House of Trading experts in economics, financial analysis and Forex trading delivered a seminar in London on the psychology of trading, including mindset, method and strategies. Please enjoy the presentation from session one at the ActivTrades Trading Psychology event and get in touch with one of the team if you'd like to find out more about how the House of Trading can teach you to trade, make you profitable and set you on a path to a City account in months. www.thehouseoftrading.com

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Basic Trading Psychology
Understanding the Foundations of Success

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All financial products traded on margin carry a high degree of risk to your capital. They are not suited to all investors,
please ensure that you fully understand the risks involved, and seek independent advice if necessary.
The thoughts and opinions expressed here are solely those of the speaker and do not necessarily reflect the view of
ActivTrades Plc
This presentation is for information purposes only and should not be considered as an advice or an invitation to trade. The
decision to act on any ideas and suggestions presented in this webinar is at the sole discretion of viewer.
Any forecasts are not a reliable indicator of future performance. Application of the techniques, ideas presented is done at
the viewer’s sole discretion and risk
ActivTrades PLC is authorized and regulated by the Financial Conduct Authority, FCA registration number 434413.
ActivTrades PLC a company registered at N1702A, N1702F, Level 17 Emirates Financial Towers, DIFC, Dubai United Arab
Emirates. ActivTrades PLC is regulated by the Dubai Financial Services Authority under Firm’s reference No. F003511.
Disclaimer

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1. Fundamental Analysis
2. Technical Analysis
3. Psychological Analysis
The 3 Pillars of Modern Trading

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1. Fundamental Analysis Skills
2. Technical Analysis Skills
3. Psychological Analysis Skills
i. Discipline
ii. Focus
iii. Confidence
4. Money Management & Regulating Risk Skills
i. Maintaining Trading Capital

5. Click to edit Master title style 1. EVENT
Visual/Auditory/Kinaesthetic/AD data
received
2. INTERNAL REPRESENTATION
Filter and Store the Data. Distort and
Generalise according to our Beliefs and
opinions
3. STATE
Reflects Physiology
4. PHYSIOLOGY
Physiology reflects State
5. DECISION
Affected by State
6. ACTION
Take Action due to Decision!
7. RESULT
Dependant on Action Taken
Source: Andrew Groom

6. Click to edit Master title styleThe mindset of a trader
New traders generally believe they will be a good trader by simply
learning and applying the techniques of how to trade! Good traders
would have learned how to BE when trading.
There are always personal changes involved in becoming a good trader
which will take time to reconcile within yourself

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When you are learning to trade you are learning
to trade your own fears, hopes and biases.
Relatively speaking, figuring out the mathematics,
economics and techniques is the easy part. Successful
Traders are Different because they Think Differently!
Be honest with what’s happening in your yourself and that
means being honest about yourself, who you are.
A high level of introspection (self-analysis), is the common
denominator of successful traders.
The mindset of a
trader

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Understanding & Managing
Your Mind-set

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Hussain
Qualification Degree or Above
Class Upper Middle
Career Sales Trader
Age 35
Gender Male

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Technical
Issues
1. Not trading with the trend
2. Struggles to adapt to new market
conditions
3. Trading without multiple timeframe
confirmation
4. Existing poor trading habits
5. Takes to many trades per day

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Psychological
Issues
1. Trading centered on his opinion of
price movement
2. Trades what he thinks not what he
sees
3. Struggles with his emotions – overly
tied to his trade by trade performance
4. Sufferers from a gambling mentality

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The
Solution
• One month of single strategy trading for
each strategy
• Removing the 15 minute timeframe from his
charts except when placing an order
• Re working his trading plan to concentrate
on MTF trend confirmation
• Retraining and refinement of his analytical
processes to remove temptations to trade
non- standard trading opportunity's
• Techniques to ensure patience to wait for
MTF confirmation
• Use of viable risk reward ratios

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Samantha
Qualification Degree
Class Middle
Career Executive
Age 31
Gender Female

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Technical
Issues
1. Strangling her trades with tight stop-
losses
2. Pulling viable trades before her Profit
targets
3. Poor risk reward ratios
4. Entering viable trades too late to make
practicable profits
5. Not sticking to her trade management
process

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Psychological
Issues
1. Allowing her nerves to get the better
of her trade management process
2. Loosing confidence in viable trades
3. Psychological barrier to breaking
previous highs on her P/L
4. Tired, Stressed Nervous
5. Overworked

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The
Solution
• Tailored trade management rules
• Realistic risk reward ratios
• Return to primary strategies and analysis
techniques
• Refinement of MTF analysis
• Use of two level stops
• Coaching on entry's and trade management

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Mike
Qualification Skilled worker
Class Lower Middle
Career Master Carpenter
Age 37
Gender Male

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Technical
Issues
1. Placing to many trades per day
2. Entering trades before setup
confirmation
3. Consistently poor entry's
4. Not using Multi Timeframe
confirmations
5. Taking Trades outside his strategies
6. Over reliant on the 15miniute
timeframe

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Psychological
Issues
1. Couldn’t separate himself from
underperforming strategy's
2. Suffered from significant impatience –
wanted to make his money before
breakfast
3. Highly sensitive to both winning and
loosing trades

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The
Solution
• One month of single strategy trading for
each strategy
• Removing the 15 minute timeframe from
his charts except when placing an order
• Having daily learning objectives to fill his
time between trades
• Limited to two/three trades a day

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The Trading Plan
The importance of a trading plan for both the good times and the bad

22. Click to edit Master title styleSpecialise – pick your pairs
Secondary
Primary
Tertiary
Expert
1.EURUSD
EURGBP
GBPUSD
USDJPY
EURJPY
AUDUSD
GBPJPY
DJIA
FTSE
EURAUD
USDCAD
CADJPY
DAX
GOLD
Crude Oil
AUDCAD
AUDJPY
EURCAD
GBPAUD
GBPCAD
NZDUSD

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Always make your own
decisions even trading
opportunities spotted
by others.
Wait, be patient but be ready to take
action. When an opportunity is presented
it is your duty to process your analysis and
take or not take the trade.
Be methodical,
systematic in
instrument analysis
Keep it simple –
minimal strategies
and instruments

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Stick to your plan!