How to lose properly and become a profitable options trader
Nowadays options trading is very much popular in the financial world. Most of the traders consider the options market as the best money making a market in the financial world. They think that they will get right over the night by trading the options market with reliable trading strategy. But when it comes to real life trading things change dramatically. Most of the options trader fails to make money in options trading since they can’t embrace their losing trades in the market. But if you truly want to become a profitable options trader in the financial world then you need to embrace the losses in the market. Those who are trading the options market for a long period of time and making huge amount of money also incur losses in options trading. But they always make sure that their losing trades are way smaller than their winners in the market. As a professional options trader, you should consider trading as your business. And if you incur any loss then you should happily accept it since losing is just a part of the financial market. Consider losing trades as you the capital cost for running the business. In order to trade the market with the great level of consistency, you need to embrace your losing order just like you embrace the winners in the market. In this article, we will discuss how we can embrace the losing trades in the market and trade with strict trading discipline.
Never expect winning trades in the market: Most of the novice traders in forex options trading always think about their potential profit in the market. Before they execute any trade in the market they always calculate their potential gain in the market and they set their mind that they have opened a winning trade in the market. But if you do so then you will be under extreme pressure if a single trade goes against you. You should always consider the losing amount in the market. Before you take any trades in the market make sure that you never think about your potential gain in the market. Always prepared for the worst case scenario and execute you trade with proper risk reward ratio. Don’t take any excessive risk in the market in order to make a huge profit in the market. And never expected the unexpected from the market. Always expect the rational output from a certain trade in the market.
Read books on psychology: Most of the retail options traders fails to make money because they trade with their emotions in the market. But if you trade the market with your emotions then you will never become successful options trader. As a professional options trader, you need to execute your trade in the market based on rational logic and you should also consider the potential risk-reward ratio in it. If your trade with emotion then you will always lose in the market and take a huge risk to recover your losses. And most importantly you will never accept those losses in the market. So, make sure that you read books on trading psychology. You might be wondering that reading books on psychology will not help in the forex market but when it comes to real life trading you will see that the lessons in the book are helping you a lot to embrace the losses in the market. And you will also take high-quality trades in the market since most of the time your will be able to control your emotions. Most of the professional options traders focus on their trading psychology more than their trading strategy in the market
Real statistics: As a full-time options trader you should assess the success rate of the traders in the options trading industry. Most of the retail traders focus on their trading method and discipline but they never assess the trading history of the successful options traders. If go through the trading journals of the professional options traders then you will be surprised to see that most of the expert option traders are losing more money in the market rather than gaining. The expert option traders always make sure that their potential winners are bigger than their losers. They simply use the concept of the money management in their trading. If you trade the market with proper risk management factors then you will be able to lose more trades in the market and make money. Even the most elite option traders have some losing months in a year but they always make sure that they remain profitable at the end of the year. Every single successful options trader know the importance of embracing the loss in the market.TO be precise most of them still, make a huge amount of even having a few number of winning trades in the market.
Summary: The popularity of options trading is increasing every single day. Many people have achieved financial freedom by trading the options market. As a full-time professional trader, you will always have some losing trades in the market. But in order to remain profitable in the options trading world, you need to learn how to lose properly in the market. If you don’t know how to lose properly then there is a high chance that in a single trade you will blow up your entire trading account. Always make sure that you trade the market with proper risk management factors. If you are relatively new in this industry then never risk more than 1 percent of your trading capital unless you learn the art of losing.