What To Do With Losing Options Trades


Manage episode 160442747 series 1063725
על ידי Joshua Belanger התגלה על ידי Player FM והקהילה שלנו - זכויות היוצרים שמורות למפרסם, לא ל-Player FM, והשמע מוזרם ישירות מהשרתים שלכם. הירשמו כדי לעקוב אחר עדכונים ב-Player FM, או הדביקו את כתובת העדכונים באפליקציות פודקאסט אחרות.
That is a question we've all had, and I receive several times a week. I remember asking myself this the first time after seeing the calls I bought the day before drop to a 90% loss on my first trade. It went to become a max loss that wiped out my small $2,000.00 account at the time. Forward to today after hundreds of thousands of trades, research and experience, I can confidently provide the right answer to you. That answer is, doing nothing is better than doing something. The reason why is because options allow you to know your max loss and exceptions before entering a position, which is why it's a better investing instrument than stock. Most people think they can control their risk after opening a position. That's not true because anything can happen, such as a flash crash. Stop losses are your enemy because people don't let their position play out or understand the probability getting stopped out before hitting their ideal profit target. The only way you can control risk is before entry. All options expire, so you have an idea of what the worst case scenario will be with a loss and in what time frame. It's more important to provide the position as much duration as possible to let the odds play out. If you prepare for the worst case scenario with position sizing, you're prepared and can just focus on putting new trades and managing winners. Even if you have a max loser, the market will clear the losing trades out. Being consistent is the key to long-term success and the more variables you need to decide on, the more inconsistent you will become. That is why keeping your position size small, focus on high probability outcomes, adding as many trades as market conditions allow for your approach, use a mix of undefined and defined risk trades, managing winning trades at 50% and letting losers be losers are the key to success. It's that simple! If you're still struggling to be consistent trading options and want a simple and easy weekly approach, this course here will help you. https://sizzle.samcart.com/products/WOTIS To your wealth, freedom and options! Joshua Belanger

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