High Profits - Low Risk
With stock options, purchasing call or put options has limited risk. In other words,
you'll never receive a margin call and you cannot lose more than you invested.
No matter what tools and methods you use, there will be plenty of lessons to learn along the way.
Here are some things to keep in mind:
*Always wait for the best setups. When you see them, take advantage of them. If you don’t see them,
don’t force them. Jimmy Rogers, a very wealthy, very successful trader and fund manager says “I just
wait until there is money lying in the corner, and all I have to do is go over there and pick it up.”
Be patient. Wait for the best setups.
*Don’t mix up your time frames. If your trade is based on a daily setup, don’t pay too much attention
to intraday charts. Intraday swings are more frequent and they can cause you to exit too early. Likewise,
if the trade is based on a weekly chart, don’t pay too much attention to the daily chart. As a wise
trader once said, “Too much attention to price fluctuation all but guarantees financial suicide.” We
need to define our plan for the trade and have the discipline to stick with it.
*Diversify. No matter how strong the trend is, it isn’t a good idea to put all your money in one market
or one sector
*Manage your money. Many of the top pros limit their risk to one or two percent of the account balance per trade.