Stock Options Trading Millionaire Principles

Having been trading stocks and choices in the capital markets professionally for many years,I have actually seen many ups and downs.

I have actually seen paupers become millionaires overnight …

And

I have seen millionaires end up being paupers over night …

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

"As soon as,there were two Wall Street stock market multi-millionaires. Both were exceptionally effective and decided to share their insights with others by selling their stock exchange forecasts in newsletters. Each charged US$ 10,000 for their opinions. One trader was so curious to understand their views that he invested all of his $20,000 cost savings to purchase 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 friend,he was fuming mad. Confused,they asked their buddy 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 option market,people can have different opinions of future market instructions and still earnings. The distinctions lay in the stock picking or options method and in the mental attitude and discipline one utilizes in carrying out that technique.

I share here the fundamental stock and option trading concepts I follow. By holding these concepts firmly in your mind,they will guide you consistently to profitability. These concepts will help you decrease your threat and allow you to examine both what you are doing right and what you might be doing wrong.

You may have read ideas similar to these prior to. I and others use them since they work. And if you remember and reflect on these concepts,your mind can use them to assist you in your stock and options trading.

PRINCIPLE 1.

SIMPLICITY IS MASTERY.
Wendy Kirkland
I picked up this trick from Wendy Kirkland Trading,When you feel that the stock and options trading approach that you are following is too intricate even for easy understanding,it is probably not the best.

In all elements of effective stock and options trading,the simplest approaches often emerge triumphant. In the heat of a trade,it is easy for our brains to become mentally strained. If we have a complex technique,we can not keep up with the action. Simpler is better.

PRINCIPLE 2.

NOBODY IS GOAL ENOUGH.

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

No trader can be definitely unbiased,particularly when market action is uncommon or extremely irregular. Just like the best storm can still shake the nerves of the most experienced sailors,the perfect stock market storm can still unnerve and sink a trader extremely quickly. Therefore,one should endeavor to automate as lots of vital elements of your technique as possible,particularly your profit-taking and stop-loss points.

CONCEPT 3.

HANG ON TO YOUR GAINS AND CUT YOUR LOSSES.

This is the most crucial principle.

A lot of stock and choices traders do the opposite …

They hang on to their losses way too long and enjoy their equity sink and sink and sink,or they get out of their gains too soon just to see the rate go up and up and up. With time,their gains never cover their losses.

This principle takes some time to master properly. Contemplate this concept and review your previous stock and alternatives trades. If you have actually been undisciplined,you will see its reality.

PRINCIPLE 4.

HESITATE TO LOSE CASH.

Are you like many newbies who can`t wait to jump right into the stock and choices market with your cash 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 money! The secret here is ADHERE TO YOUR METHOD! Take stock and alternatives trades when your strategy signals to do so and avoid taking trades when the conditions are not met. Exit trades when your strategy says to do so and leave them alone when the exit conditions are not in place.

The point here is to be afraid to discard your cash due to the fact that you traded unnecessarily and without following your stock and alternatives strategy.

PRINCIPLE 5.

YOUR NEXT TRADE COULD BE A LOSING TRADE.

Do you definitely believe that your next stock or choices 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 generally happens after that? It isn`t quite,is it?

No matter how positive you might be when getting in a trade,the stock and choices market has a method of doing the unanticipated. Therefore,always adhere to your portfolio management system. Do not intensify your awaited wins since you might end up intensifying your very real losses.

PRINCIPLE 6.

EVALUATE YOUR PSYCHOLOGICAL CAPACITY 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 method,after you get used to trading real cash consistently,you discover it exceptionally different when you increase your capital by 10 fold,do not you?

What,then,is the difference? The distinction is in the psychological concern that comes with the possibility of losing increasingly more real money. This occurs when you cross from paper trading to real trading and also when you increase your capital after some successes.

After a while,many traders realize their maximum capacity in both dollars and emotion. Are you comfortable trading up to a couple of thousand or 10s of thousands or hundreds of thousands? Know your capacity prior to dedicating the funds.

CONCEPT 7.

YOU ARE A BEGINNER AT EVERY TRADE.

Ever seemed like a professional after a few wins and then lose a lot on the next stock or alternatives trade?

Overconfidence and the false sense of invincibility based upon previous wins is a dish for disaster. All professionals appreciate their next trade and go through all the appropriate steps of their stock or alternatives technique before entry. Treat every trade as the very first trade you have actually ever made in your life. Never deviate from your stock or options method. Never.

CONCEPT 8.

YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.

Ever followed a successful stock or alternatives method only to fail severely?

You are the one who determines whether a method succeeds or fails. Your personality and your discipline make or break the strategy 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.

PRINCIPLE 9.

CONSISTENCY.

Have you ever altered your mind about how to implement a strategy? When you make changes day after day,you end up capturing nothing but the wind.

Stock exchange variations have more variables than can be mathematically created. By following a tested strategy,we are guaranteed that someone effective has stacked the odds in our favour. When you evaluate both winning and losing trades,identify whether the entry,management,and exit met every criteria in the method and whether you have actually followed it precisely prior to altering anything.

In conclusion …

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