If you are using an options trading system that doesn't incorporate at least some basic technical analysis, you could be missing out on some very reliable signals for trade entries and exits. Understanding TA can also take a lot of the guess work out of trading the Options market.
It is very hard to argue which way the trend is heading if a bar chart is making a series of higher tops and bottoms. Positioning yourself with puts and calls during a trend is like getting carried up an escalator - all you are doing is going with the flow.
But if the options trading system you are using ignores technical analysis, it can make it harder to be consistently profitable because you can be fighting the trend a lot of the time. Understanding where support and resistance lie on a chart can also allow you to open positions for extra contracts in the direction of the trend. By doing this, you can compound your profits with less risk, but if you ignore technical analysis, you can be flying blind. As the old adage says, the trend is your friend, and that's the direction you want to trade.
So does an options trading system that incorporates TA work all the time? Of course not, nothing does. You are going to lose on some trades because we can never know for sure what the market is going to do. Technical analysis points us towards probabilities and all we can do is make our decisions based on those.
The great thing about trading options is that you are never locked into a position. We can always roll our options out to a later expiry, or up or down to a different strike price as we need to. That means if we get the trend wrong, we can modify our position and strategy to suit the market. If you compare that to betting on a horse, where once they have jumped, you're stuck with your position. With options, you can make changes over and over again based on feedback from the market.
So what are your choices if you'd like to become a profitable options trader, but you're not confident in your ability to pick the trend or good entry and exit points? An easy way to reduce the learning curve and get started quickly is to model a successful trader's system and simply implement it for yourself. That means you could start trading profitably almost right away.
For a lot of new traders who haven't yet developed an profitable options trading system of their own, it's a great idea to let somebody else spend the time and money it takes to discover an options strategy that makes money. Then all you have to do is subscribe, enter the trades as they are published by the service, and let the system do the work for you.
It is very hard to argue which way the trend is heading if a bar chart is making a series of higher tops and bottoms. Positioning yourself with puts and calls during a trend is like getting carried up an escalator - all you are doing is going with the flow.
But if the options trading system you are using ignores technical analysis, it can make it harder to be consistently profitable because you can be fighting the trend a lot of the time. Understanding where support and resistance lie on a chart can also allow you to open positions for extra contracts in the direction of the trend. By doing this, you can compound your profits with less risk, but if you ignore technical analysis, you can be flying blind. As the old adage says, the trend is your friend, and that's the direction you want to trade.
So does an options trading system that incorporates TA work all the time? Of course not, nothing does. You are going to lose on some trades because we can never know for sure what the market is going to do. Technical analysis points us towards probabilities and all we can do is make our decisions based on those.
The great thing about trading options is that you are never locked into a position. We can always roll our options out to a later expiry, or up or down to a different strike price as we need to. That means if we get the trend wrong, we can modify our position and strategy to suit the market. If you compare that to betting on a horse, where once they have jumped, you're stuck with your position. With options, you can make changes over and over again based on feedback from the market.
So what are your choices if you'd like to become a profitable options trader, but you're not confident in your ability to pick the trend or good entry and exit points? An easy way to reduce the learning curve and get started quickly is to model a successful trader's system and simply implement it for yourself. That means you could start trading profitably almost right away.
For a lot of new traders who haven't yet developed an profitable options trading system of their own, it's a great idea to let somebody else spend the time and money it takes to discover an options strategy that makes money. Then all you have to do is subscribe, enter the trades as they are published by the service, and let the system do the work for you.
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