Option Trading Success part 2
Hi there investors. I hope I find you doing well today, and that your portfolio is seeing consistent returns. This article on successful option trading is number two in a series of six. Each article is accompanied by a video, and I highly recommend you to watch them all.
Back testing is one of the greatest things that you can ever do as an options trader. Now this task can be rather tedious especially with the software that is offered on the current market. The most popular software out there is Optionvue and the other is Think or Swim, the latter being a brokerage. Now in both of these software packages it takes hours and hours of manual labor to produce back testing results. Recently, San Jose Options has released their new back testing tool called the Options Toolkit. With this software we can turn hours into seconds. If your time is valuable to you, then I would highly recommend this software over anything else on the market.
For example, it used to take me one hour to back test one year of trading a Condor in the Optionvue software. Using Thinkorswim it’s a little bit faster. Now, in comparison, to do the same job and actually gather more organized data, it takes about 2 seconds to back test one year in the Options Toolkit. It’s really phenomenal.
Experience is another key to finding success as an options trader. The reason is that the stock market changes constantly, and if you do not have years of experience, you will always be surprised by the next move. Having experience helps understand the market in a deeper way which is very important when it comes to making adjustments on your option trades. Experience traders also do not panic like to beginners do, and this can really make a big difference at the end of the year.
Trading with paper money is another great way to become a better options trader. Most option brokers on the market offer a paper trading account. I personally like what Thinkorswim has to offer. I find their software very robust for trading options, and their paper trading accounts uses the same software as the real account, so it’s a great way to learn. Obviously, it’s a good idea to make consistent returns in your paper trading account for several months before entering option trades with real money. As stated before experience is very important because the stock market changes rapidly and wears many faces.
Finally I would like to say that is very important to keep about 25% of your money in cash. This money will be used to make adjustments, to lock in profits and to put on key trades that will make a huge difference in your trading performance at the end of the year. It’s very risky to use up all of your trading capital, so remember to leave plenty of money free if you want to become a good options trader.
To Become Successful with Option Trading visit the San Jose Options Course at www.sjoptions.com
