Stock Options Trading Millionaire Principles

Having been trading stocks and options in the capital markets professionally throughout the years, I have seen lots of ups and downs.

I have actually seen paupers become millionaires overnight …

And

I have actually seen millionaires become paupers overnight …

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

"When, there were two Wall Street stock exchange multi-millionaires. Both were exceptionally successful 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 spent all of his $20,000 savings to buy both their opinions. His friends were naturally thrilled about what the two masters had to say about the stock market`s direction. When they asked their friend, he was fuming mad. Confused, they asked their pal about his anger. He stated, `One stated 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 instructions and still earnings. The distinctions lay in the stock selecting or choices strategy and in the mental attitude and discipline one uses in executing that technique.

I share here the standard stock and option trading principles I follow. By holding these principles firmly in your mind, they will direct you consistently to profitability. These principles will help you reduce your threat and permit you to examine both what you are doing right and what you might be doing wrong.

You might have checked out concepts comparable to these before. I and others utilize them since they work. And if you memorize and assess these concepts, your mind can use them to assist you in your stock and options trading.

PRINCIPLE 1.

SIMPLENESS IS PROFICIENCY.
Wendy Kirkland
I picked this up from https://store.stockcharts.com/products/companion-chartpack-for-wendy-kirklands-option-trading-in-your-spare-time, When you feel that the stock and options trading technique that you are following is too intricate even for simple understanding, it is most likely not the best.

In all elements of successful stock and options trading, the easiest methods frequently emerge victorious. In the heat of a trade, it is simple for our brains to become mentally strained. If we have a complex strategy, we can not stay up to date with the action. Simpler is much better.

CONCEPT 2.

NO ONE IS GOAL ENOUGH.

If you feel that you have absolute control over your emotions and can be objective in the heat of a stock or alternatives trade, you are either a dangerous types or you are an unskilled trader.

No trader can be absolutely unbiased, specifically when market action is uncommon or hugely irregular. Much like the perfect storm can still shake the nerves of the most skilled sailors, the best stock exchange storm can still unnerve and sink a trader very quickly. Therefore, one need to endeavor to automate as lots of important aspects of your technique 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 essential principle.

Many stock and choices traders do the opposite …

They hold on to their losses way too long and view their equity sink and sink and sink, or they get out of their gains prematurely only to see the price increase and up and up. With time, their gains never cover their losses.

This concept takes some time to master effectively. Reflect upon this principle and evaluate your previous stock and options trades. If you have actually been undisciplined, you will see its fact.

CONCEPT 4.

HESITATE TO LOSE MONEY.

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

On this point, I have found that most unprincipled traders are more scared of losing out on "the next huge trade" than they are afraid of losing money! The key here is STICK TO YOUR METHOD! Take stock and choices trades when your method signals to do so and prevent taking trades when the conditions are not met. Exit trades when your method states 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 choices strategy.

PRINCIPLE 5.

YOUR NEXT TRADE COULD BE A LOSING TRADE.

Do you absolutely believe that your next stock or choices trade is going to be such a big winner that you break your own finance guidelines and put in whatever you have? Do you remember what generally happens after that? It isn`t quite, is it?

No matter how confident you might be when entering a trade, the stock and choices market has a way of doing the unforeseen. Therefore, constantly stick to your portfolio management system. Do not compound your expected wins since you may wind up intensifying your really real losses.

PRINCIPLE 6.

GAUGE YOUR EMOTIONAL CAPACITY BEFORE 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 real cash regularly, you find it incredibly different when you increase your capital by ten fold, don`t you?

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

After a while, a lot of traders recognize their optimal capacity in both dollars and feeling. Are you comfy trading as much as a few thousand or tens of thousands or numerous thousands? Know your capability prior to 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 options trade?

Overconfidence and the false sense of invincibility based on previous wins is a dish for disaster. All professionals appreciate their next trade and go through all the correct steps of their stock or choices method prior to entry. Deal with every trade as the first trade you have ever made in your life. Never ever deviate from your stock or alternatives method. Never ever.

CONCEPT 8.

YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.

Ever followed a successful stock or alternatives technique just to fail severely?

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

Understanding yourself first will cause eventual 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 exchange variations have more variables than can be mathematically developed. By following a proven method, we are assured that somebody successful has stacked the odds in our favour. When you examine both winning and losing trades, identify whether the entry, management, and exit met every criteria in the strategy and whether you have followed it exactly before changing anything.

In conclusion …

I hope these simple guidelines that have actually led my ship of the harshest of seas and into the best harvests of my life will guide you too. Best of luck.

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