There are several way to control or manage your greed. These are the following ways...
Systemize your trade
- Set your profit target even before you went into a trade. Put stop loss to protect your losses and let it run automation.
Take profit off the table and Let 1 run ...
- If you have more than 1 contract and you are in a winning position, Take profit first and let 1 or 2 of your contract to let it run. At least if the trade turn against you, you wont be losing.
Being the Third person
- Ask yourself question. What will the Gurus do ? what will the professional do ?
I sincerly hope that the above methods will help you to do well in your trading when greed slowly creep into your brain.
Subscribe to:
Post Comments (Atom)
2 comments:
Hi :
Nice blog you have.
I've learned the hard way that with options, you cannot let your profits run too much.
Once you've reached your profit target with options, it's better to close the position while the premium is still rich with the stock trending in your anticipated direction and that time decay haven't kicked in.
I have traded a LEH put last month amidst the sub-prime woe sentiment and my option could then fetch a profit of $300.00.
But because I thought it was a Sep option and I could hold on longer, I did not take my profit off the table and I think you've guess it, the winning position became a losing position and I cut my position immediately when the option returned to my break-even price level.
So, don't let your profit run too far with options, unless you are super confident that it has a long way to trend in your anticipated direction. But who can predict such movement in such a volatile market environment now?
Take care,
Tony Chai
http://options4u.blogspot.com
Its important to manage greed to become a successful trader. Its the factor that helps a person to make big profits but excess of this elements can spoil the mind and reduces the ability to think which option is better. Thanks for suggesting so many easy way to control the greed.
trading options
Post a Comment