I've made a lot of friends in my 12 year endeavor to achieve success on the stock market through trading options. I've met hundreds of option traders, and the truth is, only a handful of them were making money. I wonder why there are so many people investing in the stock market when most of them only lose their capital.
I find it fascinating. I've noticed that most traders are just looking for a good challenge. I know I do. I enjoy all the research, analyzing trades, looking at probabilities. To me working with options and the stock market are my playground. I love the challenge and that it always forces me to move forward. There's always room for improvement!
Option trading is a profession that involves a lot of creativity, so investors will tend to stick with it even if they don't find immediate success. There is a never ending amount of option strategies that can be conceived by an open mind. There are endless possibilities in the world of option trading.
But the question remains. Why are there so many option traders out there that do not make money? The common answer to this question is that your average option trader does not know how to properly adjust an option position. While this statement is somewhat true, I don't think it's actually the answer that we are looking for.
Recently I've come to realize the real problem. Option traders in general do not fail because of their adjustment strategies. In fact, most experienced option traders are excellent at money management and make very intelligent adjustments to their portfolios. The failure begins at the beginning of the trade. No matter how good of an option trader you are and risk manager, you will most likely never have long-term success trading options unless you learn to construct option trades that are low risk from the beginning. This is the key to becoming a successful option trader year after year.
I've realized all of this in my time studying with San Jose Options. I've learned to construct trades that are safer than anything I had ever seen before, and even though the trades are safer, the probability and returns are exceptional. So if you think you're are making all the right adjustments on your option trades, but you're still losing money, then most likely the problem is not in your adjustments. Your trades are set up to fail from the get-go. Good luck with your option trading, and once again, it's very nice to have met another trader along the way.
By Johnny M Junior