Trader X makes Y billions last year trading options, Make tens of thousands of dollars every month trading options in an easy way, with our system you just need to spend only 10mins/day and become millionaires in shortest possible time, +1,000% average returns, with our recommendations see how I converted 5K into gazillions next day…
And many more…check out stock gumshoe website where he unfolds many of these so called “money makers”, though he covers stock newsletter primarily …
With all the marketing tactics, you will come across in one way or the other (via Google adsense on this site, etc) with such promising campaigns that lures you into giving impression as if-
- Trading options is a child’s play and doesn’t require efforts
- One will become rich overnight
- You can do these while you are sleeping because their system has a panacea for the “achilies heel” of options risk
Even though we didn’t lose a month at OPN (this month may be the first one), and also that our speculative earnings results have been over 80% wins, I never admit to the fact that option trading is easy. Just like any other business, Trading Option is a business and should be treated like a business no matter even if you do it part time. Just like any other business, it needs attention, it needs you to understand who your customers are, who your suppliers are, who your competitors are and what are your business’ strengths and weaknesses. Do you understand what I call “Dollar path” of your business i.e. money outflow and inflow. What are the choices you have made, what are the goals? and if those goals are smart (specific, measurable, achievable, realistice and time based), what are the strategies, what is your portfolio plan, are those time tested? and so on..
Money making has never been easier except during exceptional times. Sometime back I had mentioned that my friends in India and China had hardly believed in Oct/Nov’07 that their markets will fall and are too stretched. Many of those were first generation traders (they become long time investors when portfolio starts to accumulate losses) and had never seen “market fall”.
Trading is not an “instruction” driven business and it requires one to be very very quick in decision making. There are more than 1 way to get out of the trade and many times it will be different from last time. Let the newsletter provide you with the ideas, but ultimately, you have to have decision making in your own hands as per the trading plan you have for your investment goals. For instance, you may choose one newsletter from OptionPundit, another one from XYZ service, but these should serve specific purpose for your portfolio plan.
Also review, what’s driving your decision making, is it “greed” and “fear”? is it emotion driven or analysis driven? have you done sufficient paper trading that gives you confidence to fully understand options or the strategies you are going to use? are you treating option trading same way as stock trading? how much time have you spent playing with “what if” scenario planning vs. reading books or listening to gurus? Have you stress tested your portfolios, do as many simulation for your portfolios as possible, and one of those simulation will be turn out to be a winner for your portfolio…
I suggest you check out the emotional side of your trading preparation, are you being judgmental or analytical? are you in hurry to get fills? do you have risk management plans in place. I suggest have a blank paper, draw pictures of the risk/reward profile of your portfolio and adjustments for various scenarios. As per my learning, most motivation comes when I am able to convert a loss making portfolio into positive one and that’s the real win.
If you are looking for learning option trading, no need to go to seminars and spend thousands of dollars in one go. Prepare first and then go so you can ask right questions, adjustments etc to really seek value for your every dollar. Here are a few things that might set you started-
- Free Educational Resources from OIC
- Free educational webcasts from CBOE (It is even better than several paid seminars)
- Free Option Strategy guide from Chartbender
- Free Options Strategy Simulator from OIC
- Free resources/articles from OptionVue
There are much more in the OP’s toolbox that is free as well. Here are some books that I have suggested so far, read those, understand those and you are pretty much done from learning point of view
- Jeff has an excellent book on implied volatility
- All about various option strategies by Charles Cottle (not easy book)
- Options as strategic investment by Lawrence McMIllan
And there are several free articles at OptionPundit that you may find useful to get insights and prepare yourself before getting into this business. That’s pretty much it. Once you have equipped yourself with the basic to intermediate option education then go for paid seminars and you will be able to benefit the most.
Option trading is a business and should be given the same kind of respect as any other business demands. It requires hard work and thorough understanding. Once you have understood the fundamentals and been able to convert those into making money consistently, then only it’s easy.
Learn passsionately, trade carefully and profitablly, OP