Why you need to consider trading as a business, because, if you see every business in normal life, they are also in trading, they trade product, few trade service, and make money, you trade options to make money, its that simple,
Lot of traders fail, because they did not understand trading
is also a business. They feel emotional while taking loss, excitement while
booking profit. You must see it’s a part of a business, nothing new.
When you start considering Trading is a business, your
trading will be at new high, and you start managing it professionally.
Treating your trading as a new business is the greatest
approach to include all of the ideas of risk and trade management into your
investments. Your company is in business, and you are the president and chief
financial officer. This is a professional endeavour that should not be treated
lightly.
You are risking real money if you consider it as a pastime
or hobby. As a trader, your duty is to administer the company that manages your
money. Your company's employees are your trading positions. and it is their
mission to make you money. Whether you are a business owner or an investor, Whether
you are a casual trader or a professional money manager or trader, You should
approach your trading with the same professionalism.
Initial Phase
There are many sunk costs and expenses required to get a new
business started, as well as extensive preparation and hard work, throughout
the start-up phase. As the owner of a new business, you will need a complete
business plan that describes the objective of the firm, how it will get
started, and how it will conduct its daily operations, as well as advise on
budgeting concerns so that the company can manage its revenues and expenses. To
begin the business and hire personnel, you will need to obtain assets. The most
crucial and toughest element of beginning a new firm is the start-up phase,
which typically lasts one year.
Most new businesses require time to become profitable, so
you, as the owner, must be patient. Most new businesses require some time to
become profitable, therefore you, as the owner, must be willing to absorb
losses until your firm can begin producing a profit.
Option trading has a start-up period as well. Before you
begin trading, you will need to invest time and money in learning about options
and researching the market. Most traders begin working hard as soon as they
begin trading and fail to plan ahead of time. learning while trading and losing
money, is an extremely expensive kind of schooling. Of course, you will be
learning all the time while you trade, but before you invest your first money
in your new venture, you must commit to studying everything you can about
options.
We've worked with a lot of option traders, both new and
experienced, who still don't grasp how options work. We're not talking about
the complexity of options, which take time to grasp, but rather the fundamental
mechanics that every investor must understand before risking a single dollar.
Investors with a few hundred bucks invested in a position with short options
have claimed to being unaware of assignment and exercise. Some investors may
put Rs 50,000 into a position and then seek for assistance in closing the trade
after they have earned a profit (imagine putting money somewhere, making a
great profit, and having no idea how to get that money out). Others are unaware
of time decay. You cannot invest in a security such as options with expiration
dates when the security will no longer exist and not understand the impact time
plays in an option's value.
As with establishing a new firm, you should put in the work
and time to learn the business you are about to enter before you begin trading.
Even if you've been trading equities for years, options are a completely
different animal. The mechanics of options are not difficult to master, thus
there is no reason not to. Do not simply learn that you should buy a call if
you expect the stock to rise and a put if you expect the price to fall.
You should understand exercise and assignment, time value
and time decay, implied volatility, the factors that influence option prices,
open interest and volume, how options are traded, and so on.
Without proper education and learning you will not be successful
in any field of life, one of those field is options trading. So learn from
basics to advance, then start Trading. Good luck…
The ValuePlusOptions Team
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