The Proper Mindset For Trading Options
The market is not an auto-teller system where you just go to withdraw money at will
. The market is like an ocean and most of us option traders are seafarers.All expert seafarers know that there are times where you should not go out to sea at all. These are the periods where the veterans sit back and watch the amateurs perish in the thunder storms.
An options trader recognizes such seasons and is patient in waiting around for the harvest time to come before making a move. Many amateur option traders (yes, broke too) are more fascinated in creating lots of trades than to make rewarding trades.
Most of them will hurry in and merely trade something even if market situations are too turbulent to cause a profitable trade. As we have stated before, option trading greatly amplifies every whipsaw created by the underlying property.
When you enter in the market during very turbulent periods, the whipsaws are enough to scare every option trader into making the wrong steps or to result in unnecessary tripping of stop loss positions.
An options trader is just like an eagle; He soars and glides peacefully and patiently, and just when a clear opportunity turns up does he soar down mercilessly for the kill.
This trader is systematic in discovering trading opportunities, systematic in trade and portfolio management, systematic in the execution of every trade, systematic in the stop loss of each trade, systematic in the profit taking of each trade, systematic with her or his life-style (so as to keep a good mind in trading hours), systematic in loss recovery, and many more. Nothing is left to last minute decisions.
No one can be trusted to make perfect decisions under pressure. You leave no choice to be made during those periods as each opportunity and also their corresponding action has been planned beforehand.
Unsystematic option traders, especially in the area of trade management , will often find themself creating huge losses and really little profits all the time.
You need to be not only systematic, but also a highly disciplined trader. Stay with their trading plan, stop loss points and profit taking process with an iron clad discipline regardless of how good or terrible their situation is doing.
Being disciplined also means that millionaire option traders are not driven by fear of loss or greed for income. They've got just one mission and that is to carry their trading methods to their ends.
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