NEW YORK, NY / ACCESSWIRE / January 21, 2021 / Option trading can be a scary skill set when first glanced at. You don't know if the market is going to go up or down at any given moment. Everybody has their own boundaries and rules they use, but we had the pleasure of acquiring 3 tips for new options traders from a industry leading option trader named Gus Vera. Gus said: " As soon as I implemented these 3 tips into my routine, my grasp on the market was a lot stronger."
#1 - Risk Management
Risk management is very important for all types of trading, not just one specific type like forex, for example. At the end of the day, risk management helps traders cut down losses. It can also help protect an options trader's account from losing some if not all of their money. It is an essential but often something that many options traders fail to acknowledge. After all, an options trader who has amassed a small fortune can just as easily lose it all in one or two bad trades because he or she hasn't performed proper risk management. One such risk management protocol that everyone should be adhering to, even if they are new or experienced, is to set stop losses. Stop losses act as safety nets for options traders, as it stops you from losing more money than you intended. Stop losses are usually thought of as a way to prevent losses, but they are also a way to make sure you lock in profits too. In some cases, stop losses are referred to as trailing stops. Trailing stops are set at a percentage level below the current market price. Then the price of the stop loss adjusts as the current market price fluctuates. Another common mistake made by option traders when it comes to risk management is position sizing. Selecting the right position size that you take a trade is important as the right size will protect your account but also maximize profits.
#2 - Setting Chart Times
One tip that I always like to give out to new options traders how to set chart times to avoid over-trading. One of the many pitfalls that new and inexperienced options traders fall into is that they tend to be overcome with emotions, which in turn leads them to overtrade. Overtrade is a recipe for disaster because you will eventually start chasing trades and move away from trading your strategy, and sooner rather than later, you will find your account has reached $0. Chart times is one of those grey areas where one time isn't superior or inferior to others, but it's all about what you're comfortable with, however, there are some timeframes like the 4H, Daily, Weekly that suit some options traders. Whereas there are others that prefer timeframes like 1M, 5M, 10M. It's all about preference. For the options traders who trade on the lower time settings, you will experience relatively fast-moving markets because things are moving minute by minute, or every 2 minutes, or every 5 minutes. This is a lot of data to process in such a short space of time and can often lead to overtrading because you are seeing so many opportunities that are afraid you'll miss out on.
#3 - Set Targeted Goals
Set targeted goals! You'll notice that I have written the previous statement in bold because I cannot stress how important it is for options traders to set targeted goals. Setting goals helps you keep in line and prevents you from steering off your plan or strategy. Goals are there to guide you and are measurements of your success. Trading without goals can lead to over trading, and we all know the pitfalls of that slippery slope. An example of setting targeted goals is Person A acknowledging that they are going to trade until they make $50, and once that profit has been reached, they are done for the day. It's all about small, consistent daily gains that help make options traders successful. They set goals, and they stick to them religiously and avoid falling into emotional traps that make them over trade or trading more than they should.
Gus has a wealth of knowledge when it comes to options trading. He helps novice and experienced traders hone their skills to be able to spot the right opportunities, opportunities that other people wouldn't be able to spot. His wealth of knowledge also extends to helping options traders learn how the market moves so they can properly navigate their way around it and know when to stay out of the market in order to reserve capital. All in all, Gus has helped a plethora of options traders discover their hidden potential and assisted with building their confidence, and he can help you too!
If you have any questions or want to learn more about Option Trading, you can contact Gus via Instagram @Thewallstreetgoat
SOURCE: BrandBerry Unlimited.com
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