If you trade options part time or full time, and you don't have at least a basic understanding of technical analysis, you're probably missing out on a lot of very profitable trades. The fact is that understanding technical analysis can help you to take a lot of the guess work out of your options trading, meaning you'll have a chance to become a much more profitable trader.
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 beauty of options is that we can always roll out, up or down as required, so if we get the trend wrong, we can adjust the strategy to suit the market. Compare that to a horse race, where once the race has started, you're stuck with your decision and there's no way you can modify the position - you just have to live with the outcome.
So what choices do you have if you'd like to trade options, but you're not confident in either your technical analysis or trading ability? A great way to cut down the learning curve and become a profitable options trader is to 'borrow' a successful trader's system and use it for yourself. That means you could start trading profitably almost right away.
It really makes sense for new traders to let somebody else spend the vast amount if time and money it takes to learn an options trading system that actually works and makes money. That way all you have to do is take the trades as they are called, and enter the positions to get on board.
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 beauty of options is that we can always roll out, up or down as required, so if we get the trend wrong, we can adjust the strategy to suit the market. Compare that to a horse race, where once the race has started, you're stuck with your decision and there's no way you can modify the position - you just have to live with the outcome.
So what choices do you have if you'd like to trade options, but you're not confident in either your technical analysis or trading ability? A great way to cut down the learning curve and become a profitable options trader is to 'borrow' a successful trader's system and use it for yourself. That means you could start trading profitably almost right away.
It really makes sense for new traders to let somebody else spend the vast amount if time and money it takes to learn an options trading system that actually works and makes money. That way all you have to do is take the trades as they are called, and enter the positions to get on board.
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