There are many option trading systems out there and the developers of these systems will always tell you that theirs is the one that will solve your financial problems and give you the freedom you’ve dreamed about.
And some of them may be right.
Some option trading systems will tell you that all you need is the RSI and volume indicators only, together with a few moving averages and bollinger bands. Others will focus on the ADX or the CCH indicators and their systems will focus around that.
Option Trading Systems – Stick With What Works
Some option trading systems will be simple and involve only going long, or ‘buying to open’ with the objective of selling to close at a profit within a very short time frame. They will give you all the indicators and chart setups to accomplish this. Others will emphasize longer term strategies that rely on option time decay. Some systems will involve directional trading, that is, predicting future market direction in the short term, while others will teach you about ‘delta neutral trading’ and preach strategies such as straddles and strangles which can make you a good profit as long as the market makes a significant move one way or the other.
All the above option trading systems may be great in themselves, but here’s the best tip you’ll ever get, from someone who’s done it all. The most important thing is, find one or more strategies that you understand well and that you’ve had regular success with and just keep doing it. Don’t allow yourself to get distracted by trying new strategies using real money, because you’ve seen the latest DVD or read some book that tells you how someone made a million with it.
It’s really as simple as that.
I remember a time in my trading life when I was using an option trading system that really worked for me. I started with about $5,000 and within a short time, transformed it into a bank account of over $20,000. I did this using a simple ‘buy to open’ and ‘sell to close’ strategy that I had learned, combined with a few straddle trades. I was doing really well.
But then I became impatient. The market I was trading in didn’t have the kind of liquidity that allowed me to always take a trade when I saw an opportunity. So I decided to switch from trading options to doing CFDs. At the same time, I was learning about ‘ABC swing trading’ according to W.D. Gann and changed the way I analyzed chart patterns and identified opportunities without fully understanding the context in which this system works.
Now whilst CFDs are far more liquid than options, which translates into more trading opportunities, they also involve much greater risk due to the way that their leveraging works. Unlike option trading, you can lose more than your investment, so the psychology wasn’t good for me either. So many times, I found myself stopped out, only to have the stock take off in the direction I had anticipated in the first place. I lost most of the money I had made from my previously successful option trading system.
The point is, you need to stay focused on an option trading system that you feel confident with and that has proven itself to work for you. Don’t allow yourself to be distracted by other systems that look great on the surface, but may not be compatible with your trading style or available concentration time – or that you simply may not yet understand well enough to implement effectively.
Over 90 percent of trading success is about your own psychology. It’s the critical thing that causes you to make all your trading decisions. This is why you must enter the market with confidence, knowing that whatever system you have adopted, you understand it well, have proven to yourself that it works, know the risks and believe that with patience and discipline, it will make you a consistent income for the rest of your life.
If you don’t have all this, there are three little words I have for you, right here, right now. DON’T DO IT!
You may have heard the expression “do one thing, do it well”. This was never so true as it is when it comes to the matter of trading the markets.
In this section we will explore a number of option trading systems and related subjects. So … let’s begin . . . just click on any of the linked items below that may interest you.
Types of Option Trading Systems
Option Trading Advisor
A good option trading advisor can make all the difference between profitable trading and a struggle to just stay afloat. This service is one of the best I’ve found.
Option Trading Class
The right option trading class can make all the difference between success and failure for the serious trader.
SuperTraders Kim Reilly and Nik Halik
Jamie McIntyre and the 21st Century Academy
Stock Option Trading Course
– the best one I have found
Market Club Review
I think you’ll find this Market Club Review more than interesting. These people really seem to have it all together when it comes to providing traders with the kind of tools which give us that edge in the markets.
Trading Pro System for traders who want to trade with confidence
Planet Wealth and the Amazing Dimitri Strategy
Spider Options Trading
– a great option trading system for trading the SPY index fund
QQQ Option Trading
– all about trading the PowerShares QQQQ ET fund
Wealth Building Options Trading
– A much better strategy than dollar cost averaging here.
Bottom Fishing Stocks Using Options
– How to purchase stocks even cheaper after they have taken a price dive
Options Trading Training
– what you should expect from a good option trading training course
– Dave Vallieres’ proprietory market indicator which has proven to be deadly accurate in virtually all market conditions. It is available for ThinkorSwim and Tradestation trading platforms. This could be one of your most profitable trading allies and great value for money.
Have an Options Trading Plan
People who trade without having an options trading plan first are putting themselves at a serious disadvantage. Like any business, having a plan is essential to success.
David Vallieres Trader and Options Mentor
David Vallieres began his trading career as a 16 year old, in 1985. He was trading during the famous 1987 October market crash. So this is someone with over 40 years trading experience. David initially made a lot of money from internet marketing and then hired one of the top CBOE wizards to train him in all the secrets that the professionals use to beat the market. Today, he is a full time trader and options mentor.
Video About One of the Best Option Trading Systems You’ll Find Anywhere