Option Education: Do You Have the Traits of a Successful Trader?
Option trading – it’s so easy even a baby can do it, especially if that baby is a wisecracking little annoyance with all the social skills of a cynical college sophomore. The E*Trade baby has done more to ingrain in the American mind that trading options is easy than all the years of hucksters selling option trading accounts. The fact is that option trading may be easy – but trading options profitably is not. To consistently make a profit on the options market requires a good option education and the character traits that make someone a good trader. There are many companies and individuals who offer trading education, but the character traits that make a successful trader can’t be taught. Do you have what it takes to be a successful trader on the options market?
The average rookie trader comes into the market with a sense of bravado born of all those E*Trade ads and the general belief that anyone can trade options if you read a few books. Most of them exit the market within a few months, considerably chastened, having lost his stake given up on the idea of making money in a game for losers.
Of course, a little option education goes a long way in convincing would-be traders that trading is a serious business, not a game of Pachenko that anyone can play.
Option Education
Whether you intend to use options with the intent of making money or reducing the risk of holding other investments, you need both a solid trading education in the vocabulary, process and techniques of trading options – and a firm understanding of the traits you need to develop in order to become a good, consistently successful trader. If you have – or can develop – these traits, then you might be a good fit for option trading as a career.
Detail Oriented
You must be willing and interested in paying attention to details, because the signals to buy and sell are found in those minute details that many people overlook.
Disciplined
Trading options successfully requires discipline. You need to be disciplined enough to take the time to learn everything you can before jumping in to start trading, and disciplined enough to avoid making emotional decisions about your trading positions. Traders who let emotions rule them seldom last long in the markets.
Persistent
You’ll lose some trades. It’s the nature of the business. Luck is always part of the equation, but experience teaches the trader a great deal. The more you practice, the better you’ll become at recognizing the right time and conditions to make a buy or close out a position.
Patient
Patience is part of the trading life from the very start. Successful beginners have the patience to hold off on trading with real money until they’re ready. Successful traders have the patience to wait until the time and conditions are right to make a move in the market. If you jump too soon because you’re impatient, you’ll lose far more trades than you win.
Option education can help you learn all you need to know about using options to hedge your stock portfolio, manage risk in your stock holdings and generate an ongoing, steady income from stock trading, but it’s not a substitute for experience, practice and character. Before you jump into the training arena, do a fearless self-assessment and decide whether or not you have – or can develop – the character traits necessary to become a successful option trader.
Chris Robertson is an author of Majon International, one of the world’s MOST popular internet marketing companies on the web.
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