Option trading can be extreme. Read this article to learn what it takes to be successful

Learning How To Be a Successful Option Trader is easier than you think. And since options trading offers so much profit potential, learning to be a successful options traders is something a lot of individual investors are understandably curious about.

So

In this blog post Ill show you the number one thing that determines whether or not you will be successful in trading options. Plus, Ill share some of my favourite tools and free resources from all around the web. So after you read this blog post you should have a pretty good idea of what it takes to be a successful option trader.

And just so you know: Even though I primarily trade common stocks, I still have lots of options experience. I dont talk about it too much here. But I have written before about trading leap call options and put option trading examples both are techniques equity investors can use to augment their investing returns.

Now lets get down to the business of what really makes a successful option trader

The Most Important Factor in Being a Successful Option Trader:

If you want to be a successful option trader then theres one key distinction youll want to keep in mind. Basically, when youre trading options you need to decide if youre going to approach it like a trader or if youre going to approach it as an investor. I think thats the most important precept.

So while options can work well for everyone, be clear on how youre going to approach options trading. Speaking in very broad strokes:

• Investors looking to trade options should focus on long-dated call options that are already in the money. They will do best when buying options during a short-term technical pullback. On a short-term price rally, investors may want to opportunistically take profits (even more so than when buying the underlying equity).
• Traders looking to trade options should focus on short-dated call or put options based on their short term technical analysis.  Traders will likely want to buy out of the money options to avoid risking too much capital and to maximize percentage gains on quick moves. Traders should expect to lose a large percentage of these trades (with winners making up for multiple losers).

And by the way

If youre just getting started with option trading, I recommend test-driving your strategy before putting hard-earned money to work. Since options are a little tricky to first get the hang of try a stock simulator game to avoid expenses lessons on the road to becoming a successful option trader.

Links and Tools for Successful Option Traders:

The good thing about learning to be a successful option trader, is that there have already been plenty of options trading success stories. So instead of having to blaze your own trail you can follow the advice of other option trading experts whove already made the transition from strict equity trading only.

Top 10 Traits of a Successful Option Trader . Its much easier to be successful when youre emulating winners. So read this short blog post to see what successful option traders have in common.

10 Option Trading Traits from Investopedia . Lean a little more about what it takes to win at option trading using this Investopedia article. Its quite thorough and should shed even more light on what you need to do be a successful option trader.

Option Trader Personality Profile . This article is a little bit cheesy. But it does raise some good points about what it takes to be a successful option trader. If you thought stock trading made it difficult to maintain composure over your emotions just wait until you wade in to the volatile world of option trading!

Lean The Option Trading Basics . Success-With-Options has some great information to help you start learning option strategies. Their basic information doesnt assume much prior knowledge so if youre still interested in being a successful option trader this will be more than enough to get you going. You can also find free advanced option trading strategies to really help you improve your long term returns. Not bad right?

So

Hopefully this list of options trading resources will help get you on your way to being a successful option trader. While option trading can be frustrating at first, it can also be a great way to augment your investment returns.

And By The Way: If youre looking for more information on how to improve your stock market trading and investing, I encourage you to sign up below. Youll get a copy of my free ebook and weekly updates with my favourite stock trading tools and resources. Whats not to love?

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