When I first started investing and options trading, I was so excited by everything like all the different strategies you could trade. I bought heaps book off Amazon on every topic available to do with the stock market, options trading or investing. You name it, and I probably have it! There is just so much information out there it really does take years for beginners to learn most of it.

If you’re starting out and finding it hard to find the time to learn everything, just try to focus on those things that will make a difference to your trading today. One thing I did when I was starting out was sign up for all these different newsletter, email services, and various trading tutorials. But pretty soon I was suffering from information overload and was getting disheartened. I kept thinking to myself “There’s just so much to learn and I don’t have the time”.

If you find yourself in this situation, try the time management technique of simply focusing on the things that will make a difference to you right now. Any time an email arrives in your inbox, think to yourself, does this apply to me today? Will this help improve my trading today? If it does, great, go through it in detail, but if not simply file it away to read in the future. If your trading plan is to trade covered calls, learn everything you can about this strategy before moving on. Sure, information about stochastics, moving average convergence divergence, volatility trading, delta neutral trading, iron condors etc. might be interesting, but if it’s not going to make a big difference to your trading today, file it away to read later when you have more time and when it will actually make a difference to your trading.

I hope you found this useful, I’ve been applying this to my options trading and also other walks of life over the last few weeks and I’ve found it has made a huge difference to my productivity levels.

The only consistent notion about stocks is that they are inconsistent. Investors that make decisions based entirely on emotional ‘gut feelings’ or make decisions based on desperation will only do about as well as they will at the casino. Planned, precise, and well thought out decisions make for strong trades. Online stock trading need not be a random roll of the dice.

Regardless of any pre-planned strategy with which an investor approaches the online trading world, there are two basic facets of any strategy. All trading is based on maximizing the profits while minimizing the risks. These two factors also tend to cancel each other out. The greatest risks usually turn the greatest profits while the smallest risks typically turn tiny but long term profits. This means that an individual investor needs to find their individual risk tolerance while building their strategy.

There will be losses. There’s no strategy in the world that can guarantee online stock trading without loss. Loss is part of the game no matter how serious the player. The most successful online stock traders in the world have one basic rule implemented into their trading strategy. They all have their stock portfolio divided into percentages. They have a predetermined percentage seeking high risk / high return stocks, a predetermined percentage seeking medium risk / medium return stocks, and a predetermined percentage seeking low risk / low return stocks. The predetermined percentages vary from investor to investor and some have the bulk of their percentages in low risk while others have the bulk in medium risk. Placing the bulk of the available funds in high risk stocks is a sign of either gambling or desperation, neither of which can be considered a very sound strategy.

The reason that these percentages are predetermined for the vast majority of successful online investors is to help maintain unemotional investing. If there is a set proportion of the available funds doing predetermined job, then the emotional highs and lows will not deflect the investor from their pre-determined strategy. Online stock trading can become emotional, and without discipline traders start making bad decisions based on their emotions. Keeping the emotion-led trading to a minimum is very difficult for many online traders, but it is a discipline that must be acquired.

Every individual investor’s strategy will vary to suit their needs, their risk tolerance, and their individual style. However, having a basic strategy before the account is even opened is a vital key to online stock trading. Investors without a strategy tend to lose more often than they succeed. Every individual investor’s emotional strings are different, and some will need firmer, more complicated rules before setting off into the online investment world. Others will do fine with a basic outline. While learning the ropes, it is best to dabble with small sums of money rather than place large chunks of money into any stock, no matter how good it seems. One of the most significant pros to online stock trading is the investor’s ability to go through the motions on paper without ever spending a dime while they keep an eye on the stocks they believe they are interested in. Over time, online stock trading can become a very healthy form of secondary or even primary income, but the investor has to start with a plan.

Bill Stewart is a work-at-home geek specialising in online options trading. For more information visit his website Online Trading Stock And Option

Options trading was popularized by Robert Kiyosaki, author of the cult-classic

‘Rich Dad, Poor Dad.’ He is known to repeatedly insist that options trading are

the investment of the rich, the ‘key to financial freedom’. Now with the choice

to trade online, what was once an exclusive process has transformed into an

inexpensive product easily available to all. Things have changed over time,

and you’ll find more and more experts explaining to you that since options

trading guarantees unprecedented leverage, you actually risk very little

money at the potential of making 10 times more money on the same stock,

rather than buying the actual stock!

Lower risk for making 10 times as much?! I couldn’t get my head around it,

because I’d been brought up with the belief that high gains always involved

high risk. And yet I started to hear about ‘trading psychology’; that online

options trading introduces radical methods of trading which shatters the

common misconceptions about the Stock Market being a high-risk venture.

Radical in the sense that instead of passive investment the approach becomes

one of pro-active investment. Strategies tested and proven time and time

again that it is possible to turn a losing trade into a profitable trade. Which is

why as far as online options trading is concerned, you at least need a

beginners guide to start you up.

If there is anything fundamentally valuable in Robert Kiyosaki’s unfailing

loyalty to stock options, it is his concept that dealing in stocks as long term

investments is a very expensive and perhaps even inefficient way of doing

business. This made me rethink a lot of my preconditioning of how people

used the stock market – usually to find a couple of very stable stock

investments they can safely bet on, then buy and leave them to grow slowly

(hopefully) through time. Basically as an alternative to banking.

One of the foremost reasons why professional traders focus on online options

trading is that they don’t have to stick around to watch a particular stock that

they’d pinned their hopes on fall miserably into the pits. Because usually, if

you actually invest in the stocks themselves, you’d be facing the loss, and have

no choice but to wait helplessly for the stocks to rise again. If you had invested

in stock-options however, you’ve paid less than 10% of the actual price of the

stock, can cut your losses and move on to your next investment.

What the very idea of online options trading stands to prove though is that

there are ways to make money that are not obvious. Bidding on potentialities

is now the sophisticated way of doing business. It’s going to require a little

trial and error, and accumulated experience – which is why you are advised

repeatedly to start learning early by investing small sums and getting a good

idea of what’s going on. The stock market is certainly not just an alternative to

banking, as the very nature of options trading demonstrates. Sure you can set

up a balanced portfolio of stocks and bonds, but that’s the tip of the iceberg in

the ever growing creativity of business transactions. One can’t help but be a

little enamored – definitely worth looking into.

But making a choice with confidence is not always easy, especially with the literally thousands of option trading systems available on the internet.  Still, if you can choose the right system, you can gain massive profit potential.  To organize the selection process, you need to break it down to basic factors.

Stock option trading is somewhat risky by nature, of course.  Hence, it is essential to select an option trading system with a proven track record.  You need to find one that can really deliver results and not just make claims.  Its track record should speak for itself.  You can also look at its historical data and view charts and actual performance results to ensure that it has a winning record.  It is wise, also, to verify whether the moves indicated in the system’s history were simply placed there or used in an actual trading market.

You may also find it advantageous to set up some sort of automated trading system, so that you don’t have to stay glued to your computer.  Automatic trading facilities enable you to enjoy the trading process in a more relaxed and hands-off manner.

You should also consider the amount of trades done by the system within a month.  You have to make sure that you can reach the maximum return.  Basically, you want option trading systems that regulate the trading activity in a week or a month, otherwise commissions will hurt you in the end.

There are many benefits to choosing the right option trading systems.  They can lower the risks involved with each trading action and open doors that will allow you to gain maximum profits.  Thus, it pays to do your homework.   And never rush into a decision.  If you make a mistake when trading options, it could be a costly one.

To find additional information about option trading systems that is accurate and up-to-date, visit: http://optiontradingsystems.net

Options Trading is just another of those activities that has benefited from the internet. The benefits can be divided into two major subdivisions. They are accessibility and information.

To understand how online option trading benefits from the accessibility aspect of the internet, consider what the internet actually provides. It is access to more choices in less time. This general principle applies equally to dating and shopping. It is possible to meet thousands of potential dating partners in the conventional way, and it is possible to shop in thousands of stores. The quality of the end product is not in anyway improved because the search process is done electronically. It is only that more choices can be sorted through in a quicker time and with less trouble. When you have more choices, you are more likely to find the right one.

When you search for an online broker to handle your online option trading account, the search criteria remains as it has always been. You need to consider reputation. You have to evaluate the cost of commissions. You need to investigate minimum and maximum account and transaction amounts. Customer service and ease of conducting business remain as high priority items in your decision making process.

The website of the prospective firm will give you all of the information that you need in these areas with the exception of reputation. You can expect the firm to claim to be the oldest, most reliable, and best one available, but some outside confirmation of that might be wise. The website is the platform on which your trading activities will take place, however, and although pretty graphics and bright colors are certainly little more than the bells and whistles, you are going to be spending a lot of time navigating around that site, and the ease with which that is done should be a consideration

What method you use to make your final decision is going to be ultimately up to you, but remember there are a large number of choices available, and they can be reviewed fairly quickly online. A small investment in time here is most likely going to pay off a good return in the future.

The second advantage of online option trading is information. The internet is all about the storage of massive amounts of data. Much of the data is available on the website of the firm that you chose to deal with, or at least it should be, but you are not restricted to that single source. The successful online options trader is going to be a master of the search engine. He will be able to pull up the information that he needs to make the best educated decisions possible in his choice of investments. There is no limit to the options available to process, sort, store, and display the facts and the figures that can help. The option trader of the past was forced to rely on a small amount of data, and a whole lot of gut feeling.

Even if you are still a bit old school, and feel that the key to successful investing is rolling the dice or following your instincts, you can take a look at the possible outcomes of those rolls, and supplement your instinct with a very large amount of useful data.

Never before have there been so many potential investment opportunities, or such an easy and inexpensive way to educate yourself to take advantage of them. Online Options Trading is one of them.

Almost every trading books and trading seminars that I have come across failed to emphasize which is the most powerful of them all is Money Management.

What is money management? In short, it is about preserving your capital and keeping you in the market for long. You can know the strategy that make you the highest percentage return in the shortest time but if you do not have an excellent money management system, it will not be for long that you got kick out of the market.

In my first few years in trading, I was chasing after trading books, seminars, workshop to find the fastest way to profit in the market. It was until one day when I had nothing to do when the market was not open for trading; I found out that the most important strategy in trading is your money management.

Some may be asking, how did I conclude that the most important is money management?

I did a calculation to prove to myself.  

Let’s assume that I start trading using $10, 000. And my money management system is 10-10-30.  Meaning to say, the first “10” represent that I will not put more than 10% of my capital into one trade. The second “10” represents the maximum I am willing to risk from my investment. In other words, my stop loss is at 10%.

The “30” is the profit target I set for myself. So what is means is I will exit my trade once I hit my profit target of 30%.

I try to put the system on a 60/40 accuracy trading method (60% losing trades/40% winning trades). And guess what? If just based on this money management system and stick to it strictly, I am able to make a 6% net portfolio growth based on 10 trades.

Based on the assumed starting capital of $10, 000, the example shows that I lost $600 in those 6 trades but I profit $1, 200 in that 4 trades. Over net profit is $600 or 6%.

This is when people always ask me, “Which is the most powerful strategy that you use to trade?”, I will always answer, it is money management.

Different people have different risk tolerance. So there is no money management system that will suit everyone. I suggest you take some time to review your money management system and if you don’t have one, you MUST start one!

If you are in search for a real options strategy to add into your arsenal, then I recommend you my book, Huge Profits Options Trading with Simple Analysis.

This is a no nonsense or textbook strategy book. All the information presented in this book is about sharing with you how to study the market, when to enter and when to exit and take profits. Whether you are into stock or stock options trading, this book is for you.

Go to my website, www.BuyLowSellHighTips.com to witness the extraordinary stock options trading ebook that was personally written by me.

Where can I see this step up function in a consistently profitable portfolio, with these portfolio measures and trade performance metrics? Follow the link below, entitled “Consistent Results” to see a model retail option trader’s portfolio that shows these traits.Moving onto the hard metrics.  There’s 2 ways to count the Return on your trading capital.

In both cases, you can minus the Total Cost of Commissions from Total Profit, to get a Total Net Profit number.  The, divide the Total Net Profit by the Start of Year Cash Balance; or, Net Liquidating Value.  Net Liquidating Value is how much your entire trading account is worth, which is equal to Total Cash + Options Value + Stocks Value + Commodities Value + Bonds Value. The Start of Year Cash Balance is straightforward – it is the money in the account at the beginning of that trading year. Cash increases when you are short securities; but, cash decreases, as you get long on securities.To review your performance, calculate these metrics using the Profit (wins) and Loss (losers) from your account:

The Average Win divided by the Average Loss measures how RESPONSIVE you are in taking profits and cutting losses.Combine the Accuracy ratio with the Responsiveness ratio to get your Performance Ratio.Performance Ratio = (Win/Loss Probability) x (Average Win / Average Loss).  Always aim to maintain the Performance Ratio above 1.00. Why?  The commonly known money management rule is to allocate 2%-5% of (60% x Net Liquidating Value of the account) per trade.  What is not commonly practiced is the discipline of moderating a +/- 1% in trade allocation between the 2%-5% allocation.

This is how to achieve a ladder effect in stepping up profits and stepping down losses. This mechanism of stepping up/down is an indispensable tool for rewarding profit and to discipline the risk of losses.  It forces you to improve both ACCURACY and RESPONSIVENESS before raising your position size.

Where can I learn more about portfolio measures and trade performance metrics as part of a total trading system? Follow the link below, for 55 hours of video-based learning of online options trading from home.