The first step is to understand how the stock market operates, particularly in terms of how underlying instruments relate to options, and to understand the equity market, which will bear heavily on your options trade. Once you are familiar with fundamental and technical analysis, you can shift your focus to reference books dealing more specifically with the options market. You should also create a trading diary to monitor and review your performance daily or weekly. You have reached a point where you know the mechanics of an options trade, but you need to figure out what you are doing right and what you are doing wrong.
Athletes record their performance to keep track of the effects of various training techniques.
Like a professional athlete, you should keep a diary of your successes and failures so you can focus on improving your results. Your primary focus should be to expand your understanding of your own psychology in order to better manage the more complex aspects of options trading. As an advanced option trader, you should target specific aspects such as options volatility, options strategies and market timing techniques by developing your own trading systems. Inc. All Rights Reserved.