Do you lose money in options trading?

By Jack Wong
Optionetics.com.sg

I am a regular visitor to a few local trading forums. Very often, I see complaints from the forum participants in that they lost money in options trading. Some of them said that they learnt nothing from the instructors. The more sarcastic comment is that the instructors could not trade successfully, and hence they make money from teaching people to lose money. Do you believe these stories? Were you one of the victims who paid for these classes but were not able to make any profit?

The key to success in every form of trading is not about the trading strategies. I don’t care whether a strategy can yield a 7000% return in 3 days or a 10% return in a month. I am brave enough to bet the farm that if I give a trading system to 10 people, I will get 10 different accounts. Why? It is simply because each of them has different trading personalities and risk profiles. So, I respectfully submit to you that it is the trading psychology that split the traders into successful and those not so successful. Have you ever thought about this? Has anyone told you that trading psychology is a key component of your success in trading business? If not, you must find out more.

Let me share with you this week some key points to note on the importance of trading psychology, and in the forthcoming weeks, I will continue to discuss this topic in greater detail.

Have you thought about the risk in trading business? Is options trading really risky? If you think so, it is because you have not been equipped with the knowledge to run this business. Worst still, you acquire some form of knowledge which is dangerous enough to help you to lose money. Have you heard that if you buy a call on a stock you are bullish, you can still lose money without considering volatility? If not, you must understand that volatility is a key concept in options trading. So, options trading actually in itself is not a risky business to be in. It is people, you and I, who drive the business into the profit zone or the loss zone.

Let me talk about Optionetics. It is an educational institution providing education on options trading and its aim is to help aspiring options traders to be successful. Optionetics is going to conduct a 2-hour free introductory seminar on 7 to 9 July 2008 at Marriot Hotel. If you are new to options trading, you can find out more by visiting the website at http://www.optionetics.com.sg.

Jack Wong
Staff Writer
Optionetics.com ~ Your Options Education Site