Option picks

My brother has been dabbling around in options trading over the last few years. He has succeeded in making a fair amount of profit from option picks. The same doesn't hold true for me, though. I think I am the most unluckiest person in the world when it comes to buying and selling stocks. I barely rake in a profit at times, but more often than not, I tend to lose my money. I have burnt my fingers countless times.

My brother tells me it is because I am making the wrong decisions. I guess I am just not knowledgeable enough about the bulls and the bears. Moreover, I am making my decisions the wrong way as well. He says that my decisions seem to be based more on my impulses or guesswork. Instead, the right way to go about it is to study the many variables that go into selecting OPTION PICKS. For example, first decide what your expectation is for the underlying stock movement, and then select a stock option trading strategy that suits that market outlook. You have to be able to identify which stocks are moving or which ones are about to move. Moreover, which stock is ready to “pop” or “drop.” Then you need to do your homework to define your profit (and loss) zones and decide if the trade is really worth getting into.

Homework also involves analyzing the same stocks over a long period of time. This lets you develop a feel for how they usually react to different market conditions. On that basis, you can then pick a stock option trading strategy that might work at the current time. This is much better than trying to first pick a strategy, because in that case you have to search through many stocks to find one that is in the right trading situation right now for your chosen strategy.