I often get asked that question. The truth is, trading is not easy and when the markets are volatile, as they have been, it just makes it tougher. Option trading like any other trading is an emotional activity. Most people are attached to their hard-earned money and don’t want to lose it. But as traders, you can’t make money if you don’t have any positions on. Therein lies the dilemma. How do I make money without trading?

The answer is you can’t. But you can also lose when you are not a disciplined trader, particularly in a market like we have been experiencing over the past several weeks. Market risk over this trade war has been crazy. As I always like to say as a reminder to the option traders I coach, you don’t have to trade. Sitting on your hands can be extremely beneficial to your account.

The problem is people ask you how you are doing, especially as a new or newer option trader. In addition, traders put that pressure on themselves. I tell my students to not listen to outsiders when trading. No good can come of it. Of course, this is easier said than done. Just try to focus on being a disciplined and successful option trader.

I know we cannot see into the future, but we can learn from our past. I like to tell traders that although it is not fun and money cannot be earned if you don’t trade, usually profitable trades will not be missed especially in volatile markets. If they trade and lose money, I tell them they wish they could go back and see those trades that they should not have made and then they would feel better about not forcing any more trades.

The bottom line is you don’t have to trade. If you don’t feel you are putting the odds on your side, what is the point? Stand down and watch!

John Kmiecik, Market Taker Mentoring