Sunday, January 29, 2012

6 Golden Rules For Option (call put) Trading - www.sokhitips.com

1. Clear Vision Of Target
We must always remember that reward and risk go hand-in-hand in trading and that we cannot expect to achieve high returns without planning for high risk (i.e. draw-downs). Your objectives and goals will be very specific to you, but they must have the following characteristics to be useful:

Be measurable
Be achievable
Be worthwhile
Be positive

2. Discipline
This is most important part of option trading. In order to realize the full potential of your trading systems it is critical that you take every trading entry, adjust every stop, and close out every trade as and when your system says you should do

3. Never add to a losing trade
Averaging is Options could prove to be very dangerous as there is always time factor.

4. Don’t take too much risk
Risk associated in every Option call should be very low and well calculated before entering any trade.

5. Minimize all trading business costs
You should select your broker carefully and should be aware of all the cost associated with each trade.

6. Be well educated
Keep a track of borad meetings ,any possible major event in market Etc because they create huge effect on Option pricing

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