Based on the experience & opinions of Expert traders, Here’s a list of 8 Important things you should definitely know about if you are trading in Options & Stocks. This will help you build a better Options trading strategy & more :
1). Invest & Stay Invested!
It is easier to enter the trading market than to stay in it. Because when entering the market, you are in lieu of Profit & making lots of money & that drives you.
Once you actually enter the market and Invest some capital, that’s where the game begins. Imagine not having the desired results. Things are not going to your plan.
There lies the key, this is the point. Don’t push the Trigger and Exit the trade/market all of a sudden. Stick to the plan & look at the Bigger picture.
So always remember to stay Invested and Don’t pull out all your Investment all of a Sudden due to some market Fluctuations.
2). Trading Strategy Should Be Your Holy Book
This especially applies to Options trading. Having an options trading strategy is of paramount importance & equally beneficial as well.
Follow this 5 step process :
Research & Select the right asset,
Pick Trading Platform,
Build your Trading Strategy based on it,
Backtest the Strategy,
Improvise Strategy & Deploy
Why Trading Strategy Is So Important?
Having a robust trading strategy protects you during sudden market fluctuations & helps you see through difficult times. During fluctuations, almost no one would know which way the market will go. The majority will be making assumptions & it can seriously Backfire.
But if you are having a Proper strategy, It will smoothly steer your portfolio through uncertain times. A strategic approach will help you secure handsome profits due to purchases made during fluctuating times. When most investors would panic selling, It will become your gateway to Profitable trade.
3). Use Technology To Your Advantage
This is the 21st century. We are living in the most advanced technological era of human history. Take that to your advantage.
More & more innovative advanced technologies are being rolled out for better trading and investment practices.
Most recently, Artificial Intelligence & Machine learning-based Algo trading has been seriously revolutionizing trading. It takes an algorithmic approach to make trade decisions, suggestions & Trade executions.
Analyses historical data of the market in Seconds and Guides the Trader to make a stronger decision that is Lot likely to benefit him/her. Very easily accessible through the automated trading app & very very easy to use.
4). Emotions & Impulsive Trading: Worst Case
We are humans and We have emotions, that’s understandable. But to be successful at any sort of Trading, You gotta get over it. It’s for your benefit only. Having strong emotional control can take you places.
Changing market situations and dynamics will test you like nothing else. You just entered the market & Bamm it went down 20%. You were just about to secure 15% profit & Before you close, the Market crashed big.
These & a lot of other scenarios can happen anytime in the market. Being better prepared will only Benefit. Imagine selling when the market crashed 20% & then seeing it recover 30% in a span of a month or two. No worse feeling than that !!
That’s why Emotions and Impulse control are very important. It will not only protect your money from Big losses but also help you make a profit.
5). History DOES NOT Repeat Everytime!
It is okay to study the History of a particular stock or asset or the market in general. But, making decisions completely on that basis could be dangerous.
Pick a Good options trading app or Algo trading app, It will show you something from the History of a particular stock or asset. But it will not guide you to make decisions solely on that basis.
There are plenty of other market indicators as well. They are data-backed, High-tech implementation-based indicators. It can guide you to much more clarity compared to purely historical data.
6). Market is Ever-Evolving
The stock market is being inscribed by multiple factors that are helping it evolve to new Heights. Lakhs of new investors come into the market every year, New trading options & New methodologies, and Options of trading come out every few months.
Also, the various factors (Political, socio-economical, geographical, etc.) affecting the market movements play their part along the way. Every few months, the market movement would be affected by one reason or the other that is Never seen before in History.
So it would be very mindful to consider that you might encounter completely new things during your trading journey. Keep your mind open to the small challenges that might come along the way.
Learn more about them through Experience & keep getting better at using them to your advantage. As the cliche goes: Challenges always bring Opportunities.
7). Personal Wealth Protection
Investing in stocks and options is always a Long term game. Short terms only exist in fantasies & fiction. Consider whatever capital you invest into the market, as Locked in a closet. A closet that will remain locked for a few years.
It is advisable to not put money into investments that might be needed for any sort of personal emergency. Emergency money withdrawal can bring about Big booming Losses. Even more than the worst market crashes.
So always keep your personal funds & investment funds separate for a Better safe Trade journey.
8). Use Trends To Your Advantage
Not all trends are bad. Though experts recommended always Deep-check before buying into any trends. But some of the Trends are Genuinely good and are a Candy of profit looming around.
Pick a good Algo trading or Options trading app such as SpeedBot. It has a dedicated section for “Trends”. Check if they fit your Options trading strategy and make the decision based on that.
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