Wayne Gretzky was arguably the greatest ice hockey player ever. He also had a silver tongue. To make money trading options, follow his advice about winning. Just like winning at sports, winning at trading is all about psychology and execution.
To make money trading options, follow this advice
“A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”
A trader needs to understand what is happening in real time but also what may happen down the road. We’re not talking months or years here – that is what an investor needs to focus on. Options traders have a shorter timeline – days and maybe weeks. You need to capitalize on short term movements and look for money flow that is so powerful a trade can literally double or triple within days.
I do not recommend taking big risks constantly. However, when the opportunities for robust gains present themselves, take a calculated risk.
“You miss 100% of the shots you don’t take.”
Some have defined trading in this market as irrational, irresponsible and reckless. These descriptions are often from people sitting on the sidelines and/or not playing in the same sandbox as short-term traders.
Like I said above, you need to take risks and follow the money. If you’re paying attention to the markets on a daily basis, you will see opportunities arise. Some names that have been promoted by Wallstreetbets on Reddit (and other blogs/boards) are getting our attention. I had never heard of Clover Health (CLOV) or ContextLogic (WISH) before last week, but those stocks roared higher on very strong turnover. Just be aware that big moves might only last a couple of days, if not hours.
When it comes to making money as an options trader, it’s imperative that you know your limitations. Always practice disciplined risk management. A few big wins here and there could make a huge difference in your overall performance.
