Have we not seen it way too often?
There are ads that say you can make thousands of percent in profits in just a few days and become a millionaire in just a few weeks by trading options. Most of the time, these kinds of ads bring in hordes of hungry, in debt gamblers who need that "one big win" to make up for their losses or debts from other places.
95 percent of the people who went to these seminars, paid for them, and traded options actually lost all of their money. 3 percent will make some money on their first few trades, but they will lose all of it after that. 1 percent will make money that will last, and 1 percent will be lucky enough to make 1000 percent in their first month (again, just to lose it all within the next month). Anyone who has been in this situation usually thinks that trading options is nothing more than a gamble on a worthless instrument.
Still, option trading is a good way for many professional traders and fund managers to make a steady profit. Even though these professionals don't make 1000 percent in profits every month and never will, they (and I) still make a living in the markets month after month, year after year.
So, what makes option trading a real investment and trading activity for these professionals but just a gamble for those who lost all their money at option trading seminars?
It's a matter of ATTITUDE. Actions and decisions are based on how people feel. Anyone who goes into option trading with the goal of "getting rich quick" will soon find themselves "getting poor quick." This is because people who want to "make-it-big" on their next trade completely ignore any kind of trade management strategy, forgo sensible analysis in favour of a 50/50 "bet," and take totally senseless out-of-the-money positions that either make a lot of money or expire worthless.
A real professional at trading options uses a smart money management strategy for every trading opportunity, weighing the risk of not performing against it. This means that a real trader of options will never put all of his money into one big position that is out of the money. A real option trader uses trade analysis methods that have been proven to work so that the odds of success are in their favour. They don't treat every trade as if it were a 50/50 bet. A real professional at trading options figures out how much options leverage to use on each trade so that his portfolio is never over-leveraged. A real option trader doesn't expect to get rich on his next trade, and he doesn't try to hit a home run. Instead, he aims for a series of small wins that add up over time. A real option trader will never let one loss wipe out his entire portfolio. This is because he respects the market and knows that no matter how much research he does, there is always a chance that the market will go against him.
In a nutshell, the main difference between a real option trader who wins and stays in the game for years and a gambler who rarely lasts more than a month is how they think. If you don't have the right mindset, option trading, which is a smart and sophisticated way to make money, turns into nothing more than a lottery ticket.
The problem with most option trading seminars today is that they don't put these important parts of successful option trading together! All they teach is how anyone can get rich quickly through trading options. It's like showing someone how to stand in line to buy a lottery ticket. A real option trading system includes all the important parts of successful option trading, such as looking for trading opportunities in a systematic way, analysing that opportunity in light of the trading horizon needed, choosing the right option based on that opportunity's needs, managing trade risks in a balanced way, and more. One of these is the Star Trading System, which I have been teaching online for a long time.
So, don't you think it's time you changed how you think about and approach option trading?
