Options Investing: Successful Trading Habits
Options Investing: Successful Habits of a Trader
1) Follow the Rule of 3: I will not enter a trade unless I have 3 reasons from my list of indicators for doing so.
2) We keep our losses small
3) We adjust targets and stops at the end of the day
4) We try to keep our commissions low
5) We dont trade first thing at the open, we wait a while and trade later in the day.
6) We know the general market trend and trade accordingly
7) We write down our trades.
8) We never average down a losing position
9) We never overtrade
10) We give 10% of our profits to charity. Per the words of John D. Rockefeller:
Work for all you get
Give away the first 10%
Invest the next 10%
Live on the rest
Account for every penny
Best option trading tips and habits
Thanks to member George A. for sending these to me. He notes that these habits are taken from Chapter 4 of a book he is now reading Trend Trading for a Living by Dr. Thomas Carr. Keep in mind that these are habits written for stock daytraders.
I agree with all of them except with maybe number 1. I don’t use too many technical indicators in my options trading and options selling and so this does not apply. But I do like #5 a lot – do not trade at the open. I have made this a rule for my own trading. I learned this the hard way after many losses. Now I wait until 10am central (1.5 hours after the open) to enter or adjust. I don’t mind getting out of a trade at the open to take profits. But otherwise the open is too crazy and often not a good indicator of how things will play out during the day.
There are many other rules that I follow and members of the www.optiongenius.com site can access these rules in the Resources section of the member’s area.
can I trade with you my preferred options strategy buying call options? thanking you in anticipation please note that I am living in Athens, Greece
STICK WITH ONE STRATEGY IS THE RULE OF A SUCCESSFUL TRADER THAT I KNOW. HE IS A SELLER OF OPTIONS AT SIGNIFICANT SUPPORT LEVELS TO OWN THE STOCK AND DO A COVERED WRITE. KEEP THE TIME FRAME TO 30 DAYS. KEEP IT IN THE MONEY. 10 PERCENT RETURN IS POSSIBLE PER MONTH AND 100 PETCENT PER YEAR IA
#1 Never buy any thing stocks,etfs, options futures,future options BUt only sell options. keep Qty small I prefer 1 + staggered further out the strike as time go.
# 2 SELL deep OTM options long term consider seasonality in every commodity , in equity only sell PUTs , consider 5 or below Delta with Openintrest on high side, chances are never go wrong, If stock put to you turn around & sell for profit or sell call to collect premium (covered call)
#3 Never trade front of earnings that is big boys game.
#4 account for political situation specially commodity options.
#5 You will never go broke by taking profit early, re enter the same trade to next session market.
Last but least never over trade , keep 50 ~ 40 % of account in reserve will never see the margin call, exchanges & broker have no mercy no matter who you are they watch their A*s not yours.
Tattoo these rules in a head can’t go wrong selling (writing)
I agree 100%, very good words of wisdom for all…