Knowing that you can make a lot of money from trading options can be very exciting. Many have the experience of jumping the gun and discovered painfully that they have lost all the money simply due to ignorance. The answer is patience and the discipline to follow through a simple trading plan.

My objective here is to share some thoughts with you so that you will not fall into some of the options trading traps in becoming a successful options trader and be financially well.

Before you begin trading options it’s critical to have a clear idea of what you want to accomplish. Options can play a variety of roles in different portfolios.

It is not about what you trade but rather how you trade. By just selecting the appropriate strategies isn’t good enough, what you need is a system that can produce consistent profit month after month. It requires discipline to follow your trading plan and your trading objectives.

You must be able to differentiate between trading and gambling. Many will get carried with one strike of chance and take away a big prize money or being misled by others who post their winnings in some forum. They get excited and blow up their trading account. If you feel excited when you are trading options, you are gambling.

Look into “Earnings” under “Categories” in this blog, you will find that there are many examples of earning play. To me playing earnings announcements is gambling, extremely high uncalculated risk and predictions are involved.

Many novices don’t even read charts or relay on any technical indicators at all when buying the options. What they have in mind is the amount of money they can make if the stock gap up the next day. This is greed; too much is going to kill you. Be very careful as not to turn your computer screen into an online casino.

Some may disagree with me; it is only my personal point of view. Those who have suffered heavy losses playing earnings will definite agreed to what I have just said. Last word of advice “Be smart and be a better trader”. I’ll leave you with this quote.

“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring” – George Soros

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