[ZOSO]

I've had a few struggling traders ask me to mentor them, meaning they want to learn to trade profitably, but I have a real issue of charging big money upfront even though I think my time is very valuable. These traders have already been through the educational service merry-go-round and are already out $000s with very little to show for the so-called training they received.

Rather than turning these people away, I was thinking about a compensation plan based on their success from trading based on what I taught them. In other words, they would pay me a percent of their profit over a one year time frame or something like that. If they fail, well I make nothing, a risk I'm willing to take with them because I know them well and I think they have the mindset to win, but perhaps lack the right tools.

What do you think is a reasonable cut of their net profits over what period of time? I'm open to any ideas as long they're fair to all parties.

[brownsfan019]

Good question zoso and an interesting arrangement you might have there.

In a normal hedge fund the fees are 20/2. I think this can give you a base to work from. Since the 2 management fee is probably not practical here, I would say somewhere in the ballpark of 20-40% of profits can work.

Setting this up will not be easy if you want to do it right - meaning, proper legal documents would need to be in place. If not, you can try a gentleman's shake, but keep in mind once the intellectual property has been taught, the end user may not feel like paying you for much longer after that...

It can be a good situation for all involved if done properly from the onset. But it will not be easy.

[Minis Trader]

You are right the educational system can cost thousands of dollars for just a few days. From there a trader can take advanced classes which can cost them thousands more and they havent even made a trade yet. Here are two thoughts for you:

1- Since you are taking all of the risk up front have them pay you 50% of their profits (on a month over month basis). They have no risk at all to them.

2 - Charge them the higher fee up front and offer a money back Guarantee if they dont make back their money over the next 6 - 12 months trading your system.

Hope this helps

[ZOSO]

Originally Posted by Minis Trader »

You are right the educational system can cost thousands of dollars for just a few days. From there a trader can take advanced classes which can cost them thousands more and they haven't even made a trade yet. Here are two thoughts for you:

1- Since you are taking all of the risk up front have them pay you 50% of their profits (on a month over month basis). They have no risk at all to them.

2 - Charge them the higher fee up front and offer a money back Guarantee if they dint make back their money over the next 6 - 12 months trading your system.

Hope this helps

Those are good choices and you're right, I am taking on the risk so I have to be extremely selective and make a judgment if ones failure is do to poor method, psychological hurdles or both.

I'm inclined to go with option1 over a one year period. And although I'm not thrilled with taking any upfront money other than for out of pocket expenses, I'm interested to hear what you think the upfront fee should be for 2?

Thanks.

[steve46]

I think the subject of "due diligence" is an important one to introduce to this thread.

While one contemplates how to extract money from students (as is being done here), it is also important for students to have a way to make a realistic decision as to who to spend their time with.

I think the best way for a student to execute a due diligence process, is to ask and receive a reference (at least one or two) so that they can talk to people who have acheived success based on the teaching of a so called successful trader.

The interview process should include questions as follows

1. How long did it take before you started to make consistent money
2. What kind of drawdowns did you experience during the learning process
3. What if any additional software did you have to buy, what was the cost.
4. Did your screen setup become simpler or more complex
5. Did your pre-market process become simpler or more complex
6. How much time did your mentor spend with you on a daily and weekly basis
7. Did you spend time together via Internet connection, or in person
8. Were you able to relate to your mentor easily, or did it require some adjustment on your part
9. Were your mentor's instructions easily understood or did you struggle to "get it"
10. Describe your worst day as a student
11. Describe your best day as a student
12. When did you decide to leave that relationship and why
13. Do you continue to have success trading
14. Is trading your sole source of income
15. Knowing what you know now, would you enter into this relationship again

"Performance" is a two way street folks, sure the trader's time is important, but I think the student's time is no less important to him or her.

I think this comment brings a little more balance to the thread.

Good luck everyone.

Steve

[Minis Trader]

Originally Posted by ZOSO »

Those are good choices and you're right, I am taking on the risk so I have to be extremely selective and make a judgment if ones failure is do to poor method, psychological hurdles or both.

I'm inclined to go with option1 over a one year period. And although I'm not thrilled with taking any upfront money other than for out of pocket expenses, I'm interested to hear what you think the upfront fee should be for 2?

Thanks.

There are companies out there that charge anywhere from 2k - 5k for a two to three day program and there are back end sales of upwards of 35k after that innitial workshop. From what I remember trade the markets gets 5-8k for a week of mentorship (I think it is on the higher side). So to charge 2k - 3k up front for you teaching them seems fair to me.

You could also charge lets say 1k up front, to put some money in your pocket for your time and a % of their trading over the next year.

Hope this helps.

[waveslider]

Think about this from a business standpoint.

What you are doing is creating a stream of passive income when you take a percentage of your student's earnings. Do this with more than one student and you are creating multiple streams of passive income.

Ideally, the student will require incrementally less attention as they gain success (if the method and teaching are sound this could be true). In this case your business has scalability, in other words you are doing less work and making more money. Very desirable.

What I would recommend is that you have a requirement that the student starts with $XXXXX dollars in their account. That way you know they will at least not blow up immediately, and if they do make a decent percentage gain you will benefit significantly.

As a business owner I would not charge up front for an additional potential stream of passive income. I would carefully screen to make sure the student does have potential.

People who charge upfront aren't necessarily robbing the student, but they are damaging the student's ability to be successful.

[brownsfan019]

I just think it will be hard to collect once a student is successful. I mean, they could have a little small account that they pay you from and then have a completely separate 'off the books' account you'll never know about (unless this is done face-to-face).

IMO you are risking too much for the reward.

And that's why vendors charge up-front. Granted most know that what they are selling is trash, but even if it is good, how can you be sure to be paid accordingly?