How to Make Money With Options Part 7
What’s the Best Type of Options Strategy to Use or What’s the Best Type of Options Combination Strategy to Use to Make the Most Money?
For the most part if you get involved in options combinations strategies such iron condors, butterflies, calendar spreads etc. as you have complexity and you usually have a limitation on the amount of money you can make. So when you get a good move then your profits are capped off. But in order to make money in trading or business in general you need to make all the money that is there to make when the opportunity is there. You need to pay for your costs which are your losing trades. And when your revenue from your winning trades comes in at a greater amount than your losing trades, and your losing trades are your primary costs of doing business, then you make a profit. And profit is made over a series of deals over time.
You may have read about stories in trading books about how this or that trader went on an epic run and made a lot of money. But with some of those Traders you may have also read that later on in life they lost most of it and where they went on roller coaster rides back and forth. You don’t want to do this roller coaster ride or you don’t want to collapse after you’ve actually made an epic run.
Epic runs and special opportunities in the markets come and go time to time. The problem is most traders will try to make something happen during mediocre price action times in the markets and then they’ll start experiencing losses. They were expecting profits but they got losses. Then they get angry and try to make that money back which then gets them into a very negative mind state which then sends them off into a downward spiral into lots of losses if not losing their entire trading account.
You have to have a methodical method of trading that can net out over a series of deals over and over. So let’s say you are going to look at the frame of NET profitability every 10 trades. How does my system do performance wise, if traded correctly… ever 10 trades. Get that number. Then you can adjust your money management position sizing accordingly.
You need study your system over time and your system needs to be profitable, net profitable over a series of every 10 trades, every 10 trades (or whatever number you pick). This can give you a perspective on how good your system is while giving you a perspective of what it’s going to take to trade that system so you don’t get caught up in emotional roller coasters in the short term.