Sebastian seliga trading psychology

1. Trading
psychology: the
trader
development path
and its traps.
presentation by
Sebastian Seliga
for ShowFx Expo Bratislava 2017

2. „Becoming a great trader is
a marathon, not a sprint”
- Abe Cohen, trader and mentor

3. Psychology in trading
Market
psychology
Trading
psychology

4. Tell the difference
GAMBLING
TRADING
or
SPECULATION
INVESTING

5. Trader Development Path
First contact:
- Main motivation
- Life stage
- Personal
differences
Start of trading:
- Emotions: fear,
joy, excitement
- Stress
- Slow recognise of
trading preferences
Beginner’s luck:
- Pride
- Satisfaction
- Self-esteem up
- Positive emotions
- Risk Up
Decision to start
trading
STAGE 1: THE BEGINNING

6. 3 Stages of Becoming a Pro Trader
1. The beginning – learning to trade
- Gaining basic knowledge about the market and developing the skills
necessary to enter into a transaction
- Overconfidence after first successes
- Trading on various types of simulators and demo accounts
- Trade in small volumes on the real market
- Developing courage, discipline, consistency, patience, perseverance and
other qualities of a trader
- Consistent actions based on acquired knowledge
- Transition from the area of incompetence to conscious use of the skills
possessed
- Underestimating the probability of difficulty in succeeding in trading

7. Trader Development Path
One of the biggest obstacles you have to overcome
as a trader is to stay in the trading game long
enough for market mechanisms to be
understandable to you, and your psyche is no longer
your enemy.
LESSON FROM STAGE 1:

8. Trader Development Path
First losses:
- Feeling of a failure
- SELF defence
mechanisms
- Cognitive dissonance
Strategy change and
chaos
- Emotions: fear!
- Sometimes panic!
- SELF defence
mechanisms
Search for the right
system:
-Knowledge reconstruction
-Autoanalysis
-Self-esteem,self-evaluation
-No authority!
-Acceptance and
Experience Integration
Should I Give
Up?
Complete
Failure?
STAGE 2: BECOMING A TRADER

9. 3 Stages of Becoming a Pro Trader
2. Becoming a Trader
- Trying to match trading strategy and trading style to Trader’s personality
- Continuing to acquire practical skills, developing knowledge about market
mechanisms and proper trading approach
- Realization of some skills and activities subconsciously (intuition)
- Experiencing and dealing with the first painful loss series that test the level of
commitment, self-confidence and mental resistance of a trader

10. Trader Development Path
The next obstacle you have to overcome as a trader
is to develop your own, personal SYSTEM
(approach) to trading based on analysis (technical,
fundamental), money management and trading
psychology
LESSON FROM STAGE 2:

11. Trader Development Path
TRADING
EDGE
Analysis
Money
Management
Trading
psychology
Knowing how to make
money
• Technical Analysis
• Fundamental Analysis
• Statistical Analysis
Knowing how not to
lose money
• Decision Process
• SL,TP
• Risk/Reward Ratio
Knowing Yourself
• Discipline
• Improvement
• Control
• Stress Management

12. Trader Development Path
Deliberative trades:
-Knowledge of personal
preferences
-Self-Control
-Consequence
-Discipline
-Mistake analysis
-Strategy fitting
Trading in the zone:
-Flow
-Perseverance
-Experience
-Self-Confidence
-Stress management
-Targets invariance
-Ongoing Self-Analysis
-Humility and mistake
acknowledgment
Effective Trader:
- Winning trades bigger than
losing trades
STAGE 3: TRADING IN THE ZONE
Pro-Trader
Self-Consciousness
Expansion

13. 3 Stages of Becoming a Pro Trader
3. Effective Trader
- Having the skills necessary to create and execute your own trading strategies
that correspond to the personality of the trader, his strengths and
weaknesses, and his preferred risk level
- Realization of many subconscious skills (unconscious competence)
- Desire for continuous development in order to achieve an ever higher level of
trading
- Flexible approach and easy adaptation to changing market conditions
- Ability to transfer knowledge to other traders
- Having a lot of market experience (10 000 hours rule)
- Understanding the importance of investing psychology
- Focus on correct execution of the transaction strategy and not on the result

14. Trader Development Path
LESSON FROM STAGE 3:
The last obstacle you have to overcome as a trader
is to find a way to constantly improve your own
system while working on discipline, consistency and
own psychological development

15. Easy said than done, coach!
THE BICYCLE METAPHOR

16. THANK YOU!