Becoming a successful options trader doesn’t happen overnight. It took Max years and many failed trades to learn everything he knows today. You’re a Max Options Trading member (if you aren’t, you’re missing out, start your free trial) because you want to be a successful options trader who is highly profitable. If you wish to turn options trading into your full-time career or just want to use it to obtain financial freedom, you need to practice these four habits of highly profitable traders.
HABIT #1: THEY SET GOALS
Without a goal in mind, it’s unlikely you’ll have any direction when trading. You’ll be lost. Having clear goals for individual trades, overall account growth, and trading education is essential to long-term success.
Some example goals are to:
- Invest $10,000 by May.
- Grow that $10,000 to $25,000 by October to overcome the Pattern Day Trader rule.
- Grow that $25,000 to $40,000 and then withdraw $15,000. Use it to treat my family to a nice vacation and invest in a safer investment vehicle.
HABIT #2: THEY STICK TO THEIR TRADING PLAN
Once your goals are set, you need to plan to achieve them. Creating a trading plan and sticking to it is how the most profitable traders grow their accounts.
Max’s current trading plan is to only trade spreads. His plan helped him grow his account from $10,000 to $25,000 in three months.
When creating a trading plan, ask yourself the following questions:
- At what percentage will I cut my losses every single time?
- At what percentage will I take profit?
- Which indicators will I use for technical analysis?
- How many trades will I allow myself to have open at once?
- Which trading strategy (spreads, naked options, stocks, covered calls) will I use?
Need help designing a trading plan custom to you? Take a coaching session.
HABIT #3: THEY DON’T OVERTRADE
Overtrading is one of the most common ways good traders become unprofitable. Overtrading leads to decision fatigue, overleveraging your account, and too much risk. During harsh market conditions, you’ll often see our admins say that they won’t be trading for a day or two until the market starts to go in one direction. You can’t take losses when you’re holding cash.
Stay disciplined and stick to your trading plan!
HABIT #4: THEY CUT THEIR LOSSES & MOVE ON
Your trading plan should include when you cut your losses. As Max says, “hope is a drug, fuck hope.” Even the best traders take losses. The best technical analysis can’t counteract a significant market swing due to an unforeseen influence. Learn to take your losses at whatever percentage you decide on and move on. Take the emotion out of trading, and your account will grow over time.
Now that you know the four habits of highly profitable traders, PLEASE PLEASE PLEASE use them. The team at Max Options Trading is invested in your success as an investor. We want all of our members to succeed at their goals, but you can’t do that if you don’t have any, to begin with.