To The Moon

Here's how you can increase your chances for success in optionselling ... treat it like a business. A good business needs a plan. A good business plan for optionsTrading has 4 key elements.

1. Sufficient initial capital. There is no specific rule about the amount of capital required to start trading. However, capital must be sufficient to withstand losses during the learning phase. Capital devoted to trading is risk capital ... keep it separate from your emergency savings, long-term investments, or savings for a home purchase or other family/life needs.

2. A plan for managing initial capital. Manage your capital by dividing resources into small enough units so that one losing trade or a short series of losing trades will not impair your ability to continue trading.

3. Adequate time allocated to execute the plan. Keep current with market conditions and know whether those conditions are about to signal a trading opportunity. Plan your schedule to include the time necessary to get the information you need to make a sound trading plan. Be consistent in your trading preparation and planning.

4. A realistic profit target. A realistic profit target gives you something to shoot for, and it gives you a great sense of satisfaction if the goal is achieved. Beginner traders should set lower goals than experienced traders. Over time as you become a better trader, the profit target should increase both in absolute terms and in percentage terms. Although each trade should have a specific profit target, the profit target of the trading business plan should be set for a series of trades (such as 10 trades) or for a period of time (such as 6 months). Setting a profit target is subjective ... think about how much, realistically, you hope to make, and make sure every part of the business plan is consistent with supporting and achieving that target.

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