Stock Option Trading Millionaire Concepts

Having been trading stocks and options in the capital markets expertly for many years, I have actually seen lots of ups and downs.

I have seen paupers end up being millionaires over night …

And

I have actually seen millionaires become paupers overnight …

One story told to me by my mentor is still engraved in my mind:

"When, there were two Wall Street stock exchange multi-millionaires. Both were incredibly successful and chose to share their insights with others by offering their stock market forecasts in newsletters. Each charged US$ 10,000 for their viewpoints. One trader was so curious to know their views that he invested all of his $20,000 savings to purchase both their opinions. His pals were naturally thrilled about what the two masters had to state about the stock exchange`s instructions. When they asked their good friend, he was fuming mad. Confused, they asked their pal about his anger. He stated, `One stated BULLISH and the other stated BEARISH!`."

The point of this illustration is that it was the trader who was wrong. In today`s stock and option market, individuals can have different viewpoints of future market direction and still earnings. The differences lay in the stock picking or options technique and in the mental attitude and discipline one uses in carrying out that strategy.

I share here the fundamental stock and alternative trading concepts I follow. By holding these principles strongly in your mind, they will direct you regularly to success. These concepts will help you decrease your danger and enable you to examine both what you are doing right and what you may be doing wrong.

You may have checked out concepts comparable to these before. I and others utilize them since they work. And if you memorize and assess these concepts, your mind can use them to guide you in your stock and alternatives trading.

CONCEPT 1.

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

In all aspects of successful stock and options trading, the easiest techniques often emerge triumphant. In the heat of a trade, it is simple for our brains to end up being mentally overloaded. If we have a complex method, we can not stay up to date with the action. Simpler is much better.

CONCEPT 2.

NO ONE 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 harmful species or you are an unskilled trader.

No trader can be definitely objective, particularly when market action is unusual or hugely erratic. Similar to the ideal 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 need to venture to automate as numerous important elements of your technique as possible, especially your profit-taking and stop-loss points.

PRINCIPLE 3.

HANG ON TO YOUR GAINS AND CUT YOUR LOSSES.

This is the most important principle.

A lot of stock and alternatives traders do the opposite …

They hold on to their losses way too long and view their equity sink and sink and sink, or they leave their gains prematurely only to see the price go up and up and up. Gradually, their gains never cover their losses.

This principle requires time to master correctly. Reflect upon this concept and review your previous stock and choices trades. If you have been undisciplined, you will see its fact.

PRINCIPLE 4.

HESITATE TO LOSE MONEY.

Are you like most beginners who can`t wait to jump right into the stock and options market with your cash wishing to trade as soon as possible?

On this point, I have found that most unprincipled traders are more afraid of missing out on "the next big trade" than they are afraid of losing cash! The secret here is STAY WITH YOUR TECHNIQUE! Take stock and alternatives trades when your technique signals to do so and avoid taking trades when the conditions are not met. Exit trades when your technique says to do so and leave them alone when the exit conditions are not in place.

The point here is to be scared to throw away your cash because you traded unnecessarily and without following your stock and alternatives technique.

PRINCIPLE 5.

YOUR NEXT TRADE COULD BE A LOSING TRADE.

Do you absolutely think that your next stock or options trade is going to be such a big winner that you break your own money management rules and put in whatever you have? Do you remember what normally happens after that? It isn`t quite, is it?

No matter how confident you might be when entering a trade, the stock and options market has a way of doing the unexpected. Therefore, constantly adhere to your portfolio management system. Do not compound your anticipated wins due to the fact that you may wind up compounding your extremely real losses.

CONCEPT 6.

ASSESS YOUR EMOTIONAL CAPACITY BEFORE INCREASING CAPITAL OUTLAY.

You understand by now how different paper trading and genuine stock and alternatives trading is, don`t you?

In the very same way, after you get utilized to trading genuine cash regularly, you find it extremely different when you increase your capital by ten fold, do not you?

What, then, is the distinction? The distinction remains in the psychological burden that features the possibility of losing increasingly more genuine cash. 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 capability in both dollars and emotion. Are you comfortable trading approximately a few thousand or 10s of thousands or hundreds of thousands? Know your capacity before dedicating the funds.

PRINCIPLE 7.

YOU ARE An AMATEUR AT EVERY TRADE.

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

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

PRINCIPLE 8.

YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.

Ever followed a successful stock or options strategy just to stop working severely?

You are the one who identifies whether a method prospers or stops working. Your character and your discipline make or break the technique that you utilize not vice versa. Like Robert Kiyosaki says, "The financier is the property or the liability, not the financial investment."

Understanding yourself first will cause ultimate success.

PRINCIPLE 9.

CONSISTENCY.

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

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

In conclusion …

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