A little boy once found a jar of nuts on the table. "I would like some of these nuts," he thought. "I'm sure Mother will give them to me if she were here. I'll take a big handful." So he reached into the jar and grabbed as many as he could hold. But when he tried to pull his hand out, he found the neck of the jar was too small. His hand was held fast, but he did not want to drop any of the nuts. He tried again and again, but he couldn't get the whole handful out. At last he began to cry. Just then his mother came into the room. "What's the matter?" she asked. "I can't take this handful of nuts out of the jar," sobbed the boy. "Well, don't be so greedy," his mother replied. "Just take two or three, and you'll have no trouble getting your hand out." "How easy that was," said the boy as he left the table. "I might have thought of that myself."
Maybe I don't understand. What is there to do? You gave him the "grail" already, the only difference now is that he is starting his journey with half a bankroll. Let him use that for the next 6 months (or go back to your original year) and continue with the original plan. Joe.
From reading your post, it is not clear if you spent much time with him on imo the most important aspect of trading, and that is trader psychology. One idea would be to let him carry on without your help, so that he can hit as you say a personal low and then step in to help him begin the process of 're-wiring' as you write.
I still sometimes have this problem of breaking my rules. Both job and oil report came out negative but instead of waiting for real TA confirmation, I shorted on 1st red candle forming. Got stopped out of 1st short, but 2nd effort made me double profit of what I lost. However, I agree with the other poster, tell him to not trade pink sheet stocks, that is one of my rules. Also, it has not been a year, tell him it takes at least a year to learn this stuff if not much longer, and its like any other job, tell him you can't become a doctor in 6 months, if he really interested in a career in trading, tell him this is part of his tuition to learn.
I was thinking the same thing. It sounds like he was doing fine until a moment of weakness. Virtually every trader has been there, and I really don't think you can fully learn this business without that experience. Too much success too soon inevitably leads to overconfidence and careless risk management. The question is, do you think that the lesson was learned? I've watched a lot of traders make the same mistake over and over, getting in way too big and then getting stubborn. I believe there are some people who simply cannot be successful in trading, due to some type of compulsive personality traits. They are in it for the thrill of winning, and they will lose any amount just to get that juice for a few seconds. If they weren't trading, they would at a casino, or a track, or even sitting in a smoke-filled bingo hall. If they don't have the $$ for any of that, then they would be buying lotto tickets. I can't understand why someone who has in front of them a detailed trading plan that has been working, trading liquid stocks, would even be wasting time looking at pink sheets. How close a relative are we talking about here, and what exactly are they hoping you can do for them? Trade their account back even? Spend some more time mentoring? If you are breaking the original deal, then they need to step up and do something more, maybe keep some kind of journal. They could provide you a copy periodically (you don't need to read it, just to verify they are keeping up their end of the bargain). Keeping the journal, if they are not doing so already, would be a valuable exercise in and of itself.
To be honest, I'm very surprised that he even followed it for six months. If you would've asked me in the beginning, I would've guessed three months instead of six. You also have to realize, that a year looks like very long time to a roookie. Some people are more impulsive than others. Doesn't mean they can't be traders. Everyone has different learning patterns. It can take more time for some than others to get to that level of maturity. Personally, I think you should be glad that he broke the "mentor's rules" and learned his lesson at an early stage. With all this being said, I agree with my7tvette and u21c3f6 that you've given him the holy grail, so what is he looking for? Just to let him feel his punishment, I'd suggest that the maximum you should offer him is just see his trading journal once a month or less. Just say you'll look but won't comment on anything. Make sure that the complete year goes by till you start giving any comments. Let him know that he might be used to breaking the rules which is why he is coming to you before a year is over, but you don't break rules. Thus, you'll stick to your original plan of helping him after a complete year has gone by. In the mean while, he should stick to the original set of instructions given to him.
I agree with this- assuming your strategy aims for consistency and not the home run, tell him by trying to help him get his money back quickly he'd be breaking the rules yet again. Stick to the plan, see how it goes. If at the end of a year he made money trading your strategy but was down overall due to this mistake, then it will be a success.
I have twice (once a close friend, and once a family member) tried to teach people to trade and both times they quit after a few months. The psychological/emotional issues that destroy patience and discipline are almost impossible to overcome. I think your point about hitting a "personal low" is a good one. What may be my first success story is my youngest daughter (just turned 10) who took an interest in trading about a year ago. She sits with me for about an hour every morning before she goes to school and is progressing quite nicely. In her I have seen the traits of a great trader: (1) No fear. No greed. (She's too young to have any hangups about money); (2) She's completely non-judgemental about herself as a trader. (She sees trading as a fun game and not a measure of who she is or whether or not she's a good or successful person because, to her advantage, those concepts are still very vague to her). Regarding teaching your friend, if he can't be more like a ten year old, then your chances of success are very slim. The fact that he's coming back you after he already knows what to do (you gave him the rules and he made money) is very bad sign. Why can't he put himself back on track if he knows what to do? Chances are he's freaked about the money and feeling like damaged goods because he screwed up. Most people who achieve success and then self-destruct don't need a trading mentor, they need a psychiatrist.
What is this "personal low" that everyone keeps talking about? What are ways that a trader get to this "low"? How do you know if you reached it? Why do you need to reach a low before you can become successful? *confused*