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Trading
Options
Developing a Plan
by Fred Strickland
Trading
options is the most potentially profitable business that
exists in the financial markets today. But success in
trading options can be elusive. Many would-be traders
attempt this business without a proper understanding of
it, but more importantly, without a "business
plan," or specifically, a trading plan.
I
personally think that trading options is the world’s
perfect business, but to be successful at it, one needs
to address it as a business. Learn the profession, and
utilize a trading plan. The rewards can be great. I get
to work from my home, play on my computer, watch TV,
surf the web, and usually make more money in a week than
most people make in a month. My commute to my office
takes a total of 30 seconds, and I have no one telling
me what to do or when to do it.
Incredible
amounts of money can be made trading options. Great
fortunes have been made with these strange derivatives
we call "puts" and "calls". To the
unenlightened they seem almost mysterious and extremely
confusing. But they are confusing only because you
haven't taken a little time to get to know them. To
understand the mechanics of options and their great flexibility
only requires a modest effort. They're really quite
simple to understand once you make the commitment.
I’ve
taught hundreds of people to trade options.
Many of them have literally turned a few thousand
dollars into hundreds of thousands, and in some cases,
more than that.
I
personally grew an options account of $70,000 to over a
million dollars in just 11 months. Is it easy? No way.
Can it be done? Absolutely.
I
am not implying that you're likely to make a
quick-and-easy million bucks. On the contrary, trading
options is as tough as anything out there and it is not
easy. But there’s no denying that huge profits can be
made.
I'm going to go out on a limb here and go against
all the talking heads on TV who say that you should stay away from
options. Bull. I say they are wrong. I say that any
trader who has the ambition to learn and wants to increase his
profits should take a look at options. They are
extremely flexible and can be used in both aggressive
and conservative trades.
Of
course the aggressive trading should be done with a
limited amount of one's capital. It should be with money
that, if lost, won't significantly change his standard of living.
It should be "risk-money." There are risks in options and every trader must
understand that.
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