Most people decided to learn about options trading in hopes that just learning how to trade options would allow them to somehow be able to make a consistent income or
grow their wealth quickly and massively. However, after they get through the beginner stages of learning about options, they begin to see how wide and vast the ocean of
options trading knowledge really is and that merely knowing what call options and put options are is less than the tip of the iceberg. They then move on to experimenting
and learning about various different options strategies and even employ them for years without any consistent results. If you are one such veteran options trader or experienced
options trader struggling with becoming consistent with options trading, I hope my decades of experience in options trading reflected in the deep exploration of many untold
and unwritten about issues of real life options trading can help shift your paradigm and help you see the light and achieve consistent profitability.
The list of articles here will grow over time as I post one article per week. As such, please bookmark and check back regularly.
Technical Analysis is as inseperable from options trading as wheels are to a car. However, options trading is hard enough, having to learn about, understand and be able to execute complex options strategies, technical analysis overlays an additional field of difficulty over the whole subject of options trading. As if options trading is not already hard enough, having to achieve a high degree of accuracy with your technical analysis rockets the difficulty curve straight into the sky. Below are a collection of articles I wrote about why it is so hard to achieve consistency in technical analysis and what you can do in order to overcome it.
As if getting the technical aspects of technical analysis down is not already hard enough, psychology plays a determinant role in the way you interpret results and come to conclusions in your technical analysis. This article explores one of such aspects, I call "Hope vs Reality".
As if getting your own mind under control is not hard enough, this singular missing piece in most people's technical analysis education and arsenal could be the single piece of the puzzle that breaks your technical analysis and pushes you towards wrong conclusions and "jumping the gun".
What is the on single most accurate technical indicator in the world? It doesn't exist. If it doesn't exist, does that mean that technical indicators are worthless for the purpose of predicting or understanding price movement? How then should technical indicators be employed so that it paints a reliable enough picture to put your money on?
While trying to rely on or search for the single holy grail indicator is one end of the spectrum, the other end of the spectrum of the same problem is the problem of overoptimization in technical analysis. Trying too hard to optimize your technical setups only lead to it collapsing the other way. Why is that so? How does this occur and what is the solution?
Beyond the apparent simplicity of call and put options, options trading becomes an endless ocean of complex strategies requiring not only the basic understanding of buying call options for bullish stocks and buying put options for bearish stocks but indepth knowledge of the pricing mechanism of options and its various influences in order to create and profit from immaterial pricing factors such as volatility and interest rates. However, even with this vast number of hundreds of possible known options strategies and innumerable possible variations, veteran options traders and experienced options traders may still find it hard to achieve consistent profitability after several years of experimentation. Why is that so? This section contains a collection of articles I wrote about some of the possible factors and what you can do to achieve a paradigm shift into a more profitable way of seeing how options trading works.
So, you have learned what options trading is, even started buying call and put options here and there but you simply don't seem to get anywhere near the magic of options trading. Even up to this stage, you have spend thousands of dollars and hours and still mastering the workings of these two simple call option and put option continue to seem so elusive. How long does it take to learn and master options trading anyways?
A lot of options traders have the misunderstanding that more advanced options strategies will give them more profits. As such, many options traders very quickly move into the pursuit of these so-called advanced options strategies right off the bat with very minimal options basic knowledge and just a passing idea of how some basic options strategies work. However, does these so called advanced options strategies really make you more money?
A lot of experienced options traders think that by employing advanced sophisticated options strategies, one could get to a point where luck is negligible and that we won't have to consider the impact that luck is going to have. Well, the bad news is this, no matter what options strategy you employ and no matter how well you stick to your strategy and no matter how well crafted your trading plan is, LUCK is always going to be a thing and BAD LUCK can still kill your options trading career faster than you can imagine. Learn how luck is always going to be a thing to consider and 2 ways you can overcome the effect of luck!
You can often tell the sophistication level of a trader/investor by the number of directions they see in the market; A stock trader typically sees a Two Directional Market which goes either Up or Down only. A slightly more sophisticated stock trader might start to see a Three directional Market which goes upwards, downwards or sideways. A slightly less sophisticated options trader might also see a Three directional market while a slightly more sophisticated options trader might start to see a four, five or even a SIX directional market! Learn what they are in this article.
While alot of options traders cringe at the idea of a bear market or market crash, real options traders actually celebrate it and the elite few actually make their fortunes during those times. Yes, you may be surprised to know that bear markets or market crashes are actually the best times to make money through options trading! In fact, utilizing the exact same options strategies, you will more often than not make significantly more profit during a bear market or market crash than during a normal bullish trending market. In fact, you might be able to return more than 5 times the normal profit on some options strategies during bear markets! Why is that so?
Many options traders spend the first 5 years of their options trading lives in the search for the ONE STRATEGY TO RULE THEM ALL. That one magic holy grail of an options strategy that will win no matter what and magically produce money with little to no effort and experience nor competence. However, after spending a lot of money learning various different options strategies, most options traders fail to experience that consistent effortless money making promised in options trading. There are many reasons for this, chief of all is that a good options strategy should be comprehensive and well crafted and well proven in the market. However, even with a well crafted and well proven options strategy, many options traders STILL fail to experience any success. Why is that so?
Most things in life work in the way that the simpler it is, the higher the chances of success tends to be while the more complex it is, the lower the chance of success tends to be as well. However, this logic is completely opposite in options trading in that the simpler the options strategy, the harder it tends to be to win and therefore the lower the chances of success! This is in fact why more advanced options strategies exist. Find out why this is so in this article.
So, you wish to become a great options trader? What exactly is a "Great Options Trader"? A great options trader is an options trader who is capable of consistently profiting from the options market over long periods of time enough to fuel any kind of lifestyle that options trader wants, independently, from anywhere in the world as long as there is internet connection. As such, it can be said that a great options trader is a person who has known true unbridled financial freedom. What is "unbridled financial freedom"? It is the ability to generate money every single month without being tied down to a single location nor taking up the majority of the waking hours. Indeed, for most people, making money means an almost equivalent commitment in time, energy and bondage to a single geographical location. A great options trader is indeed a modern day alchemist or financial wizard to whom producing money apparently from thin air anywhere in the world is a common, unsurprising, reality in life. So, what does it take to become one such Great Options Trader?
A lot of beginners to options trading think they will get the same result on a big fund as they will get on a small fund and vice versa. That is far from the truth. I hate to say it in this way but too many fake options gurus in the world has been promoting options trading falsely as a "get rich quick scheme" when the true magic of options is realised only with significant fund sizes, which is why I like to call it a "Rich Man Game" lately. In fact, the bigger your fund size, the better certain very advanced options strategies work and the safer and more consistent your options trading result becomes! On the contrary, the less amount of money you have, the more speculative options trading tends to become and the less consistent your results become, in fact, you are more likely to lose it all more than anything else. Why is that so?
A lot of beginners to options trading do not understand the depth and complexity of options trading. They think it is just something like stocks where you just buy low and then sell high for profit and leverage. For most beginners to options trading, they think that options trading is simply, if you expect a stock to go upwards, instead of buying the stock, just buy the option and then sell when price is higher for leverage. Therefore, most beginners think options trading is something you simply have to give a 2 hours seminar on or simply just a simple explanation of how to buy and sell will do. However, that is less than the tip of the iceberg...
Over the past few decades, there has been a proliferation of so-called "Weekend Options Seminars" that supposedly teaches you how to trade options, or more specifically how to make $10,000 with just $1,000 in a week, over the course of just a single weekend. These options seminars are usually held in fanciful hotels and charges thousands of dollars for a weekend. Can anyone really learn to make $10,000 from $1,000 reliably through a single weekend seminar? Can anyone really realize the full magic and potential of options over a single weekend?
The options market is decades old and since the beginning of the internet era, knowledge about options trading and the latest developments in options strategies and technologies have been made publicly available. Even www.Optiontradingpedia.com has been around since 2006! With such long term and widespread access to options trading knowledge and options strategies, even options mentors and training programs, one would expect that this "puzzle" has already been solved and the one way to profit consistently from options trading should have already been found and made widely available. However, even after decades of such development, still only about 5% of options traders ever make money from options trading... why is that so?
|Explore over 100 options strategies at : Options Strategy Library.