Stock Option Trading Millionaire Principles

Stock Options Trading Millionaire Principles

Having been trading stocks and options in the capital markets expertly throughout the years, I have seen lots of ups and downs.

I have seen paupers end up being millionaires over night …

And

I have actually seen millionaires end up being paupers over night …

One story told to me by my coach is still engraved in my mind:

"As soon as, there were two Wall Street stock market multi-millionaires. Both were exceptionally successful and decided to share their insights with others by selling their stock market projections in newsletters. Each charged US$ 10,000 for their viewpoints. One trader was so curious to understand their views that he spent all of his $20,000 savings to buy both their viewpoints. His pals were naturally thrilled about what the two masters had to state about the stock exchange's direction. When they asked their buddy, he was fuming mad. Baffled, they asked their good 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 alternative market, individuals can have different viewpoints of future market direction and still earnings. The differences lay in the stock choosing or alternatives method and in the mental attitude and discipline one utilizes in implementing that method.

I share here the standard stock and choice trading concepts I follow. By holding these principles strongly in your mind, they will guide you consistently to success. These principles will help you reduce your danger and enable you to assess both what you are doing right and what you may be doing wrong.

You may have checked out concepts similar to these prior to. I and others utilize them since they work. And if you memorize and assess these principles, your mind can utilize them to guide you in your stock and choices trading.

CONCEPT 1.

SIMPLENESS IS PROFICIENCY.
Wendy Kirkland
I picked up this trick from [dcl=9351, When you feel that the stock and options trading approach that you are following is too intricate even for simple understanding, it is probably not the best.

In all elements of effective stock and choices trading, the simplest methods often emerge triumphant. In the heat of a trade, it is simple for our brains to end up being mentally overloaded. If we have a complex technique, we can not keep up with the action. Simpler is much better.

CONCEPT 2.

NO ONE IS GOAL ENOUGH.

If you feel that you have outright control over your feelings and can be objective in the heat of a stock or options trade, you are either a harmful species or you are an unskilled trader.

No trader can be definitely objective, especially when market action is unusual or wildly irregular. Much like the perfect storm can still shake the nerves of the most experienced sailors, the ideal stock market storm can still unnerve and sink a trader really quickly. Therefore, one need to endeavor to automate as many important aspects of your method as possible, specifically your profit-taking and stop-loss points.

CONCEPT 3.

HOLD ON TO YOUR GAINS AND CUT YOUR LOSSES.

This is the most crucial concept.

Most stock and alternatives 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 prematurely just to see the rate go up and up and up. In time, their gains never ever cover their losses.

This concept takes some time to master properly. Contemplate this concept and examine your previous stock and choices trades. If you have been unrestrained, you will see its truth.

CONCEPT 4.

HESITATE TO LOSE MONEY.

Are you like many newbies who can't wait to leap right into the stock and choices market with your money wishing to trade as soon as possible?

On this point, I have found that the majority of unprincipled traders are more afraid of missing out on "the next big trade" than they hesitate of losing cash! The secret here is STAY WITH YOUR METHOD! Take stock and choices trades when your strategy signals to do so and prevent taking trades when the conditions are not satisfied. Exit trades when your method states to do so and leave them alone when the exit conditions are not in place.

The point here is to be afraid to get rid of your cash because you traded unnecessarily and without following your stock and choices technique.

PRINCIPLE 5.

YOUR NEXT TRADE COULD BE A LOSING TRADE.

Do you definitely think that your next stock or choices trade is going to be such a big winner that you break your own finance rules and put in everything you have? Do you remember what typically happens after that? It isn't pretty, is it?

No matter how positive you might be when getting in a trade, the stock and alternatives market has a method of doing the unforeseen. Therefore, always stick to your portfolio management system. Do not compound your anticipated wins since you might end up intensifying your extremely genuine losses.

CONCEPT 6.

GAUGE YOUR EMOTIONAL CAPABILITY BEFORE INCREASING CAPITAL OUTLAY.

You understand by now how various paper trading and genuine stock and choices trading is, don't you?

In the very same method, after you get used to trading real money consistently, you discover it very various when you increase your capital by 10 fold, do not you?

What, then, is the difference? The distinction remains in the psychological problem that includes the possibility of losing more and more genuine cash. This happens when you cross from paper trading to genuine trading and also when you increase your capital after some successes.

After a while, the majority of traders understand their optimal capacity in both dollars and emotion. Are you comfortable trading up to a few thousand or 10s of thousands or hundreds of thousands? Know your capability before devoting the funds.

PRINCIPLE 7.

YOU ARE A NOVICE AT EVERY TRADE.

Ever seemed like a specialist after a few wins and then lose a lot on the next stock or choices trade?

Overconfidence and the false sense of invincibility based on previous wins is a recipe for catastrophe. All specialists appreciate their next trade and go through all the proper steps of their stock or alternatives strategy prior to entry. Treat every trade as the very first trade you have actually ever made in your life. Never differ your stock or options method. Never.

CONCEPT 8.

YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.

Ever followed an effective stock or choices strategy only to fail badly?

You are the one who figures out whether a strategy prospers or stops working. Your character and your discipline make or break the strategy that you utilize not vice versa. Like Robert Kiyosaki says, "The investor is the property or the liability, not the investment."

Understanding yourself initially will result in ultimate success.

PRINCIPLE 9.

CONSISTENCY.

Have you ever changed your mind about how to execute a method? When you make changes day after day, you wind up capturing nothing but the wind.

Stock market changes have more variables than can be mathematically created. By following a proven method, we are ensured that somebody successful has actually stacked the odds in our favour. When you evaluate both winning and losing trades, identify whether the entry, management, and exit fulfilled every criteria in the method and whether you have followed it specifically prior to altering anything.

In conclusion …

I hope these simple guidelines that have actually led my ship out of the harshest of seas and into the very best harvests of my life will direct you too. Best of luck.