7 Methods to Improve Your Options Trading Today

Here are 9 actionable steps you can start today to improve your options trading.

1. Study and Master Options Trading Fundamentals

It is important that you know the basics of options before you attempt out and learn common to advanced options trades. It's the order in life. It's the reason why we study how to do primary math and subtraction before we go into division and multiplication.

You want to know everything about "puts" and "calls" -- from how they act and when it's best to use them. This also involves knowing everything related to them like expiration dates to where they are found on basic option tables. Skimming over the basics to get into more advanced trading is simply playing.

2. Read Books on Options Trading

Technically, they don't have to be all about options trading since there is overlap in every investment book. The purpose is to study different methods of trading the market. You'll study about things you have not understood about before and you'll even be able to improve your original trading policy.

One excellent takeaway from reading books is that you can also study more about the deep trading factors you don't see every day like investor psychology or market psychology. Did you know that these psychologies are the purpose why technical analysis exist?

3. Streamline Your Technical Analysis

If you are looking at 6+ more technical signs and use many technical analyses theories against other technical analyses theories, then you're probably doing yourself damage.

Simply study and use the basics like MACD, support/resistance, trending channels, divergence/convergence, and moving averages.

4. Continue to Paper Trade

Just because you are trading real money it doesn't mean you want to stop learning and trying out different policies. You have to continue playing the market from all angles. If you are a market follower (you tend to go with the trend), you can try a contrarian policy. If you normally close out credit spreads, try keeping one open while legging in an OTM put option.

5. Choose an Options Trade That You Love and Master It

An excellent way to increase your options trading is by learning a bread and butter trade. Study all the ins and outs of your method by back-testing historical data, testing current conditions using paper trades, and reading about your favorite trade in books.

When you fully know the difficulties of your go-to trade, then you'll be ready to better recognize situations and markets that your trade will grow in. In turn, you'll receive a higher chance of success and profit.

The key is to stick to a basic trade like an iron condor or credit spread. No advanced layered trades.

6. Stick To Your Trading Plan

All successful traders have a trading plan. This means they have the policy to get into a trade, make changes, and exit positions based on SPECIFIC events. Successful traders DO NOT make random decisions. Everything they do is determined, measured, and investigated.

You can make an easy-to-follow trading method based on technical analysis if you want to as well.

7. Ready For Opportunities

This is a large problem for beginner traders. It was even a problem for me if I started trading. I would have some stocks on my watchlist that I wanted to get into, but acknowledged it wasn't the right time. And then when I'm not looking the stock gets off. On some occasions, I have chased stocks that eventually turned against me.