GREED IN OPTIONS TRADING

Written by C Hun

Last week’s trading was like a roller-coaster ride but very fruitful at the same time. Not only did I made some money from options trading but along the process I also discovered how we can learn from the trading process and take control of our own emotions at that time.

Greed is one of the reasons why some people always fail in their life because they do not know how to control it.  Well, I faced the same problem few days ago when the counter (Goldman Sachs) that I entered moved up and down so fast.  The anxiety I felt during that time made me loss my focus during the trading hour.  When I realize that I was too anxious during that time, I decided to exit and just take a break.  Well, I made about USD400 for that trade.  I was happy with what I achieved but at the same time I also learnt that I could have made more when the price touches the price I anticipated earlier.  However because of my greed, I lost my focus and did not set my profit limit.  And I ended up having to sell at a lower price which is half of what I should have made.

After that trade, I felt more confident.  It let me to more winning trades. I was able to make about USD100 within a few minutes of trading in volatile counters for the day.

So remember to be focused when you are trading and do not let greed take control over your emotions.  Also it helps to have trading buddies when you are trading. You need friends with the same positive mindset to share and discuss and also to bring you back in line when you go off the track.

Happy Trading!