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:
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.