Finding Or Creating Your Own Options Trading System That Works

by: Jack Danger

Stock Options are wonderful! This clever derivative of the equities market has to be one of the most ingenious inventions of modern times. For the trader who can learn how to win at trading options there are many luxuries in life that can be experienced.

Success in options trading requires a consistent approach for long-term success. This statement is not meant to be grandiose, idealistic comment made by some 'trading theorist', rather, it is a statement born out of the hard knocks and success experiences of the author and many other long-term, successful trader contemporaries.

This "consistent approach" to options trading can also be called a "trading system", or an "options trading system" in this case. The term "trading system" is not necessarily confined to a series of computerized "black box" trading signals. A trading system could be something as simple as "buy an option on a stock in an uptrend that breaks the high of the previous bar after at least two days of pull back down movement that make lower lows." A trading system is simply an organized approach that takes advantage of a repeated pattern or event that brings net profits.

Since an Option is a "Derivative" of the stock you must derive your options trading system from a stock trading system. This means your trading system must be based around actual stock price movement. That said, your trading system doesn't need to work for all stocks it just has to work for certain types of stocks, certain volatility of stocks and certain price levels of stocks - So focus your trading system on certain stocks that have price behavior that is predictable to the net results you wish to abstract from a stock.

You can develop a trading system, a trading approach, and a trading methodology by identifying a price movement pattern (or lack of price movement pattern) or some event that occurs on some sort of regular basis. This means you can trade price behavior patterns on price charts such as: traditional chart patterns, trends, swings, pivot points, boxes - or you can trade events that motivate stock price such as earnings runs, post earnings runs, stock splits, or seasonal factors. Bottom line to make the maximum profit in options trading you want your stock to move in your favor fast and you want it to move far. Just a relatively small movement in the price of a stock can double your money in options!

There are so many different strategies and combinations that you can trade with options. You can buy calls and puts for directional trades. You can employ call spreads and put spreads to trade directional movements with a buffered risk, and profit. You can sell or purchase spreads to receive the credit of the premium decay by options expiration. You can trade straddles and strangles if you expect a big move but are not sure in which direction. You can also get into ratio back spreads, condors, and butterflies. And if you're really feeling crazy you can sell 'naked' options (just better use a stop loss or you'll end up like one of my old trading buddies who ran an account to $20 million then gave it all back selling naked options.) You can go to http://cboe.com for more information on options trading.

Directional options trading systems are the best. Keep it simple, buy calls for and upside trade or buy puts for a downside trade. But this means you need a directional stock trading system in order to trade directional options.

Here are a couple of different approaches for directional systems:

Develop an options trading systems that trades the swings in stock price movement. There are many good swing trading systems available today. We suggest you obtain one. Bottom line with swing trading is that you want to swing trade with the trend. Options brokers these days have advanced order technology that will allow you to enter swing trades based on the price movement of the stock so you don't have to watch this stock all day. That huge advancement to swing trading options.

Swing trade the day bars. Most swing trading systems are based on daily bars on the stock price chart.

Swing trade the Intra Day Bars! Their other fantastic systems based on intra day charts that pin point swing trading entries.

Develop an options trading system that trades three to six month trends. This is where the big money is. Trading the large trends is where many are able to place larger sums of money to develop their net worth.

Develop an options trading system that trades pivot points. Pivot point trading is arguably the best way to trade options, because price action usually is explosive, and happens quickly in our direction when a trade works.

This is good because you can use shorter-term options and leverage yourself a little better. And it's also nice you can make great gains in five days to four weeks on average so time decay issues become less of a worry.

There are many different directional trading methods you could use to trade options. You need to pick one, work it, and never use more than 10% options position size per trade on small accounts 1% to 5 % max position size on larger accounts. This methodical way of money management trading options is the fastest way to potentially rapid account growth, helping you avoid needless set backs.

Jack Danger - A head trader at http://www.opivotrading.com OPIVO Trading specializes in trading a unique pivot point strategy on stocks with options offering a subscription service as well as a home study course.

Best Options Trading Strategies | Learn To Trade SPY Weekly Options

Click Here For More Trading Tips

Option Trading-some Tps To It

by: David Baxwell

Option trading is a precarious business. It is complex and speculative. It is clearly not a good activity for everyone. Investing through option trading can be risky. Winning is definitely not a certainty. Only a small number of people can successfully engage in option trading.

There are some key things to be aware of before jumping in to the world of stock options trading. Do you know how much money you have to spend? How do you know what you can afford to 'live without' should the market fall? If you spend more than you have, not only could you stand to lose what you've invested, but perhaps the trickle down effect could cause more damages to your lifestyle. Be aware of your means, and be smart with your investments.

Realizing commodity characteristics and additional option signs up is crucial prior to enrolling into those forms of signs up. You had better acknowledge in advance the conventions so that you are able to approximate whether you're able of addressing your responsibilities. If you're not acquainted with the method of the dealing, you need to acknowledge who you should get hold of if ever you've troubles or doubts that might develop. Option trading can be really complicated, so you need to have somebody to direct you.

Option dealings is a bit of a risky business and people who are considering buying and selling stock options should be aware of their own financial limitations. For example, there's little point in investing everything you have, if the stocks you choose fall before they rise. If you can't play, you can't stay. Examine how much 'expendable' monies you have to work with, and then you can decide how and where to spend them.

You require apportioning your endings with an agent in order to find out if your conclusions are healthy and advantageous. You should even take help of option tutorial (http://www.tradingtrainerblog.com/what-exactly-is-an-option/) as these are really helpful. If you believe that you're adequate to and you've all the causes to commit in the option trading and the hereafters, you as well require to ascertain the extent to which you prefer to swear on the advice of the agent instead of believing your own decisiveness's.

Then later on actualizing, you should equate and appraise all the formulas of trading prior to selecting the one that you believe that will most beneficially enforce your destinations. Finally, you should fix a few boundaries concerning the length of the investment and the measure of loss you're wishing to place yourself into. Just like the additional fiscal markets, option trading and futurities, they're resorting and the profit might not follow that promptly.

Option trading is basically a setup where an individual could make use of stocks at a particular cost. You should be very careful in investing on option trading. You could make use of the option trading however the market goes. Even if the market is coming down along, you could make a profit and you would not lose if it goes down. However, there is a great risk at all you do in this kind of trading. Hence I would suggest going for a stock option education (http://www.tradingtrainerblog.com/what-exactly-is-an-option/) before getting in to this field.

You need to know a few things about option trading (http://www.tradingtrainerblog.com/) before you start. You need to know what your goals are, determine the extent of your knowledge, and decide how much you can afford to lose. You need to know this because sometimes you can be overly confident and lose more than you can afford. It has happened in the past to other people, and it can happen to you. In order to know whether your conclusions are correct and are beneficial to you, you should discuss them with an agent. You can also take help of option tutorial (http://www.tradingtrainerblog.com/what-exactly-is-an-option/) to augment your stock option education (http://www.tradingtrainerblog.com/what-exactly-is-an-option/).

Traders Choose Binary Options Instead of OPTIONS TRADING

Click Here For More Trading Tips

What to Look For in an Options Broker

by: Andy Richards

Locate an options broker that can offer you a competitive commission rate for your transactions. Make sure they provide you with accurate and reliable software and web based trading platform on which to execute your options trading. The most important component the option brokers should extend to you is sound advice based on experience in the exchange in which you will be trading as well as having accreditation on that exchange's terms, conditions and rules.

There are a variety of combinations of which you can trade options. A good options broker will be able to provide you with sound advice on which of these combinations to select. Your buying and selling transactions should be based on the advice and thorough research performed by you and your options broker. The best advice should be based on the goal of obtaining the best price and best spreads in combination trading.

If you do not understand a certain option, term, or scenario you must be prepared with questions to your options brokers so they can lead you to the right conclusions or understandings. Options trading are very complicated and one of the fastest moving markets in which to perform your trading transactions. Make sure your options broker provides you with current and accurate information and advice on how to precede with options trading in your specific exchange.

Trading options are fast and go directly to the market without any holds or time delays. In order to process these types of quick transactions you need a reliable and speedy platform to execute orders. Most options brokers provide a user friendly platform in which to use for your trades as well as research. These platforms can include charts, graphs, reports and other information that can help you make the right investment decisions. Make sure you keep your platform software up to date and have fast access to the internet through a new computer. This will make your trading easier, faster and more reliable.

For the top option broker comparisons, reviews and resources visit http://www.yourbrokerguide.com

Hi my name is Andy, I hope to be able to contribute to this site through my posts and look forward to talking with you all. I am interested in a variety of things, such as investing, and stock market stuff, computers and internet, obviously, as well as sailing,water skiing, pretty much any types of water sports actually.

Successful Option Trader reveals his Trading Strategies with Tom Sosnoff on tastytrade

Click Here For More Trading Tips

Options Brokers - Top Options Broker Resources

by: Andy Richards

If you are looking for an options broker you need to find one of the top accredited brokers in the exchange of your choice. Searching for the top options for broker resources on the internet can be challenging if you do not understand the difference between accredited brokerages and those that simply provide a service.

Accredited brokerages are those that have been tested and passed the exchange requirements for a particular exchange. Make sure before you turn over your options trading to a brokerage that they have the accreditation for that exchange.

There are many discount option brokers but they are all not accredited. There are also various accreditations a brokerage can obtain.

Some brokerages offer execution only services and do not provide any type of trading advice on your options. If you understand your market and the exchange in which you trade this type of options broker can usually save you money in fees and service charges.

Full service options brokers are not only accredited but also provide advice. The costs of the full service brokerages are usually higher than those that simply provide a transaction service.

Compare pricing structures on options, trades and other costs that are associated with options trading. Commissions can greatly vary depending on the type of options broker and the services they provide.

Along with provide trading advice some options brokers offer software packages or trading platforms for your use for trading. Some options brokers charge a fee for you to use their platform while others include that as part of their overall services.

The platform you use should be reliable, easy to use and provide fast real time access for instant trades on the market. It will also include charts, reports and analysis to help you determine the right trading strategy.

For the best options broker comparisons, reviews and resources visit http://www.yourbrokerguide.com.

Hi my name is Andy, I hope to be able to contribute to this site through my posts and look forward to talking with you all. I am interested in a variety of things, such as investing, and stock market stuff, computers and internet, obviously, as well as sailing,water skiing, pretty much any types of water sports actually.