Hello,
I thought I’d share a little of my journey to become an options trader. As a 50 something investor, I had a few more years in the workforce, and I wanted to find another way to generate income besides going to the office.
I’ve always liked options because of the potential limited risk, and unlimited reward potential of a trade. I’d taken an options course about 10 years ago and made somewhere between 100 and 500 options trades during the years so I thought I had a good foundation.
After a nearly 30 year career with a Fortune 500 company, I wondered if I could take what I had learned about trading and try to make a full time living at it. I had an opportunity to leave under a voluntary retirement option so I decided to take my shot at it.
So with my financial backstop from my old job I set about learning all I could about options trading and seeking my path to success. So over the next two years I did over 1000 options trades.
And do you want to know what happened??
I learned that it’s a lot harder than it looks.
Making a sustainable income is very different from having an occasional winning trade. It requires a plan and a repeatable systematic process, much like any business operation.
Along the way I’ve taken a number of courses, tried a wide variety of approaches and connected with other like minded investors. I even taught an options course and hosted a weekly lunch and learn with at group of self directed investors like me. I learned about trading plans, technical indicators, puts, calls, an alphabet soup of trading strategies, and a whole lot more about the practical side of things.
But there’s one factor that I noticed that overlaid all of the options training that I had taken. This secret was right in front of me, in plain English in nearly every options trading course I had taken. It was an assumption that was blatantly obvious, but for the longest time I ignored it. Here it is……
Every options strategy I looked at started with one of these phrases
Assuming you are bullish, then………
or
Assuming you are bearish, then…….
or
Assuming you are neutral, then……
I spent all my time focusing on the “then….” which was the options strategy. But truth be told, I did not have an understanding of what it meant to assume you are bullish, bearish, or neutral. I needed a basic foundation in technical analysis.
All the other stuff was great, but if the core assumption was wrong, then I was heading down the wrong path.
So if you would like to learn more about being bullish, bearish, or neutral, and how to develop a systematic repeatable approach, please watch for future updates, as this is what I’ll be writing about.
I’ll be sharing some of the tips, tricks and techniques that I learned as we go. Over time, we will focus on some of the techniques that help determine if you are bullish, bearish or neutral. Then we will talk about the practical steps that will help you get through the options learning curve. Most importantly we will talk about how to trade with a plan, position sizing, and setting targets for entry and exit.
So, until next time,
Keep those stops tight!
Best regards,
John