Stock Option Trading Millionaire Concepts
Having been trading stocks and options in the capital markets expertly over the years, I have actually seen lots of ups and downs.
I have actually seen paupers become millionaires overnight …
And
I have seen millionaires end up being paupers overnight …
One story told to me by my mentor is still etched in my mind:
“As soon as, there were two Wall Street stock exchange multi-millionaires. Both were extremely successful and decided to share their insights with others by offering 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 cost savings to purchase both their opinions. His pals were naturally excited about what the two masters had to say about the stock market`s direction. When they asked their friend, he was fuming mad. Baffled, they asked their friend about his anger. He stated, `One said BULLISH and the other said BEARISH!`.”
The point of this illustration is that it was the trader who was wrong. In today`s stock and alternative market, people can have various opinions of future market instructions and still profit. The distinctions lay in the stock choosing or alternatives method and in the mental attitude and discipline one uses in implementing that method.
I share here the basic stock and alternative trading principles I follow. By holding these principles strongly in your mind, they will direct you consistently to success. These principles will help you reduce your risk and enable you to examine both what you are doing right and what you might be doing wrong.
You might have checked out ideas comparable to these before. I and others utilize them because they work. And if you memorize and reflect on these concepts, your mind can use them to direct you in your stock and options trading.
PRINCIPLE 1.
SIMPLICITY IS PROFICIENCY.
Wendy Kirkland
I picked this up from Click Here, When you feel that the stock and choices trading method that you are following is too complicated even for easy understanding, it is probably not the very best.
In all aspects of successful stock and alternatives trading, the easiest techniques typically emerge triumphant. In the heat of a trade, it is easy for our brains to become emotionally overloaded. If we have a complex method, we can not stay up to date with the action. Simpler is better.
CONCEPT 2.
NOBODY IS GOAL ENOUGH.
If you feel that you have outright control over your feelings and can be objective in the heat of a stock or choices trade, you are either a hazardous species or you are an unskilled trader.
No trader can be absolutely unbiased, specifically when market action is unusual or hugely unpredictable. Similar to the best storm can still shake the nerves of the most skilled sailors, the best stock exchange storm can still unnerve and sink a trader really rapidly. Therefore, one must strive to automate as lots of vital elements of your method as possible, specifically your profit-taking and stop-loss points.
CONCEPT 3.
HANG ON TO YOUR GAINS AND CUT YOUR LOSSES.
This is the most crucial concept.
A lot of stock and alternatives traders do the opposite …
They hold on to their losses way too long and enjoy their equity sink and sink and sink, or they get out of their gains prematurely just to see the cost increase and up and up. Gradually, their gains never ever cover their losses.
This principle takes some time to master appropriately. Contemplate this concept and review your past stock and alternatives trades. If you have been undisciplined, you will see its reality.
CONCEPT 4.
BE AFRAID TO LOSE MONEY.
Are you like many novices who can`t wait to leap right into the stock and options market with your cash wishing to trade as soon as possible?
On this point, I have actually found that a lot of unprincipled traders are more scared of losing out on “the next huge trade” than they hesitate of losing money! The secret here is ADHERE TO YOUR STRATEGY! Take stock and options trades when your technique signals to do so and prevent taking trades when the conditions are not satisfied. Exit trades when your technique states to do so and leave them alone when the exit conditions are not in place.
The point here is to be afraid to throw away your cash because you traded unnecessarily and without following your stock and alternatives technique.
PRINCIPLE 5.
YOUR NEXT TRADE COULD BE A LOSING TRADE.
Do you definitely believe that your next stock or alternatives trade is going to be such a huge winner that you break your own money management rules and put in everything you have? Do you remember what usually takes place after that? It isn`t quite, is it?
No matter how positive you might be when getting in a trade, the stock and alternatives market has a way of doing the unexpected. Therefore, always stick to your portfolio management system. Do not compound your awaited wins since you may end up compounding your extremely genuine losses.
PRINCIPLE 6.
EVALUATE YOUR EMOTIONAL CAPABILITY PRIOR TO INCREASING CAPITAL OUTLAY.
You understand by now how various paper trading and genuine stock and choices trading is, don`t you?
In the very same way, after you get utilized to trading genuine cash regularly, you find it incredibly various when you increase your capital by ten fold, don`t you?
What, then, is the difference? The difference is in the emotional concern that comes with the possibility of losing a growing number of genuine cash. This happens when you cross from paper trading to genuine trading and likewise when you increase your capital after some successes.
After a while, most traders understand their optimal capability in both dollars and feeling. Are you comfortable trading up to a few thousand or 10s of thousands or hundreds of thousands? Know your capacity before dedicating the funds.
PRINCIPLE 7.
YOU ARE An AMATEUR AT EVERY TRADE.
Ever seemed like an expert after a couple of wins and after that lose a lot on the next stock or alternatives trade?
Overconfidence and the false sense of invincibility based on past wins is a recipe for disaster. All professionals respect their next trade and go through all the proper steps of their stock or choices technique prior to entry. Deal with every trade as the very first trade you have ever made in your life. Never ever deviate from your stock or options strategy. Never ever.
CONCEPT 8.
YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.
Ever followed an effective stock or choices method only to fail terribly?
You are the one who figures out whether a technique succeeds or fails. Your personality and your discipline make or break the strategy that you use not vice versa. Like Robert Kiyosaki says, “The financier is the possession or the liability, not the financial investment.”
Understanding yourself first will cause ultimate success.
PRINCIPLE 9.
CONSISTENCY.
Have you ever altered your mind about how to implement a strategy? When you make changes day after day, you end up catching nothing but the wind.
Stock market fluctuations have more variables than can be mathematically developed. By following a proven method, we are ensured that somebody effective has actually stacked the chances in our favour. When you review both winning and losing trades, identify whether the entry, management, and exit satisfied every criteria in the technique and whether you have followed it exactly prior to changing anything.
In conclusion …
I hope these easy standards that have actually led my ship out of the harshest of seas and into the very best harvests of my life will assist you too. All the best.
