Options Trading: Mastering the Basics is Never All That Easy
No matter how many years you trade options, you have to continuously re-focus yourself, remember your rules of trading, risk standards, and much more.
The world of options is not one in which you get the fundamentals once and then move forward. You have to revisit the fundamentals all of the time and they are easy to overlook.
To me, the keys to successful options trading are:
1. Remember why you're trading - are you reducing risk or speculating?
2. You have to set rules (the easy part) and then follow them (the hard part).
3. You need to understand risk to succeed in your trades.
4. You have to decide what kinds of risk are appropriate for you, and then use those definitions to limit how you trade.
It all sounds pretty basic, but even experienced traders lose money when they forget to enforce their own rules and to trade based on these guideline. http://www.youtube.com/watch?v=45o3nHg2EJo
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