Stock Options Trading Millionaire Concepts

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

I have seen paupers end up being millionaires overnight …

And

I have actually seen millionaires become paupers overnight …

One story told to me by my mentor is still etched in my mind:

"As soon as, there were 2 Wall Street stock exchange multi-millionaires. Both were exceptionally effective and chose to share their insights with others by offering their stock market projections in newsletters. Each charged US$ 10,000 for their viewpoints. One trader was so curious to understand their views that he spent all of his $20,000 savings to purchase both their viewpoints. His friends were naturally delighted about what the two masters had to state about the stock market`s direction. When they asked their friend, he was fuming mad. Baffled, they asked their friend about his anger. He stated, `One said BULLISH and the other said 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 various opinions of future market direction and still profit. The differences lay in the stock selecting or choices strategy and in the mental attitude and discipline one utilizes in executing that strategy.

I share here the standard stock and alternative trading principles I follow. By holding these concepts securely in your mind, they will assist you consistently to profitability. These concepts will help you decrease your risk and enable you to examine both what you are doing right and what you may be doing wrong.

You may have read concepts comparable to these prior to. I and others use them because they work. And if you memorize and review these principles, 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 Books by Wendy Kirkland, When you feel that the stock and choices trading approach that you are following is too intricate even for basic understanding, it is most likely not the very best.

In all elements of successful stock and alternatives trading, the simplest techniques typically emerge triumphant. In the heat of a trade, it is simple for our brains to end up being emotionally overloaded. If we have a complex method, we can not keep up with the action. Easier is much better.

PRINCIPLE 2.

NO ONE IS GOAL ENOUGH.

If you feel that you have absolute control over your feelings and can be unbiased in the heat of a stock or alternatives trade, you are either a harmful species or you are an unskilled trader.

No trader can be definitely objective, especially when market action is uncommon or hugely irregular. Similar to the best storm can still shake the nerves of the most skilled sailors, the ideal stock exchange storm can still unnerve and sink a trader extremely quickly. For that reason, one should endeavor to automate as numerous vital aspects of your method as possible, especially your profit-taking and stop-loss points.

PRINCIPLE 3.

HANG ON TO YOUR GAINS AND CUT YOUR LOSSES.

This is the most important principle.

A lot of stock and options traders do the opposite …

They hold 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 cost go up and up and up. With time, their gains never ever cover their losses.

This concept takes time to master appropriately. Reflect upon this concept and evaluate your previous stock and alternatives trades. If you have been unrestrained, you will see its truth.

CONCEPT 4.

HESITATE TO LOSE CASH.

Are you like the majority of novices who can`t wait to leap right into the stock and options market with your cash wanting to trade as soon as possible?

On this point, I have actually found that many unprincipled traders are more afraid of losing out on "the next big trade" than they hesitate of losing money! The secret here is STAY WITH YOUR TECHNIQUE! Take stock and options trades when your strategy signals to do so and prevent taking trades when the conditions are not fulfilled. Exit trades when your technique says 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 unnecessarily and without following your stock and alternatives technique.

CONCEPT 5.

YOUR NEXT TRADE COULD BE A LOSING TRADE.

Do you definitely think that your next stock or options trade is going to be such a huge winner that you break your own money management rules and put in whatever you have? Do you remember what usually happens after that? It isn`t quite, is it?

No matter how confident you might be when going into a trade, the stock and alternatives market has a method of doing the unforeseen. Therefore, constantly adhere to your portfolio management system. Do not compound your expected wins since you may end up intensifying your really real losses.

PRINCIPLE 6.

GAUGE YOUR EMOTIONAL CAPACITY PRIOR TO INCREASING CAPITAL OUTLAY.

You know by now how different paper trading and real stock and choices trading is, don`t you?

In the very same way, after you get used to trading genuine cash regularly, you discover it incredibly different when you increase your capital by ten fold, do not you?

What, then, is the difference? The distinction is in the emotional problem that features the possibility of losing a growing number of real cash. This happens when you cross from paper trading to genuine trading and likewise when you increase your capital after some successes.

After a while, most traders recognize their optimal capability in both dollars and feeling. Are you comfy trading up to a couple of thousand or 10s of thousands or hundreds of thousands? Know your capability before devoting the funds.

PRINCIPLE 7.

YOU ARE A NEWBIE AT EVERY TRADE.

Ever felt like an expert after a couple of wins and then lose a lot on the next stock or choices trade?

Overconfidence and the false sense of invincibility based upon previous wins is a recipe for catastrophe. All professionals respect their next trade and go through all the proper steps of their stock or choices strategy before entry. Treat every trade as the very first trade you have ever made in your life. Never deviate from your stock or choices technique. Never.

CONCEPT 8.

YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.

Ever followed an effective stock or alternatives strategy just to stop working terribly?

You are the one who figures out whether a method is successful or fails. Your personality and your discipline make or break the method that you utilize not vice versa. Like Robert Kiyosaki states, "The financier is the asset or the liability, not the financial investment."

Comprehending yourself initially will cause ultimate success.

PRINCIPLE 9.

CONSISTENCY.

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

Stock market changes have more variables than can be mathematically developed. By following a tested strategy, we are ensured that somebody successful has actually stacked the odds in our favour. When you examine both winning and losing trades, figure out whether the entry, management, and exit fulfilled every criteria in the technique and whether you have followed it specifically before altering anything.

In conclusion …

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