Here are 9 actionable steps you can start TODAY to improve your options trading.
1. Learn and Master Options Trading Fundamentals
It is imperative that you understand the basics of options before you venture out and learn intermediate to advanced option trades. It’s the order in life. It’s the reason why we learn how to do basic math and subtraction before we go into division and multiplication.
You need to know everything about “puts” and “calls” — from how they work and when it’s best to use them. This also includes knowing everything related to them like expiration dates to where they are found on basic option tables. Skimming over the basics to get into more advanced trading is simply gambling.
2. Read Books on Options Trading
Technically, they don’t have to be all about options trading since there is overlap in every investment book. The goal is to learn different approaches to trading the market. You’ll learn about things you have not known about before and you’ll even be able to refine your original trading strategy. 대여계좌
One great takeaway from reading books is that you can also learn more about the hidden trading factors you don’t see everyday like investor psychology or market psychology. Did you know that these psychologies are the reason why technical analysis exist?
3. Streamline Your Technical Analysis
If you are looking at 6+ more technical indicators and use multiple technical analyses concepts against other technical analyses concepts, then you’re probably doing yourself a disservice.
Simply learn and use the basics like MACD, support/resistance, trending channels, divergence/convergence, and moving averages.
4. Continue to Paper Trade
Just because you are trading real money it doesn’t mean you need to stop learning and trying out different strategies. You have to continue playing the market from all angles. If you are a market conformist (you tend to go with the trend), you can try a contrarian strategy. If you usually close out credit spreads, try keeping one open while legging in an OTM put option.
Experiment and continue to tweak out your strategy
One great tip is to create 2 identical trades. One in your regular account and the other in your paper trading account at the same time. Then you can make experimental adjustments to your paper account over time and see how it fairs against the live account. This is a nifty way you can test different strategies while having a baseline.