If you trade options part time or full time, and you don't have at least a basic understanding of technical analysis, you're probably missing out on a lot of very profitable trades. The fact is that understanding technical analysis can help you to take a lot of the guess work out of your options trading, meaning you'll have a chance to become a much more profitable trader.
It is very hard to argue which way the trend is heading if a bar chart is making a series of higher tops and bottoms. Positioning yourself with puts and calls during a trend is like getting carried up an escalator - all you are doing is going with the flow.
But if you are ignoring the trend, and your options trading system is giving you trades that fight the market, it makes it harder to make money consistently. Riding a trend can also give you places to enter additional positions as the price of the underlying security goes up or down. That means you can compound your profits with lower risk than if you ignore what the market is doing. As the old timers always say - the trend is your friend, so you should be going with it.
So does a system that incorporates technical analysis give you profitable trades every time? Of course not. The fact is that as a trader, you are going to lose on a percentage of your trades because we never know for sure what the market is going to throw at us. But using technical analysis can highlight potential trade opportunities for us, and we can then make decisions based on our trading plan.
The beauty of options is that we can always roll out, up or down as required, so if we get the trend wrong, we can adjust the strategy to suit the market. Compare that to a horse race, where once the race has started, you're stuck with your decision and there's no way you can modify the position - you just have to live with the outcome.
So what are your choices if you'd like to trade options, but you're not that confident about your technical analysis or trading ability? An easy way to remove most of the learning curve and become a profitable trader is to use a system that's been developed by a successful trader, and just copy their trades.
It really makes sense for new traders to let somebody else spend the vast amount if time and money it takes to learn an options trading system that actually works and makes money. That way all you have to do is take the trades as they are called, and enter the positions to get on board.
It is very hard to argue which way the trend is heading if a bar chart is making a series of higher tops and bottoms. Positioning yourself with puts and calls during a trend is like getting carried up an escalator - all you are doing is going with the flow.
But if you are ignoring the trend, and your options trading system is giving you trades that fight the market, it makes it harder to make money consistently. Riding a trend can also give you places to enter additional positions as the price of the underlying security goes up or down. That means you can compound your profits with lower risk than if you ignore what the market is doing. As the old timers always say - the trend is your friend, so you should be going with it.
So does a system that incorporates technical analysis give you profitable trades every time? Of course not. The fact is that as a trader, you are going to lose on a percentage of your trades because we never know for sure what the market is going to throw at us. But using technical analysis can highlight potential trade opportunities for us, and we can then make decisions based on our trading plan.
The beauty of options is that we can always roll out, up or down as required, so if we get the trend wrong, we can adjust the strategy to suit the market. Compare that to a horse race, where once the race has started, you're stuck with your decision and there's no way you can modify the position - you just have to live with the outcome.
So what are your choices if you'd like to trade options, but you're not that confident about your technical analysis or trading ability? An easy way to remove most of the learning curve and become a profitable trader is to use a system that's been developed by a successful trader, and just copy their trades.
It really makes sense for new traders to let somebody else spend the vast amount if time and money it takes to learn an options trading system that actually works and makes money. That way all you have to do is take the trades as they are called, and enter the positions to get on board.
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To learn how to trade profitably without wasting a fortune on useless options trading systems, visit options trading experts. Then read this trading article on how to choose an options trading system.
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