Stock options ??n ??th?r h??? ??? t? gain a h??? return ?n th? stock market, ?r ?t ??n completely ???tr?? ???r account. Trading th?m ??n b? a ???? thing ?? long ?? ??? keep a handle ?n ???r risk.
Th?r? ?r? three things th?t m?? h??? ??? t? increase ???r chances ?f being profitable w?th th?m.
1. On?? ??? a small percentage
B? ?n?? using a small percentage ?f ???r account ?n ?n? one option trade ??? ?r? lowering th? amount ??? ??n lose. Th?? ??n b? a very effective strategy considering h?w f??t options ??n m???. If ??? ??t ?n th? wr?n? ?n? ?f a trade ?t ?? always better t? lose ?? ??tt?? ?f ???r account ?? possible. Controlling risk ?? th? m??t ?m??rt?nt ??rt ?f trading.
2. Trade w?th Th? Trend
Another ?m??rt?nt ??rt ?f option trading ?? trading w?th th? trend. An object ?n motion stays ?n motion. Chances ?r? ?f a stock ?? trending one direction ?t w??? continue t? trend ?n th?t direction ?t ????t ?n th? short term.
3.
Setting targets
It ?? ???? a ???? ???? t? h??? two targets, one target t? t??? ??? wh?r? t? ??t out ?f th? option ?f ??? ?r? r??ht ?n? one t? t??? ??? wh?r? t? ??t out ?f th? option ?f ??? ?r? wr?n?. Th?? lets ??? lessen h?w much ??? w???? lose ?f th? stock turned against ??? ?n? ?f ??? ?r? r??ht ?t lets ??? t? ??t out once ??? th?nk th? majority ?f th? m??? h?? b??n m???.
An added side benefit t? having targets ?? th?t ?t allows ??? t? develop a risk t? reward system ?n? determine h?w much possible reward ??? want t? take f?r ???r? $ 1 ??? risk.
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