Make Your Trading a Business
The vast majority of individual traders treat their trading like a hobby. They dabble in it when they have time. They trade tips from friends and acquaintances. They love to tell their friends about the big gain they made buying puts when Martha Stewart went to prison. But they don’t have a trading system or a plan. No rules or techniques have been developed to manage the risk of the portfolio of trades. In fact, many of these traders like it just that way; they enjoy the excitement—they are gamblers.
Now is the time to ask yourself the hard question: Do I really want to make trading stocks and/or options a personal business, and perhaps even grow it to the point of supporting my family? If the answer is yes, then the rest of this chapter is devoted to the tools and ideas necessary to convert your trading from a hobby to a business.
We all have a tendency to jump into any new activity wholeheartedly. In this instance of learning how to trade delta-neutral strategies, you will be best advised to jump into the study and paper trading of these strategies with as much time and energy as possible. However, take the actual live trading with real money much more slowly—and this advice is just as relevant for the student with $25,000 in his trading account as it is for the student with $500,000 in her trading account.
Trading options is not rocket science, but it is more nuanced than it might appear at first. Your learning curve ...