Stock Options Trading Millionaire Concepts

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

I have actually seen paupers become millionaires overnight …

And

I have actually seen millionaires end up being paupers overnight …

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

"As soon as, there were 2 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 opinions. One trader was so curious to understand their views that he spent all of his $20,000 cost savings to buy both their opinions. His good friends were naturally delighted about what the two masters had to state about the stock exchange`s direction. When they asked their friend, he was fuming mad. Confused, they asked their buddy about his anger. He said, `One said 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 choice market, people can have different opinions of future market instructions and still earnings. The distinctions lay in the stock selecting or options method and in the mental attitude and discipline one uses in carrying out that method.

I share here the standard stock and alternative trading concepts I follow. By holding these principles firmly in your mind, they will direct you regularly to success. These concepts will assist you decrease your risk and allow you to assess both what you are doing right and what you might be doing wrong.

You might have read ideas similar to these before. I and others use them since they work. And if you memorize and review these concepts, your mind can use them to direct you in your stock and choices trading.

CONCEPT 1.

SIMPLICITY IS MASTERY.
Wendy Kirkland
I learned this from Option Trading in Your Spare Time, When you feel that the stock and choices trading method that you are following is too intricate even for simple understanding, it is probably not the very best.

In all elements of successful stock and choices trading, the simplest techniques often emerge triumphant. In the heat of a trade, it is simple for our brains to become mentally overwhelmed. If we have a complex technique, we can not keep up with the action. Easier is much better.

CONCEPT 2.

NO ONE IS OBJECTIVE ENOUGH.

If you feel that you have absolute control over your feelings and can be unbiased in the heat of a stock or options trade, you are either an unsafe species or you are an inexperienced trader.

No trader can be absolutely objective, specifically when market action is unusual or hugely irregular. Much like the perfect storm can still shake the nerves of the most experienced sailors, the best stock market storm can still unnerve and sink a trader very quickly. For that reason, one must endeavor to automate as lots of important aspects 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 important principle.

A lot of stock and alternatives 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 too soon just to see the rate increase and up and up. With time, their gains never cover their losses.

This principle takes some time to master appropriately. Reflect upon this principle and examine your previous stock and alternatives trades. If you have actually been unrestrained, you will see its truth.

CONCEPT 4.

BE AFRAID TO LOSE CASH.

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

On this point, I have discovered that the majority of unprincipled traders are more afraid of missing out on "the next huge trade" than they hesitate of losing cash! The secret here is STAY WITH YOUR TECHNIQUE! Take stock and options trades when your strategy 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 get rid of your cash because you traded unnecessarily and without following your stock and choices technique.

PRINCIPLE 5.

YOUR NEXT TRADE COULD BE A LOSING TRADE.

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

No matter how positive you might be when going into a trade, the stock and choices market has a method of doing the unforeseen. For that reason, constantly stay with your portfolio management system. Do not compound your anticipated wins because you may wind up intensifying your really genuine losses.

PRINCIPLE 6.

ASSESS YOUR PSYCHOLOGICAL CAPACITY BEFORE INCREASING CAPITAL OUTLAY.

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

In the very same way, after you get used to trading real money regularly, you discover it exceptionally various when you increase your capital by 10 fold, don`t you?

What, then, is the distinction? The difference remains in the emotional burden that includes the possibility of losing increasingly more genuine money. This happens when you cross from paper trading to genuine trading and also when you increase your capital after some successes.

After a while, a lot of traders understand their maximum capability in both dollars and emotion. Are you comfortable trading as much as a few thousand or tens of thousands or hundreds of thousands? Know your capability before committing the funds.

PRINCIPLE 7.

YOU ARE A NEWBIE AT EVERY TRADE.

Ever seemed like a specialist after a few wins and after that lose a lot on the next stock or options trade?

Overconfidence and the false sense of invincibility based on previous wins is a recipe for catastrophe. All experts appreciate their next trade and go through all the proper actions of their stock or options technique before entry. Deal with every trade as the first trade you have ever made in your life. Never differ your stock or choices method. Never.

CONCEPT 8.

YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.

Ever followed a successful stock or options strategy just to fail terribly?

You are the one who identifies whether a strategy is successful 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 asset or the liability, not the investment."

Understanding yourself first will result in ultimate success.

PRINCIPLE 9.

CONSISTENCY.

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

Stock market changes have more variables than can be mathematically developed. By following a proven strategy, we are guaranteed that someone successful has actually stacked the chances in our favour. When you examine both winning and losing trades, figure out whether the entry, management, and exit met every requirements in the technique and whether you have actually followed it specifically before altering anything.

In conclusion …

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