Stock Option Trading Millionaire ConceptsStock Option Trading Millionaire Concepts
Having been trading stocks and choices in the capital markets professionally throughout the years, I have seen many ups and downs.
I have actually seen paupers end up being millionaires over night …
And
I have seen millionaires become paupers overnight …
One story told to me by my mentor is still engraved in my mind:
“Once, there were 2 Wall Street stock market multi-millionaires. Both were exceptionally effective and decided to share their insights with others by offering their stock exchange forecasts in newsletters. Each charged US$ 10,000 for their opinions. One trader was so curious to understand their views that he invested all of his $20,000 cost savings to purchase both their viewpoints. His good friends were naturally excited about what the two masters had to say about the stock exchange`s instructions. When they asked their pal, he was fuming mad. Baffled, they asked their good friend about his anger. He said, `One said BULLISH and the other stated BEARISH!`.”
The point of this illustration is that it was the trader who was wrong. In today`s stock and choice market, people can have various opinions of future market instructions and still profit. The differences lay in the stock picking or alternatives strategy and in the mental attitude and discipline one uses in implementing that method.
I share here the fundamental stock and choice trading principles I follow. By holding these concepts securely in your mind, they will assist you regularly to success. These principles will help you decrease your threat and permit you to examine both what you are doing right and what you may be doing wrong.
You may have checked out concepts similar to these prior to. I and others use them due to the fact that they work. And if you memorize and review these concepts, your mind can utilize them to direct you in your stock and alternatives trading.
PRINCIPLE 1.
SIMPLENESS IS PROFICIENCY.
Wendy Kirkland
I picked this up from -, When you feel that the stock and choices trading approach that you are following is too intricate even for simple understanding, it is probably not the very best.
In all elements of successful stock and options trading, the simplest approaches frequently emerge triumphant. In the heat of a trade, it is simple for our brains to end up being emotionally overwhelmed. If we have a complex technique, we can not keep up with the action. Simpler is much 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 dangerous types or you are an inexperienced trader.
No trader can be definitely objective, particularly when market action is unusual or hugely irregular. Similar to the perfect storm can still shake the nerves of the most experienced sailors, the ideal stock exchange storm can still unnerve and sink a trader very quickly. Therefore, one must strive to automate as many important elements of your method as possible, specifically your profit-taking and stop-loss points.
PRINCIPLE 3.
HANG ON TO YOUR GAINS AND CUT YOUR LOSSES.
This is the most important concept.
The majority of stock and alternatives traders do the opposite …
They hang on to their losses way too long and enjoy their equity sink and sink and sink, or they leave their gains prematurely only to see the price go up and up and up. Over time, their gains never ever cover their losses.
This concept takes some time to master appropriately. Reflect upon this principle and review your past stock and options trades. If you have been unrestrained, you will see its reality.
CONCEPT 4.
BE AFRAID TO LOSE CASH.
Are you like the majority of novices who can`t wait to jump right into the stock and alternatives market with your cash hoping to trade as soon as possible?
On this point, I have found that the majority of unprincipled traders are more scared of missing out on “the next big trade” than they hesitate of losing cash! The secret here is STAY WITH YOUR TECHNIQUE! Take stock and alternatives trades when your strategy 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 discard your money because you traded needlessly and without following your stock and choices method.
PRINCIPLE 5.
YOUR NEXT TRADE COULD BE A LOSING TRADE.
Do you absolutely believe that your next stock or alternatives trade is going to be such a big winner that you break your own money management rules and put in whatever you have? Do you remember what typically occurs after that? It isn`t quite, is it?
No matter how confident you may be when entering a trade, the stock and alternatives market has a method of doing the unanticipated. Therefore, constantly stay with your portfolio management system. Do not intensify your anticipated wins because you may end up compounding your really genuine losses.
PRINCIPLE 6.
EVALUATE YOUR EMOTIONAL CAPABILITY BEFORE INCREASING CAPITAL OUTLAY.
You understand by now how different paper trading and real stock and alternatives trading is, do not you?
In the very same method, after you get utilized to trading real money consistently, you discover it incredibly various when you increase your capital by 10 fold, do not you?
What, then, is the difference? The distinction remains in the psychological burden that comes with the possibility of losing increasingly more genuine cash. 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, many traders understand their maximum capability in both dollars and feeling. Are you comfortable trading approximately a few thousand or tens of thousands or numerous thousands? Know your capability before committing the funds.
PRINCIPLE 7.
YOU ARE An AMATEUR AT EVERY TRADE.
Ever felt like a professional after a few wins and after that lose a lot on the next stock or choices trade?
Overconfidence and the false sense of invincibility based on past wins is a recipe for disaster. All experts respect their next trade and go through all the proper steps of their stock or options technique before entry. Deal with every trade as the very first trade you have ever made in your life. Never differ your stock or choices strategy. Never ever.
CONCEPT 8.
YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.
Ever followed a successful stock or options method only to stop working severely?
You are the one who figures out whether a technique succeeds or fails. Your character and your discipline make or break the technique that you utilize not vice versa. Like Robert Kiyosaki states, “The financier is the asset or the liability, not the financial investment.”
Comprehending yourself initially will cause eventual success.
PRINCIPLE 9.
CONSISTENCY.
Have you ever altered your mind about how to implement a method? When you make changes day after day, you wind up catching nothing but the wind.
Stock exchange variations have more variables than can be mathematically developed. By following a proven strategy, we are guaranteed that somebody effective has stacked the odds in our favour. When you review both winning and losing trades, determine whether the entry, management, and exit satisfied every criteria in the method and whether you have actually followed it exactly before altering anything.
In conclusion
I hope these simple standards that have led my ship of the harshest of seas and into the best harvests of my life will guide you too. All the best.