Option Trading Success

Article by James Thomas

There’s been a lot of hype in recent years about the potential returns that option trading can provide the private trader/investor.

Though this can certainly be the case, like all things, we need the right education and tools and of course experience to have consistent option trading success.

Option trading is no different. I personally have been trading options for the last 5 years and I must say it has been a steep and often expensive learning curve.

However, today I can definitely say that because ‘I’ve put the work in’ option trading now provides me with my ideal lifestyle – my time is my own!

Over the years, one of the biggest influences on my option trading has been Dr.Alexander Elder. He breaks down successful trading, whether that be stocks, options or futures into 3 core categories:

1) Mind

2) Method

3) Money

By mind he is referring to ‘psychology’ and every successful trader/investor that I have ever spoken to says that this is by far the most crucial.

A successful trader will have always remain objective and trade without emotion. This enables him/her to take advantage of the ‘emotionally-clouded’ trading decisions of others.

By method he is referring to ‘strategy’. To be successful in option trading you need to realize that there is no ‘best’ strategy but rather the ‘best’ strategy is the one that gives you the highest probability of success in the current market conditions AND fits in with your risk profile.

This refers not only to the actual option trading strategy you plan to use, but also technical/fundamental reasons for entering, holding and exiting every single trade.

But effective strategies are not anywhere near as important as ‘money’.

By money, Dr.Alexander Elder is referring to ‘money management’ i.e. the amount your capital you allocate to each trade and the percentage of this capital that you are prepared to lose.

Tight money management is absolutely vital, particularly when it comes to option trading. The old adage, “Cut your losses quickly and let your profits run” is more than just a cliche.

This is as true today as it has ever been and your option trading success depends on it!

Anyway, when all is said and done, the trader that can master, Mind, Method and Money has a whole world of reward awaiting him/her.

But you’ve gotta put in the time and effort.

Happy option trading!

About the Author

James Thomas is an avid options trader and also likes to write on a variety of niche topics online including Synnd social media software. Read his Synnd review and learn how you can outsource 90% of your Internet marketing for just !