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Trading Options is Not a Video Game

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Perhaps the biggest problem day traders face is believing what they see on the charts, actually trusting the charts to tell them the correct direction. After a few losses, believing becomes even a greater problem, no matter what one is seeing. So how do you begin to believe what you see again?

Ever do a couple of trades, get stopped out, and after that you feel gun shy when you go to hit enter again? This is a common problem for all traders -- call it the "gun shy syndrome". These could be the same trades you've done day in and day out, and for whatever reason today, they don't work. Now you're gun shy.

Here's the problem...the gun shy syndrome could last a very long time. Remember when you were first learning to ride a bicycle, and you fell off. Your father said to you, get back up on that bicycle right now and try it again. If you didn't it took that much longer to get the hang of riding a bicycle. Fear of falling is very keen. Losing a couple of trades is the same thing, we just replace fear of falling with fear of losing. The problem is, you don't have your father standing next to you, telling you to start trading again.

How can we overcome the gun shy syndrome?" Here’s a solution.

Don't trade. That's correct. Don't trade. Instead, sit in front of your charts and watch. Watch intently. Watch the trends, the moving averages, the stochastics, the MACD's, whatever you are using to identify the trend. But just watch. Watch until you can see the patterns develop right before your eyes, until you can believe in what you see again.

How long might it take to before you can start trading again? Unclear. It depends on how entrenched you are in your gun shy syndrome. How many losses you had. How long it has been since you traded. It might last hours, days or weeks. There is no telling. But this undercut to trading will work.

Don't be impatient when trying to overcome being gun shy. Really make sure you know before you go. You want to be able to spot support and resistance, retracement from reversal, know when HFT's (high frequency trading robots) are present so you don't get taken out by them. It may take some time to regain your confidence. Be patient.

Most traders go through being gun shy. It is not an incurable disease, however. Just a bit of an undercut and you too can, once again, believe what you see.

SmartOptionsClub is the home of artificial intelligence Options Alert Service and Technical Trading Course. Learn to trade Options using their Options Alerts sent directly to your phone real time, with accompanying Chart Overlays you can view on TradingView.com charts.

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