Stock Option Trading Millionaire Concepts

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

I have actually seen paupers end up being millionaires overnight …

And

I have seen millionaires end up being paupers overnight …

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

"As soon as, there were two Wall Street stock market multi-millionaires. Both were extremely effective and chose to share their insights with others by selling their stock market forecasts 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 buy both their viewpoints. His good friends were naturally delighted about what the two masters needed to say about the stock exchange`s direction. When they asked their friend, he was fuming mad. Confused, they asked their pal 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 option market, people can have various viewpoints of future market direction and still revenue. The differences lay in the stock choosing or options strategy and in the mental attitude and discipline one utilizes in implementing that technique.

I share here the standard stock and choice trading principles I follow. By holding these principles firmly in your mind, they will direct you regularly to profitability. These principles will help you decrease your threat and enable you to evaluate both what you are doing right and what you may be doing wrong.

You might have checked out ideas similar to these prior to. I and others use them due to the fact that they work. And if you remember and assess these principles, your mind can use them to guide you in your stock and choices trading.

PRINCIPLE 1.

SIMPLENESS IS MASTERY.
Wendy Kirkland
I learned this from Books by Wendy Kirkland, When you feel that the stock and choices trading technique that you are following is too complicated even for basic understanding, it is probably not the best.

In all aspects of successful stock and options trading, the most basic approaches often emerge victorious. In the heat of a trade, it is easy for our brains to become emotionally overwhelmed. If we have a complex method, we can not stay up to date with the action. Easier is better.

PRINCIPLE 2.

NOBODY IS GOAL ENOUGH.

If you feel that you have outright control over your feelings and can be objective in the heat of a stock or choices trade, you are either an unsafe species or you are an inexperienced trader.

No trader can be absolutely unbiased, especially when market action is unusual or wildly unpredictable. Similar to the best storm can still shake the nerves of the most seasoned sailors, the ideal stock exchange storm can still unnerve and sink a trader really rapidly. For that reason, one must strive to automate as lots of critical aspects of your method as possible, particularly your profit-taking and stop-loss points.

PRINCIPLE 3.

HOLD ON TO YOUR GAINS AND CUT YOUR LOSSES.

This is the most crucial principle.

A lot of stock and choices traders do the opposite …

They hang on to their losses way too long and enjoy their equity sink and sink and sink, or they leave their gains prematurely only to see the price go up and up and up. In time, their gains never cover their losses.

This principle takes some time to master correctly. Reflect upon this concept and review your previous stock and options trades. If you have been unrestrained, you will see its reality.

CONCEPT 4.

HESITATE TO LOSE MONEY.

Are you like many beginners who can`t wait to jump right into the stock and options market with your money wishing to trade as soon as possible?

On this point, I have actually found that a lot of unprincipled traders are more afraid of missing out on "the next huge trade" than they are afraid of losing cash! The secret here is STICK TO YOUR STRATEGY! Take stock and choices trades when your method signals to do so and prevent taking trades when the conditions are not satisfied. Exit trades when your method says to do so and leave them alone when the exit conditions are not in place.

The point here is to be scared to discard your money since you traded unnecessarily 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 options trade is going to be such a huge winner that you break your own finance rules and put in everything you have? Do you remember what usually occurs after that? It isn`t quite, is it?

No matter how confident you might be when entering a trade, the stock and alternatives market has a way of doing the unforeseen. For that reason, always stay with your portfolio management system. Do not compound your expected wins since you may end up intensifying your extremely genuine losses.

CONCEPT 6.

ASSESS YOUR EMOTIONAL CAPACITY PRIOR TO INCREASING CAPITAL OUTLAY.

You understand by now how different paper trading and genuine stock and alternatives trading is, don`t you?

In the very same way, after you get used to trading genuine money consistently, you find it extremely different when you increase your capital by ten fold, do not you?

What, then, is the difference? The difference remains in the emotional concern that comes with the possibility of losing increasingly more genuine cash. This takes place when you cross from paper trading to genuine trading and likewise when you increase your capital after some successes.

After a while, a lot of traders realize their maximum capacity in both dollars and emotion. Are you comfy trading as much as a few thousand or tens of thousands or hundreds of thousands? Know your capacity before committing the funds.

CONCEPT 7.

YOU ARE An AMATEUR AT EVERY TRADE.

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

Overconfidence and the false sense of invincibility based upon previous wins is a recipe for disaster. All professionals appreciate their next trade and go through all the appropriate actions of their stock or alternatives method before entry. Deal with every trade as the first trade you have actually ever made in your life. Never differ your stock or alternatives method. Never ever.

CONCEPT 8.

YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.

Ever followed an effective stock or choices method just to fail badly?

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

Understanding yourself first will result in ultimate success.

CONCEPT 9.

CONSISTENCY.

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

Stock market variations have more variables than can be mathematically formulated. By following a proven strategy, we are assured that someone successful has stacked the chances in our favour. When you evaluate both winning and losing trades, figure out whether the entry, management, and exit satisfied every criteria in the method and whether you have followed it precisely before changing anything.

In conclusion …

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