Stock Options Trading Millionaire Principles
Having been trading stocks and options in the capital markets expertly for many years, I have seen many ups and downs.
I have actually seen paupers end up being millionaires over night …
And
I have seen millionaires end up being paupers over night …
One story told to me by my coach is still engraved in my mind:
"When, there were 2 Wall Street stock exchange multi-millionaires. Both were exceptionally successful and decided to share their insights with others by offering their stock exchange forecasts in newsletters. Each charged US$ 10,000 for their opinions. One trader was so curious to know their views that he spent all of his $20,000 savings to purchase both their viewpoints. His pals were naturally thrilled about what the two masters needed to state about the stock market`s instructions. When they asked their good friend, he was fuming mad. Baffled, they asked their good friend about his anger. He stated, `One said BULLISH and the other stated BEARISH!`."
The point of this illustration is that it was the trader who was wrong. In today`s stock and choice market, people can have different opinions of future market direction and still revenue. The distinctions lay in the stock picking or options strategy and in the mental attitude and discipline one uses in executing that technique.
I share here the standard stock and choice trading principles I follow. By holding these concepts firmly in your mind, they will assist you consistently to success. These concepts will help you decrease your threat and permit you to assess both what you are doing right and what you may be doing wrong.
You may have read ideas comparable to these prior to. I and others utilize them since they work. And if you memorize and review these concepts, your mind can utilize them to assist you in your stock and alternatives trading.
PRINCIPLE 1.
SIMPLENESS IS MASTERY.
Wendy Kirkland
I picked up this trick from -, When you feel that the stock and alternatives trading method that you are following is too complicated even for easy understanding, it is most likely not the very best.
In all aspects of successful stock and options trading, the most basic approaches typically emerge victorious. In the heat of a trade, it is easy for our brains to become mentally strained. If we have a complex technique, we can not stay up to date with the action. Easier is better.
PRINCIPLE 2.
NO ONE IS GOAL ENOUGH.
If you feel that you have absolute control over your feelings and can be objective in the heat of a stock or options trade, you are either an unsafe types or you are an unskilled trader.
No trader can be definitely objective, particularly when market action is unusual or extremely unpredictable. Much like the ideal storm can still shake the nerves of the most seasoned sailors, the perfect stock exchange storm can still unnerve and sink a trader extremely rapidly. For that reason, one should endeavor to automate as many critical aspects of your strategy as possible, specifically your profit-taking and stop-loss points.
CONCEPT 3.
HANG ON TO YOUR GAINS AND CUT YOUR LOSSES.
This is the most essential concept.
The majority of stock and alternatives traders do the opposite …
They hold on to their losses way too long and view their equity sink and sink and sink, or they leave their gains prematurely just to see the rate increase and up and up. Over time, their gains never ever cover their losses.
This principle takes some time to master appropriately. Reflect upon this concept and examine your past stock and alternatives trades. If you have been undisciplined, you will see its fact.
PRINCIPLE 4.
HESITATE TO LOSE MONEY.
Are you like many novices who can`t wait to jump right into the stock and choices market with your money hoping to trade as soon as possible?
On this point, I have found that most unprincipled traders are more afraid of losing out on "the next huge trade" than they hesitate of losing money! The key here is ADHERE TO YOUR TECHNIQUE! Take stock and options trades when your strategy signals to do so and avoid taking trades when the conditions are not met. Exit trades when your technique 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 money since you traded needlessly and without following your stock and options technique.
CONCEPT 5.
YOUR NEXT TRADE COULD BE A LOSING TRADE.
Do you absolutely think that your next stock or alternatives trade is going to be such a big winner that you break your own money management rules and put in whatever you have? Do you remember what usually takes place after that? It isn`t pretty, is it?
No matter how confident you might be when going into a trade, the stock and alternatives market has a way of doing the unexpected. Therefore, always stay with your portfolio management system. Do not intensify your expected wins due to the fact that you might wind up compounding your really real losses.
CONCEPT 6.
ASSESS YOUR EMOTIONAL CAPACITY BEFORE INCREASING CAPITAL OUTLAY.
You understand by now how different paper trading and real stock and alternatives trading is, don`t you?
In the very same method, after you get utilized to trading genuine cash consistently, you find it incredibly different when you increase your capital by ten fold, do not you?
What, then, is the distinction? The difference is in the psychological burden that includes the possibility of losing increasingly 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, a lot of traders understand their maximum capacity in both dollars and feeling. Are you comfy trading approximately a couple of thousand or tens of thousands or numerous thousands? Know your capability before dedicating the funds.
CONCEPT 7.
YOU ARE A NOVICE AT EVERY TRADE.
Ever seemed like an expert after a couple of wins and then lose a lot on the next stock or options trade?
Overconfidence and the false sense of invincibility based upon previous wins is a dish for disaster. All experts appreciate their next trade and go through all the appropriate actions 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 deviate from your stock or options method. Never ever.
PRINCIPLE 8.
YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.
Ever followed an effective stock or choices technique only to stop working badly?
You are the one who determines whether a strategy is successful or fails. Your character and your discipline make or break the strategy that you use not vice versa. Like Robert Kiyosaki states, "The investor is the property or the liability, not the investment."
Understanding yourself initially will cause eventual success.
CONCEPT 9.
CONSISTENCY.
Have you ever altered your mind about how to carry out a method? When you make changes day after day, you wind up capturing nothing but the wind.
Stock market fluctuations have more variables than can be mathematically developed. By following a proven technique, we are assured that somebody successful has stacked the chances in our favour. When you review both winning and losing trades, identify whether the entry, management, and exit satisfied every requirements in the technique and whether you have followed it precisely prior to altering anything.
In conclusion …
I hope these easy guidelines that have led my ship of the harshest of seas and into the very best harvests of my life will guide you too. All the best.