Learning how to trade options effectively takes time. And let’s face it, for many option traders real, ongoing success never comes to fruition. Most traders cannot extract money from the market on a consistent basis because, well, it’s hard to do so. So why do we try? We try because it is rewarding to be a successful option trader either part time or full time. Keep in mind, though, that the one thing that cannot be rushed in your education process is the experience you receive from trading.

Experience Can’t Be Taught

If you have not noticed, and I’m guessing you have, there is an emotional element to trading. Only by putting on real trades can you gain the experience of knowing how you will handle situations as they arise. There will never be two trades or circumstances that will be exactly the same. But being able to put yourself in various situations and measure your progress and learning is the key to improving. As I like to say, it all boils down to management. And gaining experience managing trades cannot be taken for granted.

Experience also comes in handy when trying out new strategies. I like to tell traders to paper trade new strategies first using screenshots to get a feel for the position before putting their hard-earned money on the line. This type of experience is very valuable as well, even without the emotions of having “real” money in play.

Finally

There is so much to learn as an options trader it can feel overwhelming. Heck, even when I am teaching options, I recognize there is a lot to digest. Maybe you can have limited success without using common sense as an option trader, but you will need some real experience to be truly successful. The road may be longer and the journey rougher than expected, but it is so rewarding once you get there.

John Kmiecik, Market Taker Mentoring