Too often, folks come to options trading with an unrealistic expectation that they can learn the business of stock options trading over a weekend and begin making money the following week. The reality is that stock options trading is a complex endeavor. That's not to say you cannot learn the ropes and achieve a level of options mastery, but it does mean that you will need to spend some time and effort.
There are two phases to the process of achieving options mastery and becoming a profitable trader. The first phase is developing the academic understanding of how options work. Phase two is the transition from academic knowledge to the practical application of that knowledge in the market.
There are many stock options trading courses out there that can help you with the first phase. Some of the courses are very good, but the cost of the programs can run several thousands of dollars. On the high end, I have seen programs where the complete curriculum can run tens of thousands of dollars.
My personal favorite stock options course is the Options Mastery Series 2007 edition, which I have reviewed in detail. (Use the link to read the review.) The Options Mastery course covers the subject of stock options extremely well, and costs much less than much of the competition. The curriculum is derived from a program that was used to train professional trader trainees so that they could walk out onto the floor and hold their own with the experienced traders, but has been adapted to be suitable for a retail trading audience.
Tackling the second phase is a bit tricky and currently there are not a lot of good tools for the retail trader. In the professional trading world, trader trainees have the benefit of learning from more experienced traders. Retail trading is a lonely business, however. Typically, its just you and your computer.
Check back here over the next several days because I have some thoughts about how you can tackle the second phase of the journey.
Good trading!
Christopher Smith
TheOptionClub.com
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Sunday, June 24, 2007
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2 comments:
Christopher,
I completely agree with your assessment that there are few resources to help with the second stage. Besides reading more about the resources you have found useful for that second stage of learning, I would be interested in hearing your thoughts on self mentoring and self learning. Besides regular journaling and reading others ideas, do you have any specific techniques that you use?
Thanks.
ST
ST,
Yeah, making the jump from theory to actual trading is a bit tricky.
I think self-mentoring is something of an oxymoron. A mentor is someone who has experience doing what you want to do. If you lack the experience, how can you be a mentor?
Nonetheless, that is where many retail traders find themselves. Journaling is a very good way to learn from your mistakes and to keep yourself honest. It is too easy for us to rationalize why we're not going to follow our rules, but it is something else to actually write it down. The trick is to be diligent and disciplined in keeping your trade journal.
Stay tuned because I'm about to share something that may be of some help to those who are struggling with this problem.
Good trading!
Christopher Smith
TheOptionClub.com
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