Hi, I hope that your portfolio is growing. This is part two of a series of six articles including a video for each article. If you are interested in learning how to trade options, I recommend you watch all six videos.
You will learn how to back test all your trades. This is a very important step. It will take time, but it's very necessary. There are only a few option software programs out there at this time that can help you with this task. Learning how to trade without costing you a dime is well worth your time. I was using Optionvue and Think or Swim to back test my option trades and learned a lot. These two software programs have been very good, but now San Jose Options has just released a new type of back testing tool called the "Options Toolkit." With this back testing tool you will save a lot of time in comparison to any other options testing software that is on the market.
It use to take me one hour to back test a year of trading using a Butterfly trade with the Optionvue software. Then I used Think or Swim and it would be a little better, less time, but not as much information. Now, when I use the "Options Toolkit" I actually gather more organized data in about 2 seconds, this is to back test one year of Butterfly trades. It is so much better and faster. It's truly a great tool to have at your fingertips.
Another step that each option trader must take before finding success is simply trading for many years. Experience is what we all call it. The reason that an option trader needs to trade for so long is because the stock market is constantly changing, and in order to see the many faces of the market, we need to trade for many years. There is no other way around it.
Paper trading is an excellent way to learn how to trade options. It is easy to get access to a Paper account. You can open up a free trading account with Think or Swim and/or almost any other options broker. This will give you the practice you will need. It may be difficult, but it is very important to paper trade for at least six months to a year. Remember, it is very important to gain experience over time, and paper trading is one way to gain this experience without risking any money.
At last, I would like to tell you that you should keep about 25% of your capital in cash. This is very important! The best option trades always require adjustments. In order to make these adjustments, you will need extra cash. It is very dangerous to use all of your spending money in your trading account. Every option trader leaves lots of money in cash in order to make adjustments. You need cash to lock in profits and manage your portfolio as needed. Keeping this cash helps you to be a successful trader.
You will learn how to back test all your trades. This is a very important step. It will take time, but it's very necessary. There are only a few option software programs out there at this time that can help you with this task. Learning how to trade without costing you a dime is well worth your time. I was using Optionvue and Think or Swim to back test my option trades and learned a lot. These two software programs have been very good, but now San Jose Options has just released a new type of back testing tool called the "Options Toolkit." With this back testing tool you will save a lot of time in comparison to any other options testing software that is on the market.
It use to take me one hour to back test a year of trading using a Butterfly trade with the Optionvue software. Then I used Think or Swim and it would be a little better, less time, but not as much information. Now, when I use the "Options Toolkit" I actually gather more organized data in about 2 seconds, this is to back test one year of Butterfly trades. It is so much better and faster. It's truly a great tool to have at your fingertips.
Another step that each option trader must take before finding success is simply trading for many years. Experience is what we all call it. The reason that an option trader needs to trade for so long is because the stock market is constantly changing, and in order to see the many faces of the market, we need to trade for many years. There is no other way around it.
Paper trading is an excellent way to learn how to trade options. It is easy to get access to a Paper account. You can open up a free trading account with Think or Swim and/or almost any other options broker. This will give you the practice you will need. It may be difficult, but it is very important to paper trade for at least six months to a year. Remember, it is very important to gain experience over time, and paper trading is one way to gain this experience without risking any money.
At last, I would like to tell you that you should keep about 25% of your capital in cash. This is very important! The best option trades always require adjustments. In order to make these adjustments, you will need extra cash. It is very dangerous to use all of your spending money in your trading account. Every option trader leaves lots of money in cash in order to make adjustments. You need cash to lock in profits and manage your portfolio as needed. Keeping this cash helps you to be a successful trader.
About the Author:
Learn more about the Options Trading Software. Stop by the San Jose Options Mentoring web site where you can find out all about Trading Options and what it can do for you.
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