There are several elements to the mental trap that people get caught in when they begin trading that sets them on the wrong course, but one particular error is the one that makes for imminent account blow out, or at least a very long and painful road in becoming a successful trader.

Luckily, even though this situation is one that is difficult to foresee and very understandable that it is made, there is a straightforward and rather simple resolution to the problem.

The core of the trading activity is definitely within the ability of most to grasp, however trading as an occupation does have a significant body of knowledge to absorb and certain skills that are required to trade profitably and consistently. 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.

As is 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 ideas in calculus may be understandable, but solving the problems will be a tremendous 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 fully competent 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 skipping 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 not consciously aware of this specific situation and its ramifications. Many people begin active trading without the foundational knowledge to trade at the level where they become active. When this occurs, this presents a sizable obstacle to adequate learning within an efficient time frame. Subsequently, the trader often winds up taking a severe financial beating, sometimes losing all their capital 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 required training or certification before a person is allowed to put themselves and their capital at real risk, so the high number that fail is simply the result of inadequate warning and preparation for what the business of trading entails.

The traders that are fortunate enough to pursue the proper teachings and help are the ones that can minimize the effects of this situation which is so commonplace 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 chances are likely for a good 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.

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 covered, and then moving forward with a focus on mastery and development.

Just this one consideration can determine your destiny as a trader, so it is well worth heeding.

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

You'll also find the book, "The Subtle Trap of Trading", which goes in-depth into this article topic, the psychology of trading and much more.