If you want to improve your options trading skills this year, you are in good company, notes Bob Lang of ExplosiveOptions.net.
Around the start of each new year, I take inventory of my own skills so I can become better at trading and investing. Even after decades of being in the business, I do not pretend to know or be an expert at everything! Options and technical analysis are complex. I am always learning more.
Three Ways to Improve Your Options Trading Skills
Study the Technical
Do you pledge you allegiance to technical analysis? As a technician, I do too, and I am constantly studying the various indicators out there.
My number one piece of advice is to watch how they interact with price action. For example, does MACD roll over before or after price moves? Are volume statistics relevant? Which momentum indicators give you a good read on what the price is telling you?
By watching the indicators versus price action, you will be able to interpret price action in a factual way and unlock answers about trends and, therefore, trades.
Between blogs, newsletters, and books, everyone from beginners to experts have a ton of options (no pun intended). I read constantly, because not only do I not know it all, but no one else does either. We are all learning more each day.
Call me biased, but I highly recommend the second edition of Know Your Options, which was just released. I co-authored it with my Editor, Monika Jansen, and it is packed with charts (many of them new) so you can learn what technical analysis looks like first-hand. Plus, it’s the only book on the market the covers technical analysis and options trading for every level.
At the end of the day, to become better at something you need to do it. Trading is the best way to hone your technique and make better decisions. If you’re not ready to trade with money, trade on paper until you get more comfortable. And remember, you don’t need to learn everything at once. Trading and investing is a journey, not a destination.
Learn more about Bob Lang at ExplosiveOptions.net.