Saturday, 28 January 2012

6 Golden Rules For Option Trading

6 Golden Rules For Option (call put) Trading

1. Clear Vision Of Target

We must always remember that reward and risk go hand-in-hand in trading and that we cannot expect to achieve high returns without planning for high risk (i.e. draw-downs). Your objectives and goals will be very specific to you, but they must have the following characteristics to be useful:

Be measurable
Be achievable
Be worthwhile
Be positive  
2. Discipline
This is most important part of option trading. In order to realize the full potential of your trading systems it is critical that you take every trading entry, adjust every stop, and close out every trade as and when your system says you should do

3. Never add to a losing trade

Averaging is Options could prove to be very dangerous as there is always time factor.

4. Don’t take too much risk

Risk associated in every Option call should be very low and well calculated before entering any trade.

5. Minimize all trading business costs

You should select your broker carefully and should be aware of all the cost associated with each trade.
6. Be well educated
Keep a track of borad meetings ,any possible major event in market Etc because they create huge effect on Option pricing

6 comments:

  1. very well said. These tips on option trading are really amazing. I appreciate it for sharing them.

    ReplyDelete
  2. Very very useful information. I think this is a top article for everyone here around in the options market. It’s very nice to read this article.

    ReplyDelete
  3. It’s very nice to read this article. This is extremely helpful for me and hope for every one too. in indian stock market, nifty futures and nifty options

    ReplyDelete
  4. thanks inraju,kalahash and chakra for reading our golden rules for option trading

    ReplyDelete
  5. gr8 blog,amazing article Your post is important; the matter is something that not many people are talking intelligently about. Welcome given more practicle option calls

    ReplyDelete
  6. excellent post, very informative. I'm wondering why the other specialists of this sector do not realize this. You should continue your writing. I'm sure,
    you've a great readers' base already!
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    ReplyDelete