Hi there investors. I hope I find you doing well today, and that your portfolio is seeing consistent returns. This article on successful option trading is number two in a series of six. Each article is accompanied by a video, and I highly recommend you to watch them all.

One very important step in becoming a better options trader is to spend ample time back testing. Currently there are just a few option software programs on the market that can help you achieve this task, but back testing is worth your time. I personally learned a lot by using Optionvue as well a Think or Swim to back test my option strategies. Although, the previously mentioned software’s are very good, San Jose Options has just released a new type of back testing tool called the Options Toolkit. This back tester saves you a lot of time when compared to any other options that testing software.

For instance, I used to spend several hours using other options analytical software to back tests stocks over earnings release dates. I was able to find some winning trades; however, the work was so tedious and boring that I did not have the patience to back test 4000 stocks. Now, with the new San Jose Options back tester, I can turn days in into seconds with the single click of a mouse.

So while back testing is very important to see how your strategies have played out in the past, another important quality that every successful option trader has to have is experience. Unfortunately, experience only comes with time, but the reason we need this time to pass is because the stock market has many different faces, and as an option trader we need to fully understand the market as deeply as possible.

Paper trading is also a great way to learn how to trade options. Again, you can simply open an account at Think or Swim or almost any of their options broker and get a free paper trading account to practice with. Although it might be difficult, it’s actually very important to paper trade for at least six months to a year. As mentioned before it’s very important to have experience over time, and paper trading is one way to acquire experience without risking any money.

In the last part of this video we discuss why it’s important to keep about 25% of your money in cash. Good option traders know how to make adjustments, they know how to lock in profits, and they need this money to do just that. It’s never a good idea to use up all of your capital in your trading account. This can lead to serious problems. So again, if you want to become a good option trader, then leave plenty of money in cash so you can always do what you need to do.

To Find Success with Option Trading visit the San Jose Options Course at www.sjoptions.com

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