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Is Option Trading Gambling?
We have seen it way too often, haven’t we?Advertisements that tout making thousands of percents in profits within days andmillionaires made within weeks, all by option trading! Such advertisements usually drawhordes of hungry, indebted gamblers who need that “one big win” to recover their debtsor losses elsewhere to their unusually expensive seminars.95% of those who walked into such seminars, paid for it and actually traded options, lostall their money. 3% will make some money within the first few trades and then lose it allsubsequently. 1% will really make some sustainable money and a final lucky 1% willmake the 1000% a month on their first month (again, just to lose it all within the nextmonth). Anyone who has been in this predicament usually think that option trading isnothing more than just a gamble on an instrument that has no value of its own.Yet, many professional traders and fund managers are making a good, consistent profitfrom option trading! These professionals don’t make 1000% a month in profits, neither will they ever, but they continue to make a living in the markets month after month, year after year (me included)!So, what makes option trading a real investment and trading activity to these professionals and a mere gamble for those who lost all their money attending optiontrading seminars?The difference is in ATTITUDE. Attitude governs decisions and actions. Anyone whoapproaches option trading with the “get-rich-quick” attitude will also soon findthemselves “getting-poorer-quicker” simply because these punters hoping to “make-it- big” on their next trade, totally rejects any semblance of a trade management strategy,totally cast aside sensible analysis in favor of a 50/50 “bet” and take totally senselessout of the money(http://www.optiontradingpedia.com/out_of_the_money_options.htm) positions with ALL their money and either make it big or expire completely worthless!A realoption trading  professional utilizes sensible money management strategy on every trading opportunity, weighted against the potential risk of non-performance. This meansthat a real option trader will never put all his money into one big out of the money position! A real option trading professional utilizes trade analysis methods based on proven methodologies so as to put the odds of performance in their favor and never treatevery trade as a 50/50 bet. A real option trading professional calculates the amount of options leverage to be used on every trade so that his portfolio is never over-leveraged. Areal option trading professional do not expect to make it big on his next trade and he isnot aiming for one huge home run but a series of small wins that eventually adds up. Areal option trading professional never allow one loss to wipe out his portfolio because hetreats the market with respect knowing that no matter how much analysis has beenconducted, there is always a chance that the market will work against him.
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