Stock Options Trading Millionaire Principles

Having actually been trading stocks and options in the capital markets professionally for many years, I have seen lots of ups and downs.

I have seen paupers become millionaires overnight …

And

I have seen millionaires end up being paupers over night …

One story informed to me by my coach is still etched in my mind:

"Once, there were 2 Wall Street stock exchange multi-millionaires. Both were incredibly successful and decided to share their insights with others by offering 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 spent all of his $20,000 cost savings to buy both their opinions. His buddies were naturally thrilled about what the two masters had to state about the stock exchange`s instructions. When they asked their pal, he was fuming mad. Confused, they asked their good friend about his anger. He stated, `One said BULLISH and the other said BEARISH!`."

The point of this illustration is that it was the trader who was wrong. In today`s stock and choice market, people can have various viewpoints of future market direction and still revenue. The differences lay in the stock choosing or alternatives method and in the mental attitude and discipline one utilizes in executing that technique.

I share here the fundamental stock and choice trading principles I follow. By holding these concepts securely in your mind, they will direct you regularly to success. These principles will assist you reduce your danger and allow you to assess both what you are doing right and what you might be doing wrong.

You may have checked out ideas similar to these before. I and others use them since they work. And if you remember and reflect on these principles, your mind can use them to assist you in your stock and choices trading.

CONCEPT 1.

SIMPLICITY IS MASTERY.
Wendy Kirkland
I learned this from Wendy Kirkland, When you feel that the stock and alternatives trading approach that you are following is too complicated even for basic understanding, it is probably not the best.

In all elements of successful stock and choices trading, the easiest methods often emerge triumphant. In the heat of a trade, it is easy for our brains to end up being emotionally overwhelmed. If we have a complex method, we can not stay up to date with the action. Simpler is better.

CONCEPT 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 hazardous types or you are an inexperienced trader.

No trader can be absolutely unbiased, especially when market action is unusual or hugely erratic. Just like the perfect storm can still shake the nerves of the most skilled sailors, the ideal stock exchange storm can still unnerve and sink a trader extremely quickly. Therefore, one need to venture to automate as many important aspects of your technique as possible, specifically your profit-taking and stop-loss points.

PRINCIPLE 3.

HOLD ON TO YOUR GAINS AND CUT YOUR LOSSES.

This is the most essential concept.

The majority of stock and choices traders do the opposite …

They hold on to their losses way too long and watch their equity sink and sink and sink, or they leave their gains too soon just to see the cost go up and up and up. Over time, their gains never ever cover their losses.

This principle takes some time to master correctly. Contemplate this principle and evaluate your past stock and choices trades. If you have been unrestrained, you will see its fact.

CONCEPT 4.

BE AFRAID TO LOSE MONEY.

Are you like the majority of newbies who can`t wait to jump right into the stock and alternatives market with your cash wanting to trade as soon as possible?

On this point, I have found that a lot of unprincipled traders are more scared of missing out on "the next huge trade" than they hesitate of losing money! The key here is STICK TO YOUR STRATEGY! Take stock and choices trades when your method signals to do so and prevent taking trades when the conditions are not satisfied. Exit trades when your method states to do so and leave them alone when the exit conditions are not in place.

The point here is to be afraid to get rid of your money because you traded unnecessarily and without following your stock and options technique.

PRINCIPLE 5.

YOUR NEXT TRADE COULD BE A LOSING TRADE.

Do you absolutely 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 everything you have? Do you remember what usually takes place after that? It isn`t quite, is it?

No matter how positive you may be when getting in a trade, the stock and alternatives market has a method of doing the unforeseen. Therefore, always stay with your portfolio management system. Do not compound your anticipated wins since you may wind up intensifying your very genuine losses.

CONCEPT 6.

EVALUATE YOUR EMOTIONAL CAPABILITY PRIOR TO INCREASING CAPITAL OUTLAY.

You know by now how various paper trading and genuine stock and alternatives trading is, don`t you?

In the very same method, after you get used to trading real cash regularly, you find it incredibly various when you increase your capital by 10 fold, don`t you?

What, then, is the difference? The difference is in the psychological problem that includes the possibility of losing increasingly more real money. 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 comfortable trading up to a couple of thousand or tens of thousands or hundreds of thousands? Know your capability before dedicating the funds.

PRINCIPLE 7.

YOU ARE A NEWBIE AT EVERY TRADE.

Ever seemed like a specialist after a couple of wins and then lose a lot on the next stock or alternatives trade?

Overconfidence and the incorrect sense of invincibility based on previous wins is a recipe for catastrophe. All experts appreciate their next trade and go through all the correct steps of their stock or alternatives method before entry. Treat every trade as the first trade you have ever made in your life. Never ever differ your stock or options technique. Never.

PRINCIPLE 8.

YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE.

Ever followed an effective stock or choices technique only to fail terribly?

You are the one who identifies whether a method succeeds or fails. Your personality and your discipline make or break the method that you utilize not vice versa. Like Robert Kiyosaki says, "The financier is the asset or the liability, not the investment."

Comprehending yourself first will result in eventual success.

PRINCIPLE 9.

CONSISTENCY.

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

Stock exchange changes have more variables than can be mathematically created. By following a tested strategy, we are assured that somebody successful has actually stacked the chances in our favour. When you review both winning and losing trades, determine whether the entry, management, and exit fulfilled every criteria in the technique and whether you have followed it precisely before altering anything.

In conclusion …

I hope these easy standards that have actually led my ship of the harshest of seas and into the very best harvests of my life will assist you too. Good Luck.