Open invitation to all readers: If you would like to share your story about how you became involved with options, or used options to achieve goals, or basically any personal story, please sent an e-mail to blog (at) mdwoptions (dot) com. You may remain anonymous, or use your name.
As a beginning options trader, I have made the mistake that so many of us make: real trading without real understanding. And yes, I lost money, but fortunately a very small amount. In my case I was tripped up by the release of an economic report (specifically, the PMI) that moved the stock market against my trade bias.
In truth, I could have been tripped up by a dozen other factors that I just wasn't aware of. I was disappointed that I lost money, but was more disappointed in myself for not doing my homework in advance. I should have known about factors as important as regular economic reports.
Rather than discourage me from studying trading, this experience really motivated me to learn what I need to know. Most people can understand pretty much anything with enough effort, and I needed to prove to myself that I can do this.
So the first thing I did was find out which reports are likely to move the markets, and I marked all the relevant release dates on my 2011 calendar. (BTW, here's a good source for this information: http://www.investopedia.com/university/releases/default.asp)
Then, I realized that I'd better go back and be absolutely sure that I understand the option greeks and how to use them when planning and managing a trade. I'm about 80% of the way there, and virtual trading has really helped me put these ideas into practice. For those of you just learning about options trading, please be sure to take advantage of this free virtual trading website at CBOE:
Take your time, do your homework, and have realistic expectations. You won't succeed otherwise. Also, much thanks to Mark Wolfinger for his most excellent blog and his dedication to educating others. His advice has helped me tremendously.