Stock Options Trading Strategies and Day Trade for a Living: 2 books in 1: Understanding Stock Options Trading and its Strategies to Maximize Gaining and a Practical Guide to Day Trade and Options. by Benjamin Ray Tudor

Author:Benjamin, Ray Tudor [Benjamin, Ray Tudor]
Language: eng
Format: epub, pdf
Published: 2020-09-25T00:00:00+00:00

Creating cause and effects relationships

Attempting to avoid pain while seeking out pleasure

Depending on your trading style, prioritizing stability can either be a useful tool or one you will want to work to change. If you have a low tolerance for risk, then you will want to go with the flow and seek out stable trades when the market is in flux. However, if you prefer higher risks and greater rewards then you will want to be aware of this instinct so that you can more easily ignore it.

When it comes to looking for cause and effect relationships, it is important to keep in mind that the relationships your mind points out might not necessarily be based on anything tangible. Whenever you come across an apparent relationship it is important to do your homework and make sure that it exists before making trades based on what you have found.

When it comes to avoiding pain and seeking out pleasure, it is important to attempt to change this strategy as soon as possible. There is no possibility for profit without risk and your brain will likely associate risk with pain, at least at first. Regardless, understanding why you may feel uneasy about a given trade, even after doing the necessary research will make it easier for you to push forward, eventually rewiring your neural pathways in the process.

Be consistent: Before you ever make any trade, you are going to want to have a clear idea of the strengths and weaknesses of the various stocks in question as well as the best point to enter into a trade and at what point you are going to want to exit the trade if things go poorly, and also where you will exit if things ultimately go as well as you could expect. Once you have made a plan it is important to stick with it even if your emotions are making a compelling argument for going in another direction instead. It is important to always trust in your plan as it was made during a period when you were thinking as rationally as possible, giving in to your emotions at this point is akin to gambling with your investments.

When you come across moments where the options you have purchased are doing extremely well, it can be natural to want to stay in longer than you originally planned. However, this will generally prove to be a losing battle in the long run as chasing the last few pennies of potential profit is rarely going to net you enough extra to balance out the times that you stay all in and take a hit to your investment accordingly. In these cases, the best course of action is to start the process instead of over again.

Keep the mood of the market in mind at all times: Fundamental and technical analysis are all well and good, but they will only take you so far before you run into instances where the market seems to balk at the logical choice and move off in an unexpected direction.

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