After completing the Optionetics 2-day Seminar and Home Study Course, students are presented with literally dozens of strategies. This is quite overwhelming and many are left pondering where to start. Even longer term students are often puzzled as where to go next. In this article I am going to go through the fundamental areas to trading success and how to maximise your trading knowledge in a productive manner.

It is better to be good at something than average at everything.
Specialisation is a must for any successful trader. Trying to be the ‘jack of all trades' will lead to confusion and disappointment. After reviewing all of the strategies it is time to focus on one or two. Once you have decided on these, read as much as you can through articles on our website and posts on the discussion boards. This will allow you to build a trading plan based on other people's experience. It is paramount that the system you build suits your personality. What works for one person is certainly not guaranteed to work for another.

Obtaining the right mindset.
In my opinion trading psychology is the hardest area to develop and the most important aspect in becoming a successful trader. Emotion can be controlled through the creation of a trading plan. By having a system that incorporates a trading plan your entry and exits are predetermined. This will eliminate you gazing into the screen pondering whether or not you should be in a trade. There are some great books that cover trading psychology. One of these is called ‘New Market Wizards' by J. Schwager and gives an excellent insight into how the best in the business think. Whilst we aim to maximise profits and minimise losses it is human nature to do the exact opposite. This must be changed!

Paper trading and back testing.
Now that you have a strategy and an accompanying system in place it is time to see if it works. A lot of people when starting out (like I did) will throw their hard earned $$$ on the line and see if their system works. One of the biggest trading psychology hurdles you will now face is sticking to your trading plan. Rather than use real money it is an excellent idea to paper trade but you must take this seriously. If you are using software (ProfitSource/Platinum) this process can be fast tracked by backtesting. Financial disclaimers state ‘past performance is no guarantee of future successes however it gives you a very good insight. Besides as technical traders we believe history repeats. Once you are confident you have a successful system in place then you can start trading with real money. Stick to the plan!

Two heads is better than one.
The trading world can get very lonely if you do not have anyone to share your ideas with. As Optionetics Alumni students you have the opportunity to find a suitable trading partner. At the next seminar(s) be sociable and you are bound to meet someone who is focused on the same strategy(ies), has a similar amount of time to allocate to their education and similar goals/expectations. It is important that a routine time is made to meet up whether it be once a week, fortnight or month.

Setting objectives and monitoring.
Knowing how your account is performing is very important. This will allow you to measure whether you are on track to reach your objectives and account for any variation. Keep track of the number of winning/losing trades, average amount of winners/losers. If you have Platinum this can be automatically calculated for you through the money management section.

Be aware of the news.
Before entering an option position on a stock always check the news. Students quite often look at trades where there is a takeover/merger pending. If this is the case steer clear. The risk graph of stocks in a takeover often looks too good to be true and this is certainly the case. Traders also need to be aware of earnings dates and if your strategy involves selling an option be aware of any dividend dates. Evolving into a successful trader will be one of the hardest challenges you undertake but also one of your greatest achievements. For some people the benefits are reaped almost immediately whilst for others it can take years. What is important is that you learn from your mistakes as this will lead you to focusing on what is right rather than what is wrong. Remember Einstein defined insanity as ‘doing the same thing over and over but expecting a different outcome.' I hope this article has provided you with further insight into what is required in taking the next step.

Make it happen!


Guy Halpin
Trading Tutors