Steps to Successful Option Trading
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Before we go through our discussions today, I am hoping that you are starting to see your stocks moving up. This document is the second of a six-part article with video tutorial complementing each part. If you wish to learn the promising business of trade options, then I suggest you watch all of the videos. A very important step in learning to trade options is to spend a lot of time back testing your trades. There are just a few option software programs on the market at this time that can help you with this task, but learning to trade without costing you a dime is worth your time. I learned a lot by using Optionvue and/or Think or Swim to back test my option trades. These two software bundles have been very good, but now San Jose Options has just released a new type of back testing tool called the "Options Toolkit." With this back tester you will save a lot of time in comparison to any other options testing software. Option Trading : Steps to Success To back test a year-long of trading a Condor will take an hour using Optionvue. With Think or Swim, the test will somehow finish just a little faster. But with the Options Toolkit, getting the job of back testing one year of trading done will only take an amazing period of 2 seconds! Not only will the Options Toolkit give you 2 seconds of back testing, it can provide you with more and better organized data than any other software programs can. Now, another important factor to attain trading success is learning by experience. After trading for a number of years, an options trader will develop precious experience in the business. The market has a lot of personalities, and it takes but experience to fully understand the movements of an ever incessantly changing market. Another important key in learning how to trade options is through paper trading. The way is simple: open an account, get on any options broker and begin practicing using a free paper trading account. It is not too easy though. It needs time and effort from your part. At least six months to one year in paper trading will be fine in most cases if you are thoroughly dedicated. Well, everything has its price and with paper trading, you will develop experience without the risk of squandering your actual trading capital. Finally, you must not lay everything you have in your trading account on the table. You should leave at least 25 percent of your capital in cash. The best option strategies require some necessary adjustments, and you must have the extra pocket to accomplish them. One of the secret behind successful options trading is to leave plenty of money in cash for you to be able to keep your portfolio afloat, to lock in profits, and to carry out trading adjustments.