Learn Option Trading Without Any Risk

By: A.J. Brown

Anybody who has looked into option trading becomes fascinated with the potential profit. On the other hand, nobody wants to risk losing money to find out if it will pay off. This is how I felt when I became an option trader.

Fortunately, I overcame my natural fear and decided to take action. The results have been nothing short of amazing.

But I didn't overcome my fear of losing money by jumping head-first into the market. Neither did I overcome my fear by learning more strategies or filling my head with the daily stock market news.

What I decided to do was fun, practical, and easy on my wallet. I utilized a method of option trading that eliminates all the risk. What method is this? It's called "paper trading." Let me explain how it works...

Paper trading means you trade on paper only. You don't risk any real money. But you pretend as if you were. So you identify a solid option trade, pretend that you've purchased the option, and then write down the price at which you entered your trade.

After that, you simply watch the option to see if the price is moving in your direction or not.

If you really want to get the full benefit out of this method, then give yourself an imaginary account balance of, say, $5,000. Use the money in your imaginary account to trade options. Reduce your cash balance when you buy options; add the cash back when you sell.

By using this method, you will see the real-world results of your trading activity. Your balance will go up or down based on actual pricing data.

Does this sound boring? Even if you think it is, I strongly encourage you to try it. Because I used this exact same strategy to develop my option trading skills.

Believe it or not, I didn't paper trade for a week or two; rather, I paper traded for a few months. This gave me deep insight into how options work, what I was doing right, and -- more importantly -- what I was doing wrong.

Here's an analogy. One of the most popular board games ever created is Monopoly. By playing this game, the players naturally learn some of the skills required to buy real estate and rent it out as a landlord.

Paper trading is similar. It is a game you play to learn the skills required for being a successful option trader.

This kind of experience is invaluable. And the best part is you can't possibly lose any money paper trading because you're not using real money. You've literally got nothing to lose!

Article Directory: http://www.articletrunk.com

| More

Before you risk another dollar in the market, learn option trading strategies and tricks you can apply immediately to win more trades and improve your trading account.

Please Rate this Article


Not yet Rated

Click the XML Icon Above to Receive Investing Articles Articles Via RSS!

Powered by Article Dashboard