Most people don't realize the huge mistake they make when starting out in their trading career. There are several components to the mental trap that traders get caught in when they begin trading that sets them on the wrong course, but one particular mistake is the one that makes for imminent account blow out, or at least a rather lengthy and loss-filled road in becoming a successful trader.
Fortunately, even though this situation is one that is difficult to foresee and very understandable that it is made, there is a direct and rather simple solution to the issue.
The essence of trading is certainly 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 with consistency. Coupled with the fact that most traders are of smarter than average,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 gradient to trading.
Here is an analogy to illustrate the problem. Let's take mathematics.
You start with the concept of numbers in general, quantifying items. Next come 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 concepts in calculus may be understandable, but solving the problems will be a tremendous challenge, if not near impossible to solve. If a person were to try to go directly from basic mathematics to calculus, it would be a very long struggle indeed to become fully competent at the higher level.
It has been documented in 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 error that many traders make, and they are generally consciously unaware of this specific situation and its impact. Many people begin active trading without the foundational knowledge to trade at the level where they become active. When this occurs, it presents a sizable 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 proper skill and knowledge base to trade proficiently.
This is not the fault of the individuals. This is a systemic problem which unfortunately most have to endure. There is no mandatory training or certification before a person is allowed to put themselves and their money at real risk, so the high number that fail is largely the result of a lack of warning and preparation for what the business of trading involves.
The traders that are fortunate enough to seek out the proper guidance and help are the ones that can minimize the effects of this phenomenon which is so commonplace in the trading world. If a person can find a mentor that is aware of this particular obstacle and the others that are present in the development of a trader, then chances are likely for a good trading experience. Most however choose to do it themselves or simply make it on sheer determination alone, while receiving the lessons of trading the hard way - through personal experience and numerous losses.
Instead of falling 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 making sure that you've got the basics fully established, and then proceeding forward with a focus on mastery and development.
Are your stock trading profits less than you'd like for them to be? Don't want to wait years to develop into that professional level trader that you know you can be?
Take your stock market trading to the professional level faster than you can imagine by getting the RIGHT training.
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