Yet another stockbroker

This definitely is the roomer out there. I look at it this way. Trading of any sort can be dangerous if you don’t know what you’re doing. I recommend that if you’re going to trade options to sink some serious time and study into it before you invest any of your hard earned money. I would say that most successful traders don’t begin to consider themselves profitable until at least a year or two into their education. And these folks didn’t just sign out some books at the library. They likely had a personal coach or mentor or paid for formal education…for example, I recently completed my PhD level of trading through a company called Investools.

Then, a successful trader will study, conduct research on-line reading articles and even blogs like this one. Someone serious about trading is probably always carrying around a good book and the beginner will be trading with a paper trading account. Some brokers have a tool on their web site where you can trade just like it’s real but use fake money so to speak. That would be a paper trading account. For example you can open up a fake $100,000.00 account and trade away. You’ll soon see whether or not your skills will keep you in the green.

I would say that once you begin to make a few profits or even break even over a period of time that it’s ok to throw some real bucks into the hat of a real brokerage account.

Finally, the successful trader will be very disciplined in the area of money management. For example, this $100,000.00 you have, you would never risk more than 5% of your account on any one trade. In fact, I think most traders keep this down to 1-2% risked on any one trade. This keeps you from wiping out your account in a short period of time. If you begin to lose too quickly in your real account you can take a break and go back to the paper account for a while.

If you have any specific questions about the dangers of trading options feel free to send me an email and I’ll do the best I can to get you headed in the right direction.

One final note about the danger. Life is full of people who point out the danger or negative in life. It’s usually the people who go for it that become significant and the others just keep talking about it. So with that said I encourage you to go for it. Just move slow and smart. If you believe in yourself you’ll eventually come out on top. Keep getting your advice from those who believe in you and stay away from the negative finders.

Best wishes.

Rich Strehl is a self made success story who jumped in feet first into stock market education. A year and a half ago he did not even know what the Dow Jones Industrial Average was. Today he trades full time in the market. Strehl claims most of his success comes from a positive attitude, persistence and a solid goals program. A belief in oneself is paramount in succeeding in life. Believe in yourself and you can do anything you can vision… journey without this key ingredient and you simply self yourself short.

Technorati Tags: options trading, online trading, stock options, stock brokers

After getting into the market with stock trading, online traders tend to look for the next challenge. Options are definitely a challenge as much for the amateur investor as the seasoned broker. Since options demand rapid response, online trading access is the way to open this money making opportunity to anyone with the cash and nerve to play.

Options have the reputation for high risk. No question that reputation is earned. The flip side is that hitting an option at the right time yields a fat payday. The lure of big bucks might be appealing to novice investors but it’s a strategy for experienced traders. Even veteran stockbrokers can get caught on the wrong side of a trade and lose millions in minutes with options trading.

Enough gloom, let’s look at the upside of online stock option trading. Traders can limit the financial risk while keeping control over a block of stock. The difference is that options are perishable. Think of stocks as the baked potato and options as the butter melting on the hot potato. The stock will be around a long time but an option has an expiration date. If the option is set to expire on Friday, then the trader must be prepared to deal with that timeline.

Online stock option trading follows the same rules as any options trading. If your option expires “in the money” then you can choose to purchase the stock or redeem the option for a stated value. But if your option ends up “out of the money”, then you lose your investment. It’s an all or nothing play.

The winners in online stock option trading make their money by educated guessing. They prepare for this high stakes contest by learning the fundamentals of puts and calls options. With more experience, online option traders move into more complex strategies using strike prices and straddles. Some traders vary the strategy used while others find their comfort strategy and stay there. While a stock trader is looking for upward or downward movement, the options trader needs to pinpoint the degree of movement. Using the complex strategies does not necessarily result in better gains than with basic puts and calls. Again, online stock option trading is a game of skill and moxie regardless how it’s played.

Online stock option trading can be used to reduce risk and minimize losses. Regardless of whether the stock market is going up or down, stock options can still be winners. Some traders may move between trading stocks to options trading based on what is the best opportunity for the current market condition. Online stock option trading makes it possible to combine the options trade with the stock trade in a strategy that either goes for maximum profits or protection of the stock value.

Online stock traders owe it to themselves to explore the potential for options trading. Using the same research and background information, traders can use online stock option trading to boost profits and add an element of excitement to the process.

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Technorati Tags: online trading, stock options, stock trading, options trading, stock market