Debt Consolidation

There are several components to the mental trap that people get caught in when they begin trading that sets them on the wrong course, but one particular mistake is the one that virtually guarantees failure, or at least a rather lengthy and loss-filled road in becoming a successful trader.

Fortunately, although this situation is one that is difficult to foresee and very understandable that it happens, there is a direct and rather simple resolution to the issue.

The essence of the trading activity is definitely within the ability of most to grasp, however trading as an occupation does have a substantial body of knowledge to absorb and specific skills that are required to trade profitably and consistently. In addition to the fact that most traders are of above average intelligence,this makes for a situation where the success rate should be much higher than it is.

Like with most professions with a significant body of knowledge, there is a progression to trading.

Here is an analogy to illustrate the problem. Let’s take mathematics.

Mathematics begins with the concept of numbers in general, quantifying items. Then one moves to addition, subtraction, multiplication and division. After that, one moves on to algebra, geometry, and trigonometry. Once that base is developed, then one can comfortably move on to calculus, La Place Transforms, differential equations and other higher math.

If however, a person does not fully establish the prerequisites for calculus, such as algebra or trigonometry, the ideas in calculus may be understandable, but working the problems will be a considerable challenge, if not near impossible to solve. If one were to try to go directly from basic mathematics to differential equations, it would make for a very long struggle indeed to become proficient at the higher level.

There are in fact documented studies on the obstacles to learning that have found that there are specific physiological reactions when a person encounters this particular phenomenon - that of starting too high up in a learning gradient or missing foundational knowledge while trying to grasp concepts at a given level.

This is the fundamental mistake that many traders fall prey to, and they are generally consciously unaware of this particular situation and its impact. Many people begin active trading without the foundational knowledge to trade at the level where they become active. When this happens, it creates a considerable obstacle to adequate learning within an efficient time frame. As a result, the trader often winds up suffering severe losses, sometimes blowing out their entire account before they have established a sufficient skill and knowledge base to trade proficiently.

The individuals are not to blame. This is a systemic problem which unfortunately most have to suffer through. There is no required training or certification before a person is allowed to put themselves and their capital at real risk, so the high percentage that fail is largely the result of inadequate warning and preparation for what the business of trading involves.

The traders that are fortunate enough to pursue the proper teachings and assistance are the ones that can minimize the effects of this phenomenon which is so prevalent in the trading world. If a person can find a mentor that recognizes this particular obstacle and the others that are present in the development of a trader, then odds are greatly improved for a positive trading experience. Most however choose to do it themselves or simply make it on sheer determination alone, while learning the lessons of trading the hard way - through personal experience and substantial losses.

Rather than fall prey to this mistake as many do, you have the option to save yourself significant time, losses and personal anguish. This begins with backing up so to speak and ensuring that you have the basics fully covered, and then proceeding forward with a focus on mastery and development.

Just this one consideration can set your destiny as a trader, so it is well worth acting on.

This article covers only one of the components of “The Subtle Trap of Trading”. To find out the rest of the story and pick up a free copy of the powerful report, ‘The Seven Traits of Winning Traders’, go to http://insideouttrading.com.

For more resources & insights into trader development, go to InsideOutTrading.com

To download your free copy of the powerful report ‘The Seven Traits of Winning Traders’, go to http://www.insideouttrading.com

- Brian McAboy

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