Are there any Warren Buffett like equivalents in the options world? It's pretty common for people to come up trading options, but the markets I'm doing and ultimately these plays have by far been my most successful bets.
Table of contents
- Conclusion: Why Most Traders Lose Money Is Not Surprising Anymore
- Do Options Traders Know Something About 22nd Century (XXII) Stock We Don't?
- Is Day Trading Worth It?
The principal is to have adequate knowledge of different markets and assets. Moreover, a trader has to stay up to date so he needs to follow the news. The trading world is under constant change. The trades are transformed, the innovations are implemented. Options trading is a never-ending learning process. Learning does not only mean to read about markets and technical analysis. This area includes also the psychological side of trading.
Anybody, who is interested in trading, wants to become successful. Is it a person with a fortune who can spend holidays in the best hotels all over the world? Well, may be, but I would rather focus on more mundane matters. So I would describe a successful trader as a professional who has developed the following skills:.
This, more or less, covers the definition of a successful trader. Everyone has to start somewhere.
Conclusion: Why Most Traders Lose Money Is Not Surprising Anymore
It is not possible to know everything right away. Every successful trader had to start the journey from the beginning. So a professional was once a newbie. He had to pass some stages to find himself in a place he is now. And although not a lot of people pass through all the four stages it is, in fact, less than 0.
Do Options Traders Know Something About 22nd Century (XXII) Stock We Don't?
So what are 4 stages of becoming successful in trading? The first stage is an introduction to the trading world. This is a time where people move from interest in the topic to real action. That is, they open their own accounts on the platforms and learn. Very often the beginners start with the demo accounts. After a certain time spent there trying different assets on different markets without risking own money, they switch to the real accounts.
But their trading reminds more of a game than a profession. They follow primitive signals and pick random markets. They lose, but they win as well and they are encouraged to invest more. This phase will not last long. For some, it can be only a few hours.
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- Stock Trading: How to Begin, How to Survive?
For others a month. During this time half of the newcomers will resign. They will be discouraged by the way the real trading works. They will discover it is not as simple as they thought and that they do not wish to spend so much time learning. The other half will enter the second phase. This is the phase where people start to learn and train their skills. They realise trading is not a game. They seek for good strategies and enter the circle of traders.
They try different indicators to find good ones that will enable them to make a profit with possibly small effort. They also focus on keeping the money in their accounts and only then start making small profits. They rely on ready-made systems. This stage lasts usually a period of several months, up to a year. Many will give up as they discover trading is not bringing big money fast. The rest will train to be disciplined in following a particular strategy.
Here comes a kind of enlightenment. Traders who stayed long enough to enter this phase begin to understand that ready-made systems are not perfect. That they have some lacks and everyone has to adjust them to individual needs. This happens on the third level. The traders start to think about how to make small changes in the strategies , so they suit better personal preferences.
Another thing that happens here is that the traders become really aware of the fact they should develop a good money management system. That in order to make a profit first they have to be able to maintain balance in the accounts. The last stage. It took me three years to build up my real estate business. It took less than six months for me to lose everything. I needed money and so my friend introduced me to a multi-millionaire who was a stock option trader.
It took him all of 10 minutes to point out what I was doing wrong: I was putting too much focus on making money. Some people trust my wisdom and just follow what I teach. Others have problems with this approach and say things like Having all that money sitting in cash is not productive. I'd rather be earning something on that cash instead of letting it sit there being eaten up my inflation. Have you ever heard an option trader say, " hey I quit trading because they made too much money?
It's losing money that causes option traders to give up on their dream of becoming rich and financially independent. And this leads to Secret 3 of all successful option traders: you always, always, always, trade to protect yourself from a loss. When you protect yourself from losing money you avoid the 1 reason why people fail losing money. Most new traders only think about how much money they can make. But let me show you a real life example of how this works….
Is Day Trading Worth It?
Multiply that 2. AND at the same time you were protected from losing all your money which is what happens to most amateurs and greedy people. Whatever the heck you want to do with it. But don't believe me, believe your experience. Trade my way and your way side by side and see which approach works best for you. Free Video Case Study Newsletter.
MarketClub Stock Trading Software. Trader Travis's YouTube Channel.