This article will discuss 3 Mistakes you must avoid while trading in options. Even I did these mistakes and now getting in shape by following my system and being a disciple. Now let’s get started.
As always we are having a lot of exceptions from the market and we want to earn more and have very good ROI for the capital we deploy. For example, you are trading with the capital of 1,00,000 and you want to make it double soon then this is never going to happen like that.
In the reality, you never be able to judge the bottom and highs of the market or any particular stock. The stock price movement and trading are based on probability and if you want to survive then you need to focus on Risk Management.
If you are new to the market keep the less exception return from the market so that you will be happy for the reward that the market gives in the longer run.
If you consider the big bulls and big traders then will work on 1% to 2% ROI in trading. The profits may look great because of the capital they are using. But as a beginner, you have to focus on the process rather than Higher ROI.
No, Patience doesn’t mean holding a stock for a longer time ( In terms of Trading ). For example, you will purchase a stock at the premium of 350Rs and at one time it will give more profit more than 2% which is your planned target. Now you will be more Patience to hold it to get bigger profit and as I experienced the stock premium will start to go down. Now you will be in a panic mood.
Yes, I also believe in riding the Profits and cut off the losses. But the best method to earn more is by trailing the stop loss and if you are new to the market then make sure to book 75% of the profit when the initial target is achieved.
Please define the profit target and stop-loss before starting any trade.
Yes, if you are new to options trading or to the stock market then you must gain some good knowledge and experience from a small capital.
If you are starting trading with a huge capital there are high possibilities that you are going to lose everything and blow up your account. Trust me, this will happened to many.
So initially learn and learn. Start with 25,000 to 50,000 to understand how the market works and how to deal with emotion. Don’t expect to get rich from this initial capital. Focus on learning rather than making Profits.
Alternatively, you go with Paper trading with a realistic approach. Do paper trading in the initial days then slowly get your capital and start trading.
Trust me. Identify one system and work on it like a robot. Keeping your emotions aside. I know it’s difficult but you can do it. Follow the system without doubting it much. Keep the stop loss and target defined. Always keep the process of learning with the proper disciple.
Stay focus and keep earning. Happy Trading.
Thank you for the time.