Stock Options Trading Millionaire Concepts
Having been trading stocks and choices in the capital markets professionally throughout the years, I have seen numerous ups and downs.
I have seen paupers become millionaires overnight …
And
I have seen millionaires end up being paupers overnight …
One story informed to me by my mentor is still etched in my mind:
"When, there were 2 Wall Street stock exchange multi-millionaires. Both were extremely successful and decided to share their insights with others by offering their stock market projections in newsletters. Each charged US$ 10,000 for their viewpoints. One trader was so curious to know their views that he spent all of his $20,000 cost savings to buy both their opinions. His good friends were naturally thrilled about what the two masters needed to state about the stock market`s direction. When they asked their friend, he was fuming mad. Confused, they asked their friend about his anger. He said, `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 option market, people can have various viewpoints of future market direction and still profit. The distinctions lay in the stock choosing or options strategy and in the mental attitude and discipline one utilizes 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 consistently to profitability. 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 read ideas similar to these before. I and others use them since they work. And if you remember and assess these principles, your mind can utilize them to direct you in your stock and choices trading.
PRINCIPLE 1.
SIMPLENESS IS PROFICIENCY.
Wendy Kirkland
I picked this up from https://www.yahoo.com/video/financial-guru-wendy-kirkland-reveals-071000479.html, When you feel that the stock and options trading approach that you are following is too complex even for basic understanding, it is most likely not the best.
In all aspects of successful stock and alternatives trading, the most basic methods often emerge victorious. In the heat of a trade, it is easy for our brains to become mentally overwhelmed. If we have a complex technique, 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 alternatives trade, you are either a dangerous types or you are an inexperienced trader.
No trader can be absolutely unbiased, specifically when market action is uncommon or wildly erratic. Much like the perfect storm can still shake the nerves of the most experienced sailors, the best stock market storm can still unnerve and sink a trader extremely rapidly. For that reason, one should venture to automate as lots of vital elements of your strategy 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 principle.
The majority of stock and options traders do the opposite …
They hold on to their losses way too long and view their equity sink and sink and sink, or they leave their gains too soon just to see the cost increase and up and up. Over time, their gains never cover their losses.
This concept requires time to master correctly. Reflect upon this principle and evaluate your previous stock and options trades. If you have been unrestrained, you will see its reality.
CONCEPT 4.
BE AFRAID TO LOSE MONEY.
Are you like many newbies who can`t wait to leap right into the stock and choices market with your cash hoping to trade as soon as possible?
On this point, I have actually found that the majority of unprincipled traders are more afraid of missing out on "the next huge trade" than they hesitate of losing money! The secret here is STICK TO YOUR STRATEGY! Take stock and alternatives trades when your strategy signals to do so and avoid taking trades when the conditions are not fulfilled. Exit trades when your strategy says 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 due to the fact that you traded unnecessarily 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 options trade is going to be such a huge winner that you break your own money management rules and put in whatever you have? Do you remember what generally takes place after that? It isn`t pretty, is it?
No matter how confident you may be when getting in a trade, the stock and choices market has a way of doing the unexpected. For that reason, always stick to your portfolio management system. Do not intensify your anticipated wins due to the fact that you may end up compounding your very genuine losses.
CONCEPT 6.
EVALUATE YOUR EMOTIONAL CAPABILITY BEFORE INCREASING CAPITAL OUTLAY.
You know by now how different paper trading and real stock and options trading is, don`t you?
In the very same way, after you get used to trading real cash consistently, you discover it very various when you increase your capital by ten fold, don`t you?
What, then, is the distinction? The difference is in the psychological burden that features the possibility of losing more and more real cash. This happens when you cross from paper trading to real trading and likewise when you increase your capital after some successes.
After a while, most traders understand their maximum capacity in both dollars and feeling. Are you comfortable trading as much as a couple of thousand or 10s of thousands or hundreds of thousands? Know your capability prior to committing the funds.
CONCEPT 7.
YOU ARE A NEWBIE AT EVERY TRADE.
Ever seemed like a specialist after a couple of wins and then lose a lot on the next stock or options trade?
Overconfidence and the false sense of invincibility based upon past wins is a recipe for disaster. All professionals appreciate their next trade and go through all the correct actions of their stock or alternatives 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.
PRINCIPLE 8.
YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.
Ever followed an effective stock or options technique only to stop working severely?
You are the one who determines whether a method is successful or stops working. Your character and your discipline make or break the technique that you use not vice versa. Like Robert Kiyosaki says, "The investor is the possession or the liability, not the investment."
Understanding yourself initially will cause ultimate success.
CONCEPT 9.
CONSISTENCY.
Have you ever changed your mind about how to carry out a strategy? When you make changes day after day, you end up catching nothing but the wind.
Stock exchange variations have more variables than can be mathematically developed. By following a proven method, we are guaranteed that someone successful has actually stacked the odds in our favour. When you examine both winning and losing trades, determine whether the entry, management, and exit fulfilled every requirements in the method and whether you have followed it specifically before altering anything.
In conclusion …
I hope these basic guidelines that have led my ship out of the harshest of seas and into the best harvests of my life will direct you too. Good Luck.