If you are new to options, you have, no doubt, asked yourself why you want to trade options.
You have heard of people making enormous amounts of money trading for a living.
The language of trading rolls off their tongues as smoothly as a downhill sled on ice.
They make it sound so easy.
And that is true. It can be easy
Options trading is not especially difficult. Of course, there are basic concepts to learn and
capital to be used.
But if you think you are going to make a huge amount of money right out of the gate, I
would caution you to reconsider. While some traders do get lucky early in their trading
careers often the successful traders learn the craft over a long period of time.
What options traders do all the time
- They study markets and get a sense of the price movement in stocks they want to trade.
- They learn about options contracts, puts, and calls, liquidity, implied volatility, strategies.
- They learn how to preserve their capital and not trade too big.
I have heard Tom Sosnoff, the founder of tastyworks say many times that the number
one reason traders fail is size. They put on trades too big for their account and end up losing their money when the trade goes against them, and they didn’t have the knowledge to manage the trade.
But this doesn’t have to describe you.
Options trading can be fun and interesting
I like to look at trading as a skill you want to get good at over time.
You like to learn new skills and with the proper amount of dedication and care you can
progress slowly toward your goals.
Dr Jim Schultz, another tasty trade personality says that as a new trader you should
dedicate your first six months to learning as much as you can about the skills you need to put
on effective trades.
Always trade small and don’t get in over your head.
Take your time
So, take your time and get good at your craft. Learn the basics. Get good at one or two
strategies. Paper trade a couple of markets are seeing how a trade plays out.
Soon you will have the confidence to make solid trading decisions and you’ll be glad you put
in the time and effort to learn this valuable skill.
If you want to learn more about developing your options trading skills, join our group
and receive regular updates directly to your inbox.