Question
How can I be a successful options trader?
Answer
Those who are successful in options trading have a system that they follow. This helps them make decisions and while each person has a different system, each one is carefully designed around steps that they have refined and perfected over time. If you are going to be truly good at option trading, you’ll need to develop a trading system, as well.
Step One
Take a look at your history in trading. Where have you succeeded and where have you failed? What did you do right on the wins? And what did you do wrong with the bad trades? You should begin to see a pattern after a while. It’s a good idea to keep a trade log for this reason. It may take some time, but eventually you will understand where your strong points are and where you could stand to improve.
Step Two
Figure out your trading style. Are you a risk taker or do you prefer to play it as safe as possible in option trading? It pays to be analytical at this stage, since it will help you refine your techniques later.
Step Three
Learn what you’re missing. If you have a tendency to miss out on specific opportunities, learn what you need to catch them in time. You can develop the tools you need to be successful in option trading. Everyone is quite different in what they need to brush up on, so this is where you’ll need to put your self-analysis from steps one and two to work.
Step Four
Put it into practice. The only way to really make sure that your strategy works is to use it and refine it. It can take years to perfect your trading system, so be patient and keep a log. This will help you make improvements where needed.
Options trading takes time and practice to perfect. Having a trading strategy is the best way to ensure success. While you can certainly use the same strategy as someone else, it rarely works unless you understand all the reasons behind it and exactly how it works. Instead, devise your own option trading system and you’ll be far better off.
