Profitable Option Trading

This is why news on stocks or earnings reports don’t tend to have any impact on a stock. It was already factored into the price. This means if you want to make money all you need to know is whether the market is moving up or down and how long it’s been doing it for. Trends and reversals are stronger indicators than news.
2. The trends are the backbone of good investments. It’s where all the profit or loss stems from. To be clear, a trend is a long term view. No commodity does up everyday nor does a commodity go down every day. As indicated, the internet has created a boon in trading. So when a commodity goes up, some profits are almost always taken. This will usually cause the commodity to retrace a bit for a day or two, but it may still be on an upward trend over weeks. 3. Buy low-sell high. This is a myth about the market. To profit with options one needs to make good investments which can leverage the trend. A commodity can trend up, down or sideways. If you are buying low and selling high, you are only leveraging one of 3 patterns to profitability. Buying high and selling Low can actuality be more profitable than the myth. This is because prices tend to fall faster than they go up. Finally, a flat trend provides a excellent opportunity for almost guaranteed investments by doing both Buy low-sell high/Buy high- sell low at the same time.
4. What goes up must come down and commodities are exactly the same. The trend will change and as indicated earlier, the price can come down even in the middle of the rising trend. This is not a trend reversal but simply a drop in price. As a rule the more it moves up or down the more extreme the move will be. Another law of physics that applies to the market, is that a commodity at rest tends to stay at rest and a commodity in motion tends to stay in motion. A commodity that is trading in a flat trend will continue to trade flat and a commodity trading in an upward or downward trend will tend to continue that trend until something affects the trend. It is not important what the something is only that you recognize the trend has changed.
5. The only real thing about commodities is the underlying price of the commodity and the expiration date of any options you are trading. If you are planning to make good investments then you have to invest by mirroring the commodity itself. The corrections seen in the market are always right so follow the lead. Don’t try to anticipate price. Let the market tell you what the trend is.
6. Discipline is key and without it you will not be able to profit with options. As the Gambler song says, "know when to hold them and know when to fold them". Sometimes you do have to cut your losses (this should be part of your trading plan before you even make the initial investment), and sometimes you just need a little adjustment. You don’t want to have to guess price as that will tend to lead to larger losses.