Option Trading! Doing Right and Gaining!
Options are relatively new financial tools actively used by most businessmen, investors and traders. Option trading can give good profits to any trader, but also may make them suffer losses. That's why one should realize how to use different types of options correctly so as to gain from them and cut losses to minimum.
2.Profits and Losses!
3.Tips for an Option Trader!
This article will be dedicated to buying and selling options for earning. What's about another usage of this tool, loss-cutting, - that shouldn't be difficult, as once doesn't need to predict prices' behavior - they only have to make an agreement and insure risks.
Profits and Losses!
Don't be so naive to suppose all traders gain at option exchange. It's impossible because they play against each other. For instance, you've bought an option and earned 20 $ for it. How did you get these profits? Just from option's seller - another trader! In this case a broker is just a middleman, taking no part in trading. So, there are those who earn, and those who lose at the exchange. You must realize it and aim at becoming one of the former, without wasting your deposit in a short time. Trading with options, you can either earn big money, or lose it, and you will gain from others' losses, and lose for their profits.
Tips for an Option Trader!
- Firstly, before entering option exchange, study all shades and laws of the financial market. Surely, there are no exams, but if you can't predict quotations' movements, options will be like a casino for you where you'll waste your money. Even if you were persuaded that everyone could trade with options and didn't need any knowledge, you were cheated. If you don't believe me - invest and start trading, and when you have your deposit down, recall these words and don't leave bad reviews about option exchange - you were warned! But still try to trade. Just spend a couple of months to learn how to forecast and then you'll have a chance to gain real money there.
- The skill of estimating risks is essential for saving deposit in the first month. And if you can't do this, spontaneously buying options for all the money, without ability to answer how much you will lose in case of a fail - forget about option exchange and option trading. Before starting, get this skill. The key feature of options - fixed risks! You can calculate potential losses if the bet is wrong. Don't ignore this advantage - it has already saved many traders' deposits.
- For the first sight, option (especially binary option) exchange looks like a casino. It's not true. The truth is traders earn not with luck there, but with their own knowledge. Though, they place bets, without using financial tools. You mustn't consider this job like a game, because your trader's career and your money are on the stake. When you start placing bets reasonably, then you'll be able to call yourself an option trader, instead of an exchange player. What's the border between these two terms? Actually, there is no such, except psychological mood. If you play, you can afford losing, but when working - you will try hard to gain.
- Emotions are all traders' enemy. And though emotional stress is stronger at forex, than at option exchange, but it nevertheless exist. Don't bee greedy to gain max profits, having bought options for all money. Don't fear the bet and be overconfident in your forecast. Emotions never lead to extra money, but often can make you suffer losses - experience of thousands of wasted deposit shows.
- If you've lost your money or you bet hasn't worked well, don't blame anybody except yourself. It's not broker's fault of your wrong forecast, and not strategy's that you haven't followed the algorithm. Even if you faced the scam, it's your fault, but not cheaters. It's essential for any successful trader to distinguish fair companies from scams. And meeting another fail, don't swear at forums or complain to friends, but get mistakes corrected, improve yourself so as not to fail again.
- Trading with options, the main thing is to stop on time. If you have 5 winning bets in a row, it doesn't mean the sixth will be so. Happiness is also an emotion, rarely leading to success, because it creates overconfidence. Always estimate risks and stop on time, otherwise you can earn 100% profit with 5 bets, and lose everything with the sixth.
- Don't listen to experts and other traders, telling you at forums when to buy assets, when to sell them. Actually, successful traders don't share their knowledge. At least, for free. If one yells you must sell some stocks, they are probably an ever-speaking idiot, decided to share the opinion which is not always right and can confuse. Because, when preparing to trade, you've created a strategy, repeatedly tested. And then, you should use only this one, and if you need enormous or just bigger profits, adjust your system, and don't try to earn by others' efforts. There are many traders that listen an expert and then lose all their money.
- And the last tip - never give up. Having lost big money, find another system, but don't leave it all if you want to do option trading in future. Novices often make mistakes, sometimes very stupid ones, but then nevertheless become experienced and successful traders. Don't want to lose your money - open a demo-account and waste virtual deposits without any stress. The one thing you'll lose this way is your time. But you'll probably become a successful trader.
So, option trading means great perspective, but great risks also exist. For maximum usefulness of this tool and avoiding scams, follow tips described above. They won't give 100% success guarantee, but will let you become a really good trader. All rest is up to you.