Stock Option Trading Millionaire Concepts
Stock Option Trading Millionaire Concepts
Having been trading stocks and options in the capital markets expertly for many years,I have seen numerous ups and downs. I have seen paupers end up being millionaires overnight … And I have seen millionaires end up being paupers overnight … One story told to me by my coach is still engraved in my mind: ” As soon as,there were 2 Wall Street stock exchange multi-millionaires. Both were exceptionally effective and chose to share their insights with others by selling their stock exchange projections in newsletters. Each charged US$ 10,000 for their opinions. One trader was so curious to know their views that he invested all of his $20,000 savings to purchase both their opinions. His pals were naturally excited about what the two masters had to say about the stock exchange’s instructions. When they asked their good friend,he was fuming mad. Baffled,they asked their good friend about his anger. He stated,’One stated BULLISH and the other stated BEARISH!'”. The point of this illustration is that it was the trader who was wrong. stockcharts.com,and In today’s stock and alternative market,individuals can have various opinions of future market instructions and still profit. The differences lay in the stock selecting or options strategy and in the mental attitude and discipline one uses in executing that strategy. I share here the basic stock and alternative trading concepts I follow. By holding these concepts securely in your mind,they will guide you consistently to profitability. These concepts will help you decrease your risk and enable you to assess both what you are doing right and what you may be doing wrong. You may have read ideas similar to these before. I and others utilize them because they work. And if you remember and review these concepts,your mind can utilize them to guide you in your stock and options trading. CONCEPT 1. SIMPLENESS IS PROFICIENCY. Wendy Kirkland I learned this from},When you feel that the stock and options trading approach that you are following is too complex even for basic understanding,it is probably not the best. In all aspects of effective stock and options trading,the easiest methods often emerge triumphant. In the heat of a trade,it is simple for our brains to end up being mentally strained. If we have a complex strategy,we can not keep up with the action. Easier is better. CONCEPT 2. NO ONE IS GOAL ENOUGH. If you feel that you have outright control over your feelings and can be unbiased in the heat of a stock or options trade,you are either a hazardous species or you are an inexperienced trader. No trader can be absolutely unbiased,particularly when market action is unusual or wildly irregular. Much like the best storm can still shake the nerves of the most experienced sailors,the best stock exchange storm can still unnerve and sink a trader really quickly. Therefore,one must venture to automate as numerous critical aspects of your strategy as possible,particularly your profit-taking and stop-loss points. CONCEPT 3. HANG ON TO YOUR GAINS AND CUT YOUR LOSSES. This is the most crucial principle. Many stock and options traders do the opposite … They hang on to their losses way too long and watch their equity sink and sink and sink,or they leave their gains prematurely only to see the price go up and up and up. In time,their gains never cover their losses. This principle takes time to master properly. Contemplate this principle and evaluate your past stock and options trades. If you have been unrestrained,you will see its truth. CONCEPT 4. HESITATE TO LOSE MONEY. Are you like most beginners who can’t wait to jump right into the stock and options market with your money intending to trade as soon as possible? On this point,I have found that most unprincipled traders are more afraid of missing out on “the next big trade” than they are afraid of losing money! The key here is ADHERE TO YOUR METHOD! Take stock and options trades when your strategy signals to do so and avoid taking trades when the conditions are not fulfilled. Exit trades when your strategy states to do so and leave them alone when the exit conditions are not in place. The point here is to be afraid to discard your money because you traded unnecessarily and without following your stock and options strategy. CONCEPT 5. YOUR NEXT TRADE COULD BE A LOSING TRADE. Do you absolutely believe that your next stock or options trade is going to be such a huge winner that you break your own finance guidelines and put in whatever you have? Do you remember what generally takes place after that? It isn’t quite,is it? No matter how confident you may be when going into a trade,the stock and options market has a way of doing the unexpected. Therefore,always stick to your portfolio management system. Do not intensify your anticipated wins because you may end up intensifying your really real losses. CONCEPT 6. DETERMINE YOUR EMOTIONAL CAPACITY PRIOR TO INCREASING CAPITAL OUTLAY. You know by now how various paper trading and real stock and options trading is,do not you? In the very same method,after you get used to trading real money consistently,you discover it exceptionally various when you increase your capital by 10 fold,do not you? What,then,is the difference? The difference remains in the psychological concern that comes with the possibility of losing increasingly more real money. This takes place when you cross from paper trading to real trading and likewise when you increase your capital after some successes. After a while,most traders realize their optimal capability in both dollars and emotion. Are you comfortable trading up to a couple of thousand or 10s of thousands or hundreds of thousands? Know your capability before committing the funds. CONCEPT 7. YOU ARE An AMATEUR AT EVERY TRADE. Ever felt like a professional after a couple of wins and after that lose a lot on the next stock or options trade? Overconfidence and the incorrect sense of invincibility based upon past wins is a recipe for catastrophe. All specialists appreciate their next trade and go through all the proper steps of their stock or options strategy before entry. Deal with every trade as the very first trade you have ever made in your life. Never differ your stock or options strategy. Never. CONCEPT 8. YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE. Ever followed an effective stock or options strategy only to stop working terribly? You are the one who figures out whether a strategy succeeds or fails. Your character and your discipline make or break the strategy that you utilize not vice versa. Like Robert Kiyosaki states,”The financier is the property or the liability,not the financial investment.”. Comprehending yourself first will result in eventual success. CONCEPT 9. CONSISTENCY. Have you ever changed your mind about how to implement a strategy? When you make changes day after day,you end up capturing nothing but the wind. Stock exchange variations have more variables than can be mathematically formulated. By following a tested strategy,we are ensured that somebody effective has stacked the odds in our favour. When you evaluate both winning and losing trades,determine whether the entry,management,and exit fulfilled every criteria in the strategy and whether you have followed it exactly before altering anything. In conclusion … I hope these basic standards that have led my ship of the harshest of seas and into the best harvests of my life will guide you too. Good Luck.
