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Trading, in my opinion, is the greatest profession anyone can hope to undertake. It is one of the only careers that is anything but repetitious and mundane; where every day is a new adventure because the markets are ever changing and evolving. Once the trader reaches a certain level of competence, he or she can literally set their own hours, take a vacation as often and when they like, and work as hard (or soft) as desired.

Trading is the only avenue of earning a living that I know of where you ALONE determine your own income level. Any other profession, such as owning your own business, has inherent limitations based on market share, economic cycles, customer base, etc. NOT TRADING. I know of traders who set a goal like $300,000 per month and then go after it. It is amazing how even though the unexpected comes up and they miss their goal from time to time, other times they exceed their goal, and at the end of the year they usually have exceeded their own expectations.

Some of my friends have lifestyles that would make a rap star envious. Private jets shuttling between their homes, Ferrari collections, buying whatever they want, when they want, without looking at a price tag—that’s the modus operandi of many. One trader everyone is familiar with is the second richest man in the world, having started with around $10,000 and is worth tens of billions. Of course, these are the elite traders, but they are not in that position as a result of some magical powers or pact with the Devil. These success stories all got their by starting in the same place many of you reading this article are at right now – ground zero.

What Stands in the Way? (YOU)

First they made a decision that many of you already have made—that trading is what they want to do. The only difference between them and you is that they chose a road that was a little more difficult to trek than you are willing to undertake. You rationalize to yourself, “I committed going to this party weeks ago, I can study my materials another time.” The problem is that “another time” never is convenient. There is always that favorite television show that will take precedence over the long term.

We live in a sound-byte society where most don''t have the discipline to put aside the immediate for the long term. This being a US holiday, most Americans are out getting the beer for the “big game,” and in a week they will forget who won. They are getting the barbecues set up for the cookout with relatives they don''t care for.
I attended several Optionetics workshops over the past month and found something to be shockingly frustrating, if not all together unexpected. An informal survey of students revealed that a surprisingly small number even read their class materials. Knowledge can be equated with food, if you stretch your imagination. Optionetics can be the best restaurant in the world, bringing the finest ingredients and chefs from around the world, but if you are not willing to try something new or push yourself up to the table, then it is all for not. Trading requires a commitment from you.

The heights by great men reached and kept
Were not attained by sudden flight,
But they, while their companions slept,
Were toiling in the night.

     ~ Henry Wadsworth Longfellow
        American Poet and Writer

What They Did to Become a Winner

Some of what I am saying has been preached by me before and some of it may be new. I am not writing these articles for any other reason than to help you achieve success—that is it. I am NOT paid to be on the discussion boards, but do so when I have the opportunity to help you. Nothing would give me greater sense of satisfaction than seeing people on the boards talk about how well they are doing, and that their goals are being met. I believe with my whole heart that the more I help people, the more God shines favor on me. So call it selfishness on my part.

Three primary ingredients have to be done by you that Optionetics and I can''t do for you.

1. Conform to your personality and be honest with yourself  
2. Exercise Discipline  
3. Get knowledge

1.  Conform to your personality and be honest with yourself.

This is difficult for most people, myself included, and I only learned it the hard way. Everyone wants to buy those calls for $0.05 and watch them go to $20 ten to twenty times a year, but there is a reason why the options are trading for $0.05. They are probably close to worthless. Or you want to put everything on XYZ -red and rely on luck and favor of the market gods to hit you a homer. Or even less greedily you simply want high-risk and high-reward trades to supercharge your profits at an accelerated pace.

This is fine for a small percentage of people, but not most. You have to be honest with yourself—not about the profits you want, but rather on how much pain you can absorb if/when things do not go your way. The plain and simple truth is that most people can not think rationally or enjoy life if the trades they have are beyond what their tolerance levels set by their personality dictate.

Instead, you may want to start out slow with some of the better low-risk medium return trades available such as stock collars, time spreads, and broken winged (unbalanced) butterflies. I know of many floor traders who have made entire careers on these strategies, preferring a steady income stream to the one retirement trade.

2.  Exercise Discipline

The simple fact of the matter is that it is very possible to throw a dart at Investor''s Business Daily to pick a stock. From there you can flip a quarter to decide if you are going to get long or short the stock. If you are disciplined and religiously get out at a predetermined stop-loss and let your winner ride, you can make money. Why options, then? Because with options you can increase the odds even more dramatically in your favor, and control the risk more efficiently.

Almost everyone is afraid to take a loss because it means they don''t have a chance of making a comeback, at least that is what they tell themselves. They then take their profits too fast as they are afraid they will give back what they made. This is 180* backwards from how success works. You have to learn and get comfortable with taking small losses and letting winners run. Trailing stops can be placed on spread orders that are profitable, if it makes you feel comfortable to feel that you won’t give back what you made.

3.  Get Knowledge

This is the most important thing to a trader. Optionetics gives you knowledge, but I have been in rooms with more than 150 people where only 1 or 2 of them have actually read the materials. They go through the intermediate class 8 times, lip synching the instructor, but they never take a more advanced class. They have no other materials or books on their shelves at home, or if they do, you have to brush off a layer of dust to see if the book''s spine is still intact.

The shelves and desk area in my office is a mess. To get to my desk you have to be an Olympic high jumper. I have literally spend thousands of dollars on books over the last couple years. When I see a new book at Barnes and Noble, I just go buy it despite the $90 price on a topic I have little interest in, because if I get one thing out of it I am that much better off for it. Most books were worthless, but I had to buy them to find out. There are really only a couple that are good (see my recommended reading list).

If a man empties
his purse into his head,
no one can take it from him.
     ~ Benjamin Franklin

(Who saved millions of lives with the lightning rod he refused to patent, inventor of bifocals, water harmonica, volunteer fire departments, set up first library, first post master general, signer of the Declaration of Independence, only American who could convince France to back the American Revolution, richest American who ever lived when adjusted in today''s dollars, etc.).

Plain and simple: This is the greatest job in the world… period. I know of no other profession that has made more high school dropouts millionaires. You have no boss other than yourself. You ALONE control your destiny.

Trading does not require the education, brains and dedication that becoming a physician requires. As a matter of fact, I have seen where too much intelligence is a detriment to success. Thank God that I am not in danger of being too smart. But don''t confuse intelligence and education, or intelligence and dedication.

If you want to be a success and are willing to go to any length to get it you can achieve success. You are not trying to get into the NBA at 5'' 6”, although that has been done by men who would not let height stand in their way.

Either sign up for a new class, and/or retake, or don''t be surprised by the outcome.  Go out and make a small investment in a few books. Compared to a college education in liberal arts that may go unused in life, it is the best deal in the world. Do something different than you are doing, or expect the same results.


Scott Kramer
Staff Writer and Trading Strategist
Optionetics.com ~ Your Options Education Site
Visit Scott Kramer’s Forum 

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