Stock Option Investing Millionaire StandardsStock Option Investing Millionaire Standards
Having actually been trading stocks and alternatives in the capital markets professionally throughout the years,I have seen numerous ups and downs. I have seen paupers become millionaires over night … And I have seen millionaires become paupers over night … One story informed to me by my mentor is still etched in my mind: ” Once,there were two Wall Street stock exchange multi-millionaires. Both were exceptionally successful and chose to share their insights with others by offering their stock exchange forecasts in newsletters. Each charged US$ 10,000 for their opinions. One trader was so curious to know their views that he spent all of his $20,000 cost savings to buy both their opinions. His good friends were naturally excited about what the two masters needed to state about the stock exchange’s direction. When they asked their good friend,he was fuming mad. Baffled,they asked their good friend about his anger. He said,’One said BULLISH and the other said BEARISH!'”. - is a perfect example. The point of this illustration is that it was the trader who was wrong. In today’s stock and choice market,individuals can have different opinions of future market direction and still profit. The distinctions lay in the stock choosing or alternatives technique and in the mental attitude and discipline one utilizes in carrying out that technique. I share here the standard stock and choice trading concepts I follow.
By holding these concepts firmly in your mind,they will guide you regularly to success. These concepts will help you reduce your danger and enable you to examine both what you are doing right and what you may be doing wrong. You may have read ideas similar to these before. I and others use them because they work. And if you remember and review these concepts,your mind can use them to guide you in your stock and alternatives trading.
CONCEPT 1. SIMPLENESS IS MASTERY. When you feel that the stock and alternatives trading approach that you are following is too complex even for easy understanding,it is probably not the best. In all elements of successful stock and alternatives trading,the most basic approaches typically emerge victorious. In the heat of a trade,it is simple for our brains to become mentally overwhelmed.
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 harmful types or you are an inexperienced trader. No trader can be absolutely unbiased,specifically when market action is unusual or hugely unpredictable. Similar to the ideal storm can still shake the nerves of the most experienced sailors,the ideal stock exchange storm can still unnerve and sink a trader really quickly. Therefore,one must endeavor to automate as numerous crucial elements of your technique as possible,specifically your profit-taking and stop-loss points.
CONCEPT 3. HANG ON TO YOUR GAINS AND CUT YOUR LOSSES. This is the most essential principle. A lot of stock and alternatives traders do the opposite … They hold on to their losses way too long and watch their equity sink and sink and sink,or they leave their gains too soon only to see the price increase and up and up. Over time,their gains never ever cover their losses. This principle takes some time to master properly. Reflect upon this principle and review your past stock and alternatives trades. If you have been unrestrained,you will see its fact.
CONCEPT 4. BE AFRAID TO LOSE MONEY. Are you like many beginners who can’t wait to jump right into the stock and alternatives market with your cash intending to trade as soon as possible? On this point,I have discovered that many unprincipled traders are more scared of losing out on “the next huge trade” than they hesitate of losing cash! The secret here is STICK TO YOUR STRATEGY! Take stock and alternatives trades when your technique signals to do so and prevent taking trades when the conditions are not satisfied. Exit trades when your technique states 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 cash because you traded unnecessarily and without following your stock and alternatives technique.
CONCEPT 5. YOUR NEXT TRADE COULD BE A LOSING TRADE. Do you absolutely believe that your next stock or alternatives trade is going to be such a big winner that you break your own money management guidelines and put in whatever you have? Do you remember what usually takes place after that? It isn’t pretty,is it? No matter how positive you may be when entering a trade,the stock and alternatives market has a way of doing the unanticipated. Always stick to your portfolio management system. Do not intensify your expected wins because you may end up compounding your really genuine losses.
CONCEPT 6. ASSESS YOUR EMOTIONAL CAPACITY BEFORE INCREASING CAPITAL OUTLAY. You know by now how different paper trading and genuine stock and alternatives trading is,do not you? In the very same way,after you get used to trading genuine cash regularly,you find it exceptionally different when you increase your capital by ten fold,do not you? What,then,is the difference? The difference is in the emotional 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,many traders realize their optimal capacity in both dollars and emotion. Are you comfortable trading as much as a couple of thousand or tens of thousands or hundreds of thousands? Know your capacity before dedicating the funds.
CONCEPT 7. YOU ARE A NOVICE AT EVERY TRADE. Ever seemed like an expert after a couple of wins and then lose a lot on the next stock or alternatives trade? All specialists appreciate their next trade and go through all the proper actions of their stock or alternatives technique before entry. Never deviate from your stock or alternatives technique.
CONCEPT 8. YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE. Ever followed an effective stock or alternatives technique only to stop working terribly? You are the one who determines whether a method is successful or fails. Your personality and your discipline make or break the technique that you use not vice versa. Like Robert Kiyosaki states,”The investor is the asset or the liability,not the investment.”. Understanding yourself initially will cause eventual success.
CONCEPT 9. CONSISTENCY. Have you ever altered 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 created. By following a tested technique,we are guaranteed that someone successful has stacked the odds in our favour.
When you review both winning and losing trades,figure out whether the entry,management,and exit satisfied every requirements in the technique and whether you have followed it exactly before changing anything.
In conclusion … I hope these easy guidelines that have led my ship out of the harshest of seas and into the best harvests of my life will guide you too. Best of luck.