Option Trading tips for beginners

By Shawn S

As a senior trader with the Option Trade Alerts Service, I often get asked, how a complete novice can hit the ground running as an options trader. Here are some simple tips to help the novice options trader, just starting out:

1. Open an account - The first thing that you should consider when you decide to start options trading is to open a trading account at a leading brokerage house. This may seem a bit counter-intuitive, but it makes a lot of sense. Most brokerages will allow you to open and fund an account, with as little as $2,000.00. This will get you used to all the terminology and most importantly, give you the ability to test different strategies on a virtual account basis.

2. Learn all the Strategies - There are a myriad of good options trading strategies. You want to be able to find


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a strategy that's a good match for your overall outlook on the market. Each trader must understand whether their overall trading stance will be short, medium or long term, and use this as a gauge as to which strategy suits them.

3. Learn the lingo - Each brokerage house will offer more than enough information than you will ever need as to all the terminology that is used in trading. Once you open your account all the information that you need is on the site. Also, use the internet and take advantage of all the courses that are out there that are free.

4. Test a service - Test out a couple of different services. They usually offer a free month which allows you time to find out what suits you. The traders who run these sites have been doing this for a while and claim to know many things about the market. Test them out and see what you can learn. Keep in mind their recommended trade size so that you can tell if the service will work with the amount of money that you have to invest.

5. Virtual Trade - Unless money is not an issue, and you are independently wealthy, you must virtual trade. This is virtual money! If you lose it, it is a simple matter of clicking the reset button and it all starts over again, at any level that you want. Virtual trading allows you to try many different strategies until you find one you are comfortable with or one from a service that you like. However, you should treat the money as if it were real, so that you are not cavalier with your entries and exits.

6. Keep a trading journal - It is very important to keep a trading journal. This allows you to note everything that would cause you to get into and out of a trade for emotional, technical and fundamental reasons. It allows you to know your triggers and helps you understand why you trade a certain way and will allow you to learn your trading pattern. Most trades become emotional after a short while. It is important to know your own triggers, and find out for yourself, what you need to do to avoid mistakes!


Option Trade Alerts is a service run by Seasoned Options Traders! OTA uses a mechanical system which allows traders to remain completely neutral on market direction. To find out about the Options Trade Alerts service,visit http://www.optiontradealerts.com. You will have the ability to trade alongside the experts with simple, no-nonsense trade alerts, detailing exactly what we are going to trade the next business day.