not entangled and involved.

Advice to Clients

Client is often advised to build his or her own homepage (e.g. Geocities Free Home Page) on the lessons learned from the coaching and mentoring sessions on stock market technical analysis. This has many advantages:

• the homepage acts as a note book for register and deposit of lessons learned, distilled and consolidated by the client himself or herself.
• the homepage is to be constantly updated and reviewed, thus applying the principle of continuous improvement. In this way, the client will appreciate his or her own personal growth and learning.
• the homepage is a psychological commitment made by client himself or herself in serious learning, viewable by the Internet community (if they surf on the site)
• the homepage acts as community for learning forum when attracted visitors make their comments, suggestions or request for help.
• the homepage makes communication easier with undersigned to track and monitor the client progress.

Similarity with achieving organizational excellence and / or personal attainment of goals in life

The above described coaching and mentoring approach and principles are similar to the objective of achieving organizational excellence or personal vision in satisfying goals in life. To create the structural tension between Ideals (e.g. making handsome profit in stock market, business performance or personal aspiration) and the Current Reality, the gaps need to be filled with :

• Appropriate Knowledge / Theory
• Application of Techniques / Methodology
• Skillful Practice towards personal mastery
• Self examination of own mental model, psychological make up, motives and human values

The above is the essence of Learning Organization principle, in our particular example with respect to client on mastering skills in stock market game, is the Learning Individual.

End.