Eight Easy Tips That Can Turn Your Trades From Losers to Winners
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There are many profitable option trading strategies, but none of them will work unless you are willing to stick to a set of guiding principles. Several rules I employ are helpful in maximizing profits, limiting losses and, most importantly, taking the emotion out of trading.
Below, I will go over my basic trading philosophy, why I decide to take profits or cut losses when I do and how these decisions can be used to limit risk.
1. Taking Profits
My expectation for every option trade is at least a 100% return. Once a trade reaches a 100% return, we can either:
- Exit the trade completely, or:
- Sell half—or even a third—of the position, place a protective stop on the remaining position and keep riding the wave
Once the option premium has reached my target, I typically close the position and move on to the next trade. As an alternative, if the 100% profit target is reached, I might…
The post Eight Easy Tips That Can Turn Your Trades From Losers to Winners originally appeared at Investors Alley.
Category: Options Trading Strategies
