Trading options is becoming popular as you can earn money on it within minutes, limit losses to a small maximum and short stocks when you think they are going to dip in value.
Okay – so maybe the title is exaggerating a bit. You are not going to become a millionaire overnight with options, but they can be a great addition to your portfolio and a way to increase returns.
I assume that you already know what options are, if not, i highly recommend this article by The Investment Counsellor.
In this article we are going to highlight 5 tendencies of a successful options trader to inspire, educate and motivate you.
5 Qualities Of a Successful Options Trader
- Be Disciplined
Doing thorough research, understanding when an opportunity arises, set up and agree to the right terms, stick to your strategy and goals, and have an exit strategy is all extremely important.
2. Have a Trading Style
As you slowly get better and better at trading you should formulate a specific trading style that suits your personality and goals.
3. Plan Your Trades
Act on analyzes and plans, and not on instinct and emotions. That is key.
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Related Article: Option Investing Explained
4. Have Patience
It is crucial that you have patience and wait for the market to create an opportunity for you, instead of trying to make trades on every single market movement. Pro traders sit leaned back and follow the market until the right situation arises, amateurs jump in and out of trades constantly because they have no plan and no patience.
5. Interpret and Understand The News
It is important that you interpret the news. Separate hype from reality, and fake news from real news.