Stock Option Trading Millionaire Concepts
Having been trading stocks and choices in the capital markets expertly over the years, I have actually seen lots of ups and downs.
I have actually seen paupers end up being millionaires over night …
And
I have seen millionaires become paupers overnight …
One story informed to me by my coach is still etched in my mind:
"Once, there were 2 Wall Street stock market 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 opinions. One trader was so curious to know their views that he spent all of his $20,000 cost savings to purchase both their viewpoints. His good friends were naturally delighted about what the two masters needed to say about the stock exchange`s instructions. When they asked their friend, he was fuming mad. Confused, they asked their buddy about his anger. He stated, `One stated 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 different opinions of future market instructions and still earnings. The differences lay in the stock choosing or options strategy and in the mental attitude and discipline one utilizes in executing that method.
I share here the standard stock and alternative trading principles I follow. By holding these concepts firmly in your mind, they will assist you consistently to success. These concepts will help you decrease your threat and allow you to evaluate both what you are doing right and what you might be doing wrong.
You might have checked out concepts comparable to these before. I and others use them because they work. And if you remember and assess these concepts, your mind can utilize them to direct you in your stock and choices trading.
CONCEPT 1.
SIMPLENESS IS MASTERY.
Wendy Kirkland
I learned this from Click Here, When you feel that the stock and choices trading technique that you are following is too complex even for easy understanding, it is most likely not the best.
In all aspects of effective stock and choices trading, the most basic techniques frequently emerge victorious. In the heat of a trade, it is simple for our brains to become mentally overloaded. If we have a complex method, we can not keep up with the action. Easier is better.
CONCEPT 2.
NO ONE IS OBJECTIVE ENOUGH.
If you feel that you have absolute control over your feelings and can be objective in the heat of a stock or options trade, you are either a dangerous species or you are an unskilled trader.
No trader can be absolutely objective, especially when market action is unusual or wildly irregular. Similar to the ideal storm can still shake the nerves of the most skilled sailors, the best stock market storm can still unnerve and sink a trader extremely rapidly. For that reason, one need to venture to automate as many important elements of your method as possible, especially your profit-taking and stop-loss points.
CONCEPT 3.
HANG ON TO YOUR GAINS AND CUT YOUR LOSSES.
This is the most crucial principle.
The majority of stock and options traders do the opposite …
They hang on to their losses way too long and see their equity sink and sink and sink, or they get out of their gains too soon only to see the rate increase and up and up. Over time, their gains never cover their losses.
This principle takes time to master properly. Reflect upon this principle and evaluate your previous stock and options trades. If you have been undisciplined, you will see its truth.
PRINCIPLE 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 money wanting to trade as soon as possible?
On this point, I have discovered that most unprincipled traders are more afraid of losing out on "the next big trade" than they are afraid of losing cash! The secret here is STAY WITH YOUR METHOD! Take stock and options trades when your strategy signals to do so and avoid taking trades when the conditions are not satisfied. Exit trades when your technique 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 cash because you traded unnecessarily and without following your stock and options method.
PRINCIPLE 5.
YOUR NEXT TRADE COULD BE A LOSING TRADE.
Do you definitely believe that your next stock or choices 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 occurs after that? It isn`t pretty, is it?
No matter how positive you might be when going into a trade, the stock and choices market has a way of doing the unanticipated. Therefore, constantly adhere to your portfolio management system. Do not compound your anticipated wins since you might end up compounding your extremely genuine losses.
CONCEPT 6.
GAUGE YOUR EMOTIONAL CAPABILITY PRIOR TO INCREASING CAPITAL OUTLAY.
You understand by now how various paper trading and real stock and choices trading is, don`t you?
In the very same method, after you get used to trading genuine money consistently, you find it incredibly different when you increase your capital by ten fold, don`t you?
What, then, is the distinction? The difference remains in the psychological burden that includes the possibility of losing more and more real cash. This takes place when you cross from paper trading to genuine trading and likewise when you increase your capital after some successes.
After a while, the majority of traders realize their maximum capability in both dollars and emotion. Are you comfortable trading up to a few thousand or tens of thousands or numerous thousands? Know your capability before committing the funds.
CONCEPT 7.
YOU ARE An AMATEUR AT EVERY TRADE.
Ever seemed like an expert after a few wins and after that lose a lot on the next stock or alternatives trade?
Overconfidence and the incorrect sense of invincibility based on past wins is a recipe for catastrophe. All professionals appreciate their next trade and go through all the proper steps of their stock or alternatives method before entry. Deal with every trade as the very first trade you have actually ever made in your life. Never differ your stock or choices method. Never.
CONCEPT 8.
YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.
Ever followed an effective stock or options technique only to stop working terribly?
You are the one who figures out whether a technique prospers or stops working. Your character and your discipline make or break the strategy that you use not vice versa. Like Robert Kiyosaki states, "The investor is the asset or the liability, not the investment."
Understanding yourself first will lead to eventual success.
PRINCIPLE 9.
CONSISTENCY.
Have you ever altered your mind about how to execute a strategy? When you make changes day after day, you wind up capturing nothing but the wind.
Stock exchange fluctuations have more variables than can be mathematically developed. By following a proven strategy, we are guaranteed that somebody effective has actually stacked the chances in our favour. When you examine both winning and losing trades, identify whether the entry, management, and exit satisfied every criteria in the strategy and whether you have actually followed it exactly before altering anything.
In conclusion …
I hope these simple guidelines that have led my ship of the harshest of seas and into the very best harvests of my life will guide you too. Good Luck.