Stock Options Trading Millionaire Principles

Having been trading stocks and alternatives in the capital markets expertly over the years, I have seen lots of ups and downs.

I have seen paupers become millionaires overnight …

And

I have seen millionaires become paupers overnight …

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

"As soon as, there were 2 Wall Street stock market multi-millionaires. Both were extremely effective and decided to share their insights with others by selling their stock market forecasts in newsletters. Each charged US$ 10,000 for their opinions. One trader was so curious to know their views that he invested all of his $20,000 cost savings to buy both their opinions. His buddies were naturally delighted about what the two masters needed to state about the stock market`s direction. When they asked their good friend, he was fuming mad. Confused, they asked their good friend 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, people can have various opinions of future market instructions and still earnings. The distinctions lay in the stock choosing or choices strategy and in the mental attitude and discipline one uses in carrying out that technique.

I share here the basic stock and alternative trading concepts I follow. By holding these concepts strongly in your mind, they will guide you consistently to success. These principles will assist you reduce your danger and allow you to evaluate both what you are doing right and what you might be doing wrong.

You might have checked out concepts similar to these before. I and others use them because they work. And if you memorize and review these principles, your mind can utilize them to guide you in your stock and choices trading.

CONCEPT 1.

SIMPLICITY IS MASTERY.
Wendy Kirkland
I picked up this trick from https://store.stockcharts.com/products/companion-chartpack-for-wendy-kirklands-option-trading-in-your-spare-time, When you feel that the stock and alternatives trading technique that you are following is too complex even for easy understanding, it is most likely not the very best.

In all elements of effective stock and alternatives trading, the simplest methods often emerge victorious. In the heat of a trade, it is easy for our brains to end up being mentally strained. If we have a complex strategy, we can not keep up with the action. Easier is better.

PRINCIPLE 2.

NOBODY IS OBJECTIVE ENOUGH.

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

No trader can be absolutely unbiased, specifically when market action is unusual or wildly unpredictable. Just like the ideal storm can still shake the nerves of the most skilled sailors, the perfect stock market storm can still unnerve and sink a trader very rapidly. For that reason, one need to endeavor to automate as many vital aspects of your technique as possible, especially your profit-taking and stop-loss points.

PRINCIPLE 3.

HOLD ON TO YOUR GAINS AND CUT YOUR LOSSES.

This is the most essential concept.

A lot of stock and choices traders do the opposite …

They hold on to their losses way too long and enjoy their equity sink and sink and sink, or they get out of their gains prematurely just to see the cost go up and up and up. Over time, their gains never cover their losses.

This concept takes some time to master appropriately. Contemplate this concept and evaluate your past stock and options trades. If you have actually been undisciplined, you will see its truth.

CONCEPT 4.

HESITATE TO LOSE CASH.

Are you like the majority of novices 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 actually found that many unprincipled traders are more afraid of losing out on "the next big trade" than they are afraid of losing cash! The key here is STAY WITH YOUR STRATEGY! Take stock and choices trades when your technique signals to do so and prevent taking trades when the conditions are not fulfilled. Exit trades when your strategy 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 money due to the fact that you traded unnecessarily and without following your stock and choices strategy.

PRINCIPLE 5.

YOUR NEXT TRADE COULD BE A LOSING TRADE.

Do you definitely believe 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 usually occurs after that? It isn`t quite, is it?

No matter how confident you might be when getting in a trade, the stock and options market has a way of doing the unanticipated. Therefore, constantly stay with your portfolio management system. Do not compound your anticipated wins since you may wind up compounding your extremely genuine losses.

PRINCIPLE 6.

DETERMINE YOUR EMOTIONAL CAPACITY BEFORE INCREASING CAPITAL OUTLAY.

You know by now how different paper trading and genuine stock and options trading is, do not you?

In the very same method, after you get used to trading genuine money regularly, you discover it very various when you increase your capital by ten fold, do not you?

What, then, is the distinction? The distinction is in the psychological concern that features the possibility of losing increasingly more real 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, the majority of traders recognize their maximum capacity in both dollars and emotion. Are you comfy trading as much as a couple of thousand or 10s of thousands or hundreds of thousands? Know your capacity prior to devoting the funds.

CONCEPT 7.

YOU ARE A BEGINNER 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 past wins is a dish for disaster. All experts appreciate their next trade and go through all the proper actions of their stock or alternatives method prior to entry. Treat every trade as the very first trade you have actually ever made in your life. Never differ your stock or alternatives technique. Never.

PRINCIPLE 8.

YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.

Ever followed a successful stock or choices strategy just to stop working badly?

You are the one who identifies whether a technique is successful or fails. Your character and your discipline make or break the technique that you use not vice versa. Like Robert Kiyosaki says, "The investor is the property or the liability, not the financial investment."

Understanding yourself first will cause ultimate success.

CONCEPT 9.

CONSISTENCY.

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

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

In conclusion …

I hope these basic standards that have led my ship out of the harshest of seas and into the best harvests of my life will assist you too. All the best.