Stock Options Trading Millionaire Concepts
Having been trading stocks and options 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 actually seen millionaires end up being paupers over night …
One story told to me by my mentor is still engraved in my mind:
"When, there were 2 Wall Street stock exchange multi-millionaires. Both were incredibly successful and decided to share their insights with others by selling their stock market projections in newsletters. Each charged US$ 10,000 for their opinions. One trader was so curious to understand their views that he spent all of his $20,000 savings to buy both their viewpoints. His friends were naturally delighted about what the two masters had to say about the stock market`s direction. When they asked their good friend, he was fuming mad. Confused, they asked their good friend about his anger. He stated, `One said 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 choice market, individuals can have various viewpoints of future market instructions and still revenue. The distinctions lay in the stock choosing or options method and in the mental attitude and discipline one uses in implementing that strategy.
I share here the standard stock and alternative trading concepts I follow. By holding these concepts firmly in your mind, they will guide you consistently to success. These concepts will assist you reduce your risk and allow you to evaluate both what you are doing right and what you might be doing wrong.
You might have checked out concepts similar to these prior to. I and others use them since they work. And if you memorize and reflect on these principles, your mind can use them to direct you in your stock and choices trading.
CONCEPT 1.
SIMPLENESS IS PROFICIENCY.
Wendy Kirkland
I learned this from Click Here, When you feel that the stock and options trading method that you are following is too complicated even for easy understanding, it is most likely not the best.
In all aspects of successful stock and alternatives trading, the most basic techniques often emerge victorious. In the heat of a trade, it is easy for our brains to become mentally overloaded. If we have a complex technique, we can not stay up to date with the action. Easier is better.
CONCEPT 2.
NOBODY IS OBJECTIVE ENOUGH.
If you feel that you have absolute control over your emotions and can be unbiased in the heat of a stock or alternatives trade, you are either a hazardous species or you are an inexperienced trader.
No trader can be definitely objective, particularly when market action is unusual or hugely irregular. Just like the ideal storm can still shake the nerves of the most seasoned sailors, the perfect stock exchange storm can still unnerve and sink a trader really rapidly. For that reason, one should venture to automate as numerous crucial aspects of your technique as possible, specifically your profit-taking and stop-loss points.
PRINCIPLE 3.
HOLD ON TO YOUR GAINS AND CUT YOUR LOSSES.
This is the most important concept.
Many stock and options traders do the opposite …
They hang on to their losses way too long and watch their equity sink and sink and sink, or they leave their gains too soon just to see the rate increase and up and up. In time, their gains never ever cover their losses.
This principle takes some time to master appropriately. Reflect upon this concept and review your past stock and choices trades. If you have been undisciplined, you will see its truth.
CONCEPT 4.
HESITATE TO LOSE CASH.
Are you like a lot of novices who can`t wait to jump right into the stock and choices market with your money intending to trade as soon as possible?
On this point, I have found that most unprincipled traders are more afraid of losing out on "the next huge trade" than they hesitate of losing money! The key here is STICK TO YOUR TECHNIQUE! Take stock and alternatives trades when your method signals to do so and prevent taking trades when the conditions are not met. 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 throw away your cash since you traded unnecessarily and without following your stock and alternatives method.
CONCEPT 5.
YOUR NEXT TRADE COULD BE A LOSING TRADE.
Do you definitely think that your next stock or choices 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 typically happens after that? It isn`t pretty, is it?
No matter how confident you may be when getting in a trade, the stock and options market has a method of doing the unforeseen. Therefore, constantly stick to your portfolio management system. Do not compound your expected wins because you might end up intensifying your very genuine losses.
CONCEPT 6.
ASSESS YOUR EMOTIONAL CAPABILITY BEFORE INCREASING CAPITAL OUTLAY.
You know by now how various paper trading and real stock and alternatives trading is, don`t you?
In the very same way, after you get utilized to trading real money regularly, you discover it exceptionally different when you increase your capital by ten fold, don`t you?
What, then, is the difference? The distinction is in the psychological problem that comes with the possibility of losing more and 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 understand their maximum capacity in both dollars and emotion. Are you comfortable trading approximately a couple of thousand or tens of thousands or hundreds of thousands? Know your capacity before committing the funds.
PRINCIPLE 7.
YOU ARE A NEWBIE AT EVERY TRADE.
Ever felt like a professional after a couple of wins and then lose a lot on the next stock or alternatives trade?
Overconfidence and the incorrect sense of invincibility based upon previous wins is a dish for catastrophe. All professionals respect their next trade and go through all the appropriate steps of their stock or options technique before entry. Treat every trade as the first trade you have ever made in your life. Never differ your stock or options method. Never.
CONCEPT 8.
YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.
Ever followed an effective stock or options method just to stop working terribly?
You are the one who determines whether a method succeeds or stops working. Your personality and your discipline make or break the strategy that you use not vice versa. Like Robert Kiyosaki states, "The investor is the property or the liability, not the investment."
Comprehending yourself first will lead to ultimate success.
PRINCIPLE 9.
CONSISTENCY.
Have you ever altered your mind about how to execute a technique? When you make changes day after day, you wind up catching nothing but the wind.
Stock market changes have more variables than can be mathematically formulated. By following a proven technique, we are assured that someone successful has actually stacked the odds in our favour. When you evaluate both winning and losing trades, determine whether the entry, management, and exit fulfilled every criteria in the technique and whether you have followed it precisely before changing anything.
In conclusion …
I hope these easy guidelines that have actually led my ship out of the harshest of seas and into the very best harvests of my life will assist you too. Best of luck.