Stock Options Trading Millionaire Concepts

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

I have actually seen paupers end up being 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:

"As soon as, there were two Wall Street stock market multi-millionaires. Both were exceptionally successful and chose to share their insights with others by offering 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 opinions. His good friends were naturally thrilled about what the two masters needed to say about the stock exchange`s instructions. When they asked their good friend, he was fuming mad. Confused, they asked their friend about his anger. He said, `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 choice market, individuals can have various opinions of future market instructions and still earnings. The differences lay in the stock picking or options technique and in the mental attitude and discipline one utilizes in implementing that strategy.

I share here the standard stock and alternative trading principles I follow. By holding these concepts securely in your mind, they will direct you regularly to success. These principles will assist you decrease your danger and permit you to examine 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 because they work. And if you remember and assess these principles, your mind can utilize them to direct you in your stock and choices trading.

PRINCIPLE 1.

SIMPLICITY IS PROFICIENCY.
Wendy Kirkland
I learned this from Wendy Kirkland , When you feel that the stock and alternatives trading technique that you are following is too complicated even for basic understanding, it is probably not the very best.

In all aspects of successful stock and alternatives trading, the most basic approaches often emerge victorious. In the heat of a trade, it is easy for our brains to end up being emotionally strained. If we have a complex method, we can not keep up with the action. Simpler is better.

CONCEPT 2.

NO ONE IS OBJECTIVE ENOUGH.

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

No trader can be absolutely unbiased, particularly when market action is unusual or extremely irregular. Much like the best storm can still shake the nerves of the most seasoned sailors, the best stock market storm can still unnerve and sink a trader really rapidly. Therefore, one must endeavor to automate as many critical elements of your method 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 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 prematurely just to see the cost go up and up and up. Gradually, their gains never ever cover their losses.

This concept requires time to master correctly. Contemplate this concept and examine your past stock and options trades. If you have been undisciplined, you will see its reality.

PRINCIPLE 4.

BE AFRAID TO LOSE MONEY.

Are you like a lot of newbies who can`t wait to jump right into the stock and options market with your money hoping to trade as soon as possible?

On this point, I have actually discovered that most unprincipled traders are more afraid of missing out on "the next huge trade" than they hesitate of losing cash! The key here is STICK TO YOUR STRATEGY! Take stock and alternatives trades when your strategy 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 get rid of your cash because you traded needlessly and without following your stock and options method.

CONCEPT 5.

YOUR NEXT TRADE COULD BE A LOSING TRADE.

Do you definitely believe that your next stock or options trade is going to be such a big winner that you break your own finance rules and put in everything 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 getting in a trade, the stock and alternatives market has a method of doing the unexpected. Therefore, constantly stick to your portfolio management system. Do not compound your anticipated wins since you may wind up compounding your really genuine losses.

PRINCIPLE 6.

GAUGE YOUR EMOTIONAL CAPACITY BEFORE INCREASING CAPITAL OUTLAY.

You understand 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 real money consistently, you discover it incredibly various when you increase your capital by 10 fold, do not you?

What, then, is the distinction? The difference is in the emotional concern that features the possibility of losing a growing number of real money. 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, most traders realize their optimal capacity in both dollars and emotion. Are you comfortable trading up to a couple of thousand or tens of thousands or hundreds of thousands? Know your capability prior to dedicating the funds.

CONCEPT 7.

YOU ARE A NOVICE AT EVERY TRADE.

Ever felt like a professional after a couple of wins and after that lose a lot on the next stock or choices trade?

Overconfidence and the incorrect sense of invincibility based upon previous wins is a dish for catastrophe. All specialists respect their next trade and go through all the proper steps of their stock or choices method prior to entry. Treat every trade as the very first trade you have actually ever made in your life. Never ever differ your stock or options technique. Never ever.

CONCEPT 8.

YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.

Ever followed a successful stock or choices strategy only to stop working badly?

You are the one who identifies whether a technique succeeds or fails. Your character and your discipline make or break the strategy that you use not vice versa. Like Robert Kiyosaki says, "The investor is the possession 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 exchange variations have more variables than can be mathematically formulated. By following a proven method, we are guaranteed that somebody successful has actually stacked the chances in our favour. When you evaluate both winning and losing trades, figure out whether the entry, management, and exit fulfilled every requirements in the strategy and whether you have actually followed it exactly prior to altering anything.

In conclusion …

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