The very idea of option trading for a living is appealing in itself. It conjures thoughts of sacking your boss, working (if you can call it that) from home, making a few decisions each day and watching the profits roll in while you enjoy the lifestyle of your dreams.
Anyone ever put it to you like that?
Very appealing isn't it!
But it's not reality.
This doesn't mean that it can't become reality for you - it's just not as simple as some people like to present it ... and they're usually the ones who want to sell you something.
Some Essentials Before You Start Option Trading For a Living
Like anything worthwhile in life, option trading for a living requires a number of essential things. You need to have a plan, a trading system that matches the amount of trading capital you have. This plan should include a minimum gain per successful trade and a maximum loss per losing trade. It should also include position sizing, i.e. how much, or what percentage of your entire trading capital, you will risk on any one trade. You need to decide whether your trading style will be more speculative or longer term strategically focussed.
You should also know what methods you will regularly use to assess the future price direction of the underlying stock, commodity or index that your options are derived from. Will it be a "fundamentalist" approach - based on company reports and management? Or will you be a "technical analyst" - looking at charts for price patterns?