Stock Option Trading Millionaire Concepts

Having been trading stocks and choices in the capital markets expertly throughout the years,I have seen numerous ups and downs.

I have seen paupers become millionaires overnight …

And

I have seen millionaires become paupers over night …

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

"Once,there were two Wall Street stock market multi-millionaires. Both were very effective and decided to share their insights with others by selling their stock exchange projections in newsletters. Each charged US$ 10,000 for their opinions. One trader was so curious to understand their views that he invested all of his $20,000 savings to purchase both their opinions. His friends were naturally excited about what the two masters had to say about the stock exchange`s direction. When they asked their good friend,he was fuming mad. Confused,they asked their good friend about his anger. He said,`One stated 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 alternative market,people can have different viewpoints of future market direction and still earnings. The differences lay in the stock selecting or choices strategy and in the mental attitude and discipline one utilizes in executing that technique.

I share here the standard stock and choice trading concepts I follow. By holding these concepts securely in your mind,they will direct you regularly to profitability. These concepts will help you reduce your risk and permit you to examine both what you are doing right and what you might be doing wrong.

You might have read ideas comparable to these before. I and others use them because they work. And if you remember and assess these principles,your mind can utilize them to direct you in your stock and choices trading.

CONCEPT 1.

SIMPLICITY IS PROFICIENCY.
Wendy Kirkland
I learned this from -,When you feel that the stock and alternatives trading technique that you are following is too intricate even for simple understanding,it is most likely not the very best.

In all aspects of successful stock and choices trading,the easiest approaches frequently emerge triumphant. In the heat of a trade,it is simple for our brains to become emotionally overwhelmed. If we have a complex method,we can not stay up to date with the action. Simpler is better.

CONCEPT 2.

NO ONE IS OBJECTIVE 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 a hazardous species or you are an unskilled trader.

No trader can be definitely objective,specifically when market action is unusual or extremely unpredictable. Similar to the best storm can still shake the nerves of the most seasoned sailors,the perfect stock exchange storm can still unnerve and sink a trader extremely quickly. Therefore,one need to strive to automate as many important elements of your strategy as possible,particularly your profit-taking and stop-loss points.

PRINCIPLE 3.

HANG ON TO YOUR GAINS AND CUT YOUR LOSSES.

This is the most crucial concept.

Many stock and alternatives traders do the opposite …

They hang on to their losses way too long and enjoy their equity sink and sink and sink,or they get out of their gains too soon just to see the price increase and up and up. Gradually,their gains never ever cover their losses.

This principle takes time to master properly. Contemplate this principle and examine your past stock and choices trades. If you have been undisciplined,you will see its reality.

PRINCIPLE 4.

BE AFRAID TO LOSE CASH.

Are you like a lot of novices who can`t wait to leap right into the stock and alternatives market with your money wishing to trade as soon as possible?

On this point,I have discovered that many 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 STRATEGY! Take stock and alternatives trades when your method signals to do so and avoid taking trades when the conditions are not met. Exit trades when your strategy states to do so and leave them alone when the exit conditions are not in place.

The point here is to be afraid to discard your cash since you traded needlessly and without following your stock and choices method.

PRINCIPLE 5.

YOUR NEXT TRADE COULD BE A LOSING TRADE.

Do you absolutely think that your next stock or choices trade is going to be such a big winner that you break your own money management rules and put in everything you have? Do you remember what normally takes place after that? It isn`t quite,is it?

No matter how positive you may be when entering a trade,the stock and choices market has a way of doing the unanticipated. For that reason,always stick to your portfolio management system. Do not intensify your anticipated wins due to the fact that you might wind up compounding your extremely real losses.

PRINCIPLE 6.

EVALUATE YOUR PSYCHOLOGICAL CAPABILITY PRIOR TO INCREASING CAPITAL OUTLAY.

You know by now how various paper trading and real stock and choices trading is,do not you?

In the very same method,after you get utilized to trading genuine cash regularly,you find it incredibly different when you increase your capital by 10 fold,do not you?

What,then,is the difference? The difference is in the emotional concern that comes with the possibility of losing more and more genuine money. This happens when you cross from paper trading to genuine trading and also when you increase your capital after some successes.

After a while,many traders realize their optimal capacity in both dollars and feeling. Are you comfy trading as much as a couple of thousand or 10s of thousands or hundreds of thousands? Know your capability before devoting the funds.

CONCEPT 7.

YOU ARE A NEWBIE AT EVERY TRADE.

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

Overconfidence and the false sense of invincibility based on past wins is a dish for disaster. All specialists respect their next trade and go through all the correct steps of their stock or alternatives method prior to entry. Treat every trade as the very first trade you have ever made in your life. Never ever deviate from your stock or alternatives strategy. Never ever.

PRINCIPLE 8.

YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.

Ever followed an effective stock or choices technique just to fail severely?

You are the one who determines whether a strategy prospers or stops working. Your character and your discipline make or break the technique that you use not vice versa. Like Robert Kiyosaki states,"The investor is the possession or the liability,not the financial investment."

Understanding yourself initially will result in ultimate success.

PRINCIPLE 9.

CONSISTENCY.

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

Stock exchange variations have more variables than can be mathematically developed. By following a tested technique,we are guaranteed that somebody successful has stacked the chances in our favour. When you examine both winning and losing trades,identify whether the entry,management,and exit satisfied every criteria in the technique and whether you have followed it exactly prior to altering anything.

In conclusion …

I hope these easy standards that have actually led my ship out of the harshest of seas and into the best harvests of my life will assist you too. Good Luck.