Have You Made This Fatal Mistake?

Hi, Trader Brian here from Insideouttrading.com and today's video is actually going to be probably one of the more important ones for you to ever see as far as being a trader. Here's why. What I'm going to talk about today is probably the one fatal mistake that most traders make that really does send them to ruin. This is the one thing that really underlies most other problems that you run into at trading. I want to start off sharing a little story with you. When I was in college, I had a really good friend of mine, pretty sharp guy, in my calculus class. His name was Winston. And he really was. He was a sharp guy. And he got the concepts that we were learning about in calculus. Differentiation, integrals, limits, Riemann sums, Laplace transforms. He got all that kind of stuff. He got the concepts. When it came to working the problems, he just absolutely struggled. And here's why. And I had to help him a lot. It's because when he was in high school, his algebra teacher did not really present the information that, well, he wasn't taking it that seriously. So he got into calculus, and he was really weak on his algebra and his geometry and his trigonometry. He was a smart enough guy. I mean, like I said, he got the concepts that were being presented in calculus. He understood it. But when it came to working the problems, he really struggled with it. Now, the reason I share that with you is the fatal mistake that so many traders make. And don't feel bad if this sounds familiar, don't feel bad because it's not your fault. It's really a problem with the system. But, okay, here's the mistake. A lot of people get into trading, they find out what it's about. Sounds pretty straightforward. They get it, so they jump right in and they get busy. A lot of people will say, well, I can't figure it all out myself. So you may buy a can system off the Internet system somebody else created. So here you go. You jump into trading in a very short period of time. You're trying to trade at an intermediate level, and you never really had the foundational basics that you really do need to be trading at that level. Now, here's the problem with that. It's actually twofold. The first problem is, okay, you're sitting here, you're trying to work at this level, and you don't have the prerequisites for it. So that in and of itself really makes things challenging. How do you think you would be if you say, well, with math, there is a progression to the learning in math, you start off with simple counting and quantifying things and you got your addition, subtraction, multiplication, division. And from there then you can move into algebra and your geometry and trigonometry. And once you get those down path, then you can comfortably move into calculus and differential equations, Laplace transforms. There's a lot of the other higher math and there's a progression to it. Now, if you were to take some kid out of grade school, he might be just a math whiz man. He's got his addition, subtraction, multiplication and division down. But if you jump him straight to calculus, he's going to struggle. Even if he gets the concepts, he's going to struggle because he doesn't have that algebra and the trig and the geometry. Well, with traders it's kind of the same thing. If you jump very quickly to trading at an intermediate level, you're working with indicators and systems and charts that you really did not establish a good basis for. You're going to struggle. Even if you're smart, even if you've got 140 IQ, you're going to struggle because you don't have that foundational basis. That's the first part of the problem, the second part of the problem, and this is just a human phenomenon, whether you're talking about trading or other areas of study. I was reading a book many years ago when my daughter was young, just because it was important for me to make sure that she could learn properly. I wanted to study up on it myself. I already knew a lot, but I wanted to study up on it some more, having a kid. So I wound up getting this book and it was called Obstacles to Learning. It was a very enlightening book. And one of the things that they talked about in there is that there are specific obstacles to learning that when a person runs into them, they'll actually have a physiological response to it. Not just a mental one, but a physiological one. But it has other effects. And one of the obstacles that they talked about was starting too high on a learning gradient or a learning curve. And what happens is when you do that to yourself, your brain, it kind of gets overloaded and at the same time it's almost short circuiting to where, say you're dealing with, for example, money management. I know a lot of brokers and they all have stories about very well to do, very astute business people who are great with money. They've got the money management business, they've got that part of things down outside of trading. But when they get into trading because they're trying to trade at a level that's way beyond their actual skill base with trading now, the brain's misfiring, and like I said, it's almost like short circuiting the brain. So these people who are very wealthy, very smart, very sharp business people, very, very sharp money people, they get into trading and they are just making the absolute worst decisions. They're doing all sorts of stuff that they would never in their right mind do outside of trading. But in trading, they're doing it. And they keep doing it for years and years and years because they don't realize what's going on. That's why I wanted to share this with you. Like I said, don't feel bad. It's a system problem because there are no prerequisites, there is no required training for anybody to get into trading. It's pretty much you just show up with your money and you can start day one. And some people do. They won. They're in and they're out. Now, like I said, if this sounds like you, you're trading and you just find that you're struggling, and it shouldn't seem this tough, but you're just really struggling, well, here's the simple thing that you can do. First of all, you need to learn more about what it is that you're dealing with. And that's why I wrote the Southern trap of trading is because I kind of figured out what happens to people and what are the things that play into it? What are the factors that come into play that are doing this? Because traders are smarter than average. You're smarter than average. Most traders are. And trading itself really is not that challenging of a field of study. It's not. You have the aptitude for it. There are some things that have happened along the way that have really kind of messed you up. And when you can understand what's happened to you, then you can do something about it. And like I said, that's why I include. Actually, what you've been hearing is part of the book. The subtle trap of trading was this particular component of the mental trap that people get ensnared in when they get into trading. It really sets them on the wrong course. It's important to me because I want to see you do well in your trading. I just wanted to share this with you today. But I strongly suggest that you get the subtle trap of trading so that you understand what's happened and what you can do about it. The various steps you can take to really smooth things out and trade as well as you know that you're capable of, you know you can do it. I know you can do it. So share this video with your friends. If you have friends who trade and you know that they're running into some issues, you think maybe they've encountered this one. Most people do because they're not aware of it. Some of the other components that make up the trap is the main reason that people get caught up in this and they don't know what's going on. Like I said, don't feel bad. If this sounds like you don't feel bad, it's not your fault. There was nobody at the door telling you, hey, watch out for this. You need to do this, this and this. There wasn't anybody there doing that. That's why I'm here to help you. Again, share this video with your friends. Trader Brian with Inside Out Trading. Cheers.