OptionTradingIQ
New Contributor
Read one book per month
There really is so much to learn when it comes to options and you need to be an avid reader and learn as much as you can. One thing I aimed to do when I was starting out was read one book per month. You could also aim to read a couple of educational articles on the web each day as well. Sites like Seeking Alpha and Stock Twits are great and of course Options Trading IQ as well!
Have realistic expectations
One problem for many beginners is they get sucked in by the big numbers some people are promising. The reality is, you will likely struggle for the first couple of years with very inconsistent returns. Trading is hard work! It takes lots of
discipline, knowledge, planning and a good system.
Learn about stocks first
In order to become a successful option trader, you need to learn about stocks first. You need to understand the various factors that move a stocks price such as earnings announcements, GDP releases and other economic factors. It is vitally important to learn how different stocks perform in different market environments before you can start successfully trading options.
Paper trade first
This one is really important. A lot of people just jump right in after reading a few books and think they are an expert. In fact, I was guilty of this when I first started out. Paper trading will allow you to get a feel for trading options and how it works without risking your hard earned money. You should also paper trade any new strategy even if you have been trading for a while. I still paper trade today if there is something new that I want to try out.
Keep It Simple
When you're just starting out, do you think you really need to know about put ratio backspreads, volatility skews, vomma and double diagonals? No, you don't and sometimes simple is better. Don't place too many trades that
it gets too difficult to monitor and manage.
Have a trading plan
80% of people do not have a trading plan and that is precisely why 80% of people are not successful. Trading is a business, and your trading plan is like your business plan. You wouldn't start a business without a plan
would you??
[video=youtube;hGjOWC767FQ]http://www.youtube.com/watch?v=hGjOWC767FQ[/video]
There really is so much to learn when it comes to options and you need to be an avid reader and learn as much as you can. One thing I aimed to do when I was starting out was read one book per month. You could also aim to read a couple of educational articles on the web each day as well. Sites like Seeking Alpha and Stock Twits are great and of course Options Trading IQ as well!
Have realistic expectations
One problem for many beginners is they get sucked in by the big numbers some people are promising. The reality is, you will likely struggle for the first couple of years with very inconsistent returns. Trading is hard work! It takes lots of
discipline, knowledge, planning and a good system.
Learn about stocks first
In order to become a successful option trader, you need to learn about stocks first. You need to understand the various factors that move a stocks price such as earnings announcements, GDP releases and other economic factors. It is vitally important to learn how different stocks perform in different market environments before you can start successfully trading options.
Paper trade first
This one is really important. A lot of people just jump right in after reading a few books and think they are an expert. In fact, I was guilty of this when I first started out. Paper trading will allow you to get a feel for trading options and how it works without risking your hard earned money. You should also paper trade any new strategy even if you have been trading for a while. I still paper trade today if there is something new that I want to try out.
Keep It Simple
When you're just starting out, do you think you really need to know about put ratio backspreads, volatility skews, vomma and double diagonals? No, you don't and sometimes simple is better. Don't place too many trades that
it gets too difficult to monitor and manage.
Have a trading plan
80% of people do not have a trading plan and that is precisely why 80% of people are not successful. Trading is a business, and your trading plan is like your business plan. You wouldn't start a business without a plan
would you??
[video=youtube;hGjOWC767FQ]http://www.youtube.com/watch?v=hGjOWC767FQ[/video]
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