Reasons why your option trades fail to make money

Indicators can be misleading although they turn up to enable us in making the most accurate decision making in the spheres of calls and puts. Therefore, making a detailed study of the company stocks and the company’s fundamentals sometimes become a key to success.

Henceforth do not get obsessed with indicators. But, it happens to almost 95 percent of the option buyers.

You can operate software tools to execute option chain features to achieve the best desired results. And, utilise the charts to form a concrete technical analytics, or candlestick analysis that defines support and resistance levels.

The rise and fall of the stock rise figures can be more tempting to invest more funds than your risk levels, all this, to get rich quickly. In short, never apply oversized positions beyond your capital capacity just to earn  huge returns, miscalculations can lead to a disastrous fall.

I would say never dream to become a billionaire overnight, let your experience go hand in hand, plan for an incremental return of 1 to 2 percent of your investment over time. That comes to about 20 to 25 percent of the annual return on the investment.

This kind of return is better than FDI that  provides you about 7 percent of the annual income over your FDIs. Hence, develop a system that can create asset portfolios in the long term , confidently.

Control Losses While Trading Option Buying:

Are you a retail trader? In case, yes, then you should follow the tips to control your option buying losses. Read out the ways to prevent money losses in Options Buying.

Try to understand the risk of leverage, impact costs, and averaging down otherwise you will lose money in the option buying segment undoubtedly.

Another reason to lose money in option buying is, like others you too may transit from trading stocks or futures to option trading. The fact is, in both the trading, the trade plans differ.

The probable chance of a buying option to go to zero quickly is high and hence you must be keen in your investment. Never, invest in buying options more than 5 percent of your trading capital.

Make use of Stop Loss technique in trading options, even if your investment is only 1 percent of the trading capital.

The buy options feature depreciation of time value and premium and therefore every extra day and weekend you hold the option positions will erode premium significantly.