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Rockwell Trading - Option Trading Mistakes You Should Avoid

When you are trading options, there are a couple of simple mistakes that can be costly..  Here are a couple of mistakes you should avoid when trading options.

No Defined Exit Plan

Emotions play an important role in trading; whether it’s trading stocks or options, you must be able to control your emotions. You must have a proper, well-defined exit plan when you start trading options. No matter what you think, and how you feel, make sure you stick to your plan and not deviate from it.

Don’t Try to Make Up for Past Losses

Several options traders have their rules that they will not buy “out-of-the-money options”, or sell “in-the-money options.” The rules are fine until you run up against a situation where a trade has moved against you. Try to avoid “doubling up” on a particular options strategy, in most cases it just does not work. Though “doubling up” can bring down the cost on a per-contract basis, it usually compounds the risk.

Trading Illiquid Options

When trading in options, always make sure to check the bid price and the ask price. Many times, the ask price, and the bid price do not reflect the true worth of the option. The “true” value of the option might be between the ask and bid price. “Liquidity” means that there are active sellers and buyers in the market.Liquidity helps bring the asking and bidding prices together. When there are no active buyers and sellers, the gap between the ask and sell prices will widen, which results in illiquidity. Trading in illiquid options might not be a very good idea for beginners because there needs to be a significant move just to make up for the spread. For more info:

Library, Rockwell Trading

Among the various services that Rockwell Trading provides for its customers, they provide members with a comprehensive library that is a deep well of knowledge that has helped many traders in their quest for practical strategies and trading tools. This library is known as the Rockwell Trading Club and it features training materials that include both basic and advanced topics. These materials include methods for trading stocks, futures and commodities.  Within the club you will find online training classes, up-to-date trading strategies which are proven to work in current markets, and a library of educational videos and resources. From beginners to the very experienced this database of information has helped many to be as successful as can be and its comprehensive nature has proven to be a tremendous asset to those that are participants in the program. There is a very popular section within the library which contains some of the latest strategies in the market today and covers information about the hottest trends in day trading. At the root of this program is a dedication to putting only the most pertinent information in the hands of customers without overwhelming them with extraneous and historical elements. It is all based on efficiency and getting information into people’s hands which will deliver the best and quickest result possible.

Rockwell Trading - E-Book

Rockwell Trading founder Markus Heitkoetter released an e-book, The Simple Strategy, in 2013. Since then, the book is the highest-selling title in its category. The book is perfect for both beginners and for those looking for a fresh way to approach day trading.

 The Simple Strategy e-book provides an easy to understand trading strategy with clear entry and exit rules.

•    Entry Rules. The Simple Strategy offers simple rules for entry, so there is no second-guessing or confusion. For example, if the MACD is below zero, don’t enter—wait until it reaches acceptable levels. If the RSI is below 70, don’t enter. These concepts are explained in detail in the book along with the rationale behind it.

•    Exit Rules. The Simple Strategy offers specific instructions for when to exit an investment or trade. The book teaches readers when to exita trade even before the trade is placed.

•    Take Advantage of Short Trends. Trends are by nature fleeting. The best way to take advantage of them in the trading world is to take advantage of the small intraday trends that fluctuate so much in today’s trading market.

•    Basic Charting Abilities. One of the best things about The Simple Strategy and Rockwell Trading in general is that you don’t need sophisticated charting software to take advantage of the concepts taught in the training materials. All you need to implement the simple trading concepts into your overall trading goals is basic charting software. There is no need to spend money on expensive tracking programs.


Make a move, Rockwell Trading

The world of day trading is a fast-paced and ever changing. An innovative company out of Austin Texas called Rockwell Trading has designed their services to help traders use strategies and tools that will digest market moves and find opportunities in all types of markets.

It is very easy for new day traders and even those that are experienced to get mired in research and stuck in their trading charts. This is often known as “analysis paralysis.” There is a saying that says time is money and it couldn’t be any truer than it is with trading. The tools and strategies that Rockwell Trading offers helps traders find their way in markets that can be paralyzing. These resources are easy to use and are perfect for the trader of any level.