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Many claim it’s a cinch to earn money by trading options – practically guaranteed.
Are they telling the truth?
earn money, trading options
Your post reminded of two quotes on easy money. I think it was Damon Runyon who said that “The worst thing that can happen to a young man is to have him win his first bet”.
The other quote that applies is something my dad always said to me if I tried to take a short-cut: “The only place where success comes before work is in the dictionary”.
As much as I hate to see traders lose, getting off to a great start often leads to portfolio-killing overconfidence.
Thanks for sharing.
great post and it is a great reminder that there is no free lunch on wall st and if it looks to good to be true it is. These hypsters never get into position sizing , money management , and capital traded. I have read on the internet and even on your blog where traders with 5k to trade are trading 5 lots in the rut or spx and getting completely decimated. I think often position sizing is the most overlooked tool for money management. There is this “swing big ” mentality that often gets traders crushed instead of managing risk with position size over time. I have found that to be invaluable.
I’ve been saying that position sizing is the easiest and most important part of risk management.
However, when it’s going well, the idea of sustaining a loss does not occur to the beginning trader, who frequently goes ‘all in’ – probably without realizing the potential loss.
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