How to become a full-time options trader?
- To become a full-time options trader is the dream of many people only a few people succeed it.
- Learn option chain analysis and option greeks
- People who become full-time options traders are skilled at money management and risk-taking.
- Your trading decision should be based upon the good reasoning and logic
- Emotion will destroy you during your trading path
- Under the stress environment, retail traders become more emotional
- Don't try to predict the future price
- Plan your trade and then trade your plan
- Always have a plan if your planning goes wrong
- To time the market accurate understand what volume is trying to do -identify testing up move or down move - stopping volume - no demand zone will help you to time the market.
- When they trade with emotion the emotional factors like fear-hope and greed increases
- When you are on the losing side of the market the stress interferes with your logical decision-making process.
- For example, if you are long on the market and market start down move, you are hoping for recovery for the exit because you are on the wrong side.
- On the other side, if you are long on the market and market start-up move, you are in fear of down move and start booking small profits,
- Unless you develop a trading system based on data this will happen again and again
Develop a trading system
- Any trading system is not perfect because it is designed by human and there is always a possibility of human error
- A trading system should be based on data and its correlation
- A trading system must have two essential component
- A trading system should cut your losses as quickly as possible and runs your profitable trade in the trade direction
- This principle is completely opposite of what the retail traders trying to do
- They don't cut their losses when they are wrong and get out early when they see a small profit
- A good trading system allows small losses and long profits
- If you develop this system and trying to bypass the sytem it makes you very valuable and undisciplined.
- Try to paper trade with your trading system this will help you to control impulsive trading.
- Those traders who don't want paper trading will not become a good trader
- To develop trading it is like writing the rules if you don't follow the rule you cant develop the rules
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How professional traders trade?
Working principle of stock market
What causes bull and bear market
Smart money vs Dumb money in the Stock market
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