Familiar territory for us.
For the last few months we are losing money by the bucketfuls. Leave aside the thoughts of becoming rich, all our attention is focused on to somehow break that sequence of continued losses.
The question about becoming rich was asked on Quora and I chose to answer it.
Sharing that answer here with the readers:
Why do people not become rich through Options Trading ? :
The theme for today is getting rich.
The route taken is Options Trading.
And the question is why people do not become rich through options trading.
How many people can be classified as RICH in the society around us?
Not more than 1%.
That means 99% of the people in the world are NOT RICH.
And all these people keep on doing something to earn their livelihood.
There are laborers, handymen, small traders, small businesses, people in low paying jobs, people in high paying jobs all earning something and spending something but not achieving the tag of being RICH.
Then why expect Option Traders to become rich as if these traders are divinely ordained to get that status.
Trading in options is just like any other activity which either makes money or loses money.
In stock market trading ( of any type —- equity, cash, futures, options ) , about 90% of the traders lose money. The other 10% who manage to get some profit do not necessarily become rich.
For becoming rich, your expenditure has to be less than your income month after month for many years and one needs a source of passive income. Trading income is not passive income. If at all one gets any income from trading, it comes through lot of skill, hard work and some luck.
Readers know that I am an Options Trader.
I post my trades on my blog OptionNext .
The trades are based on a method which kept working very well from May 2018 to August 2019.
Then the losing months of September, October, November and December came in succession and took away a big part of previous profits.
Still, overall position remains good.
A profit of Rs. 710548 on a capital of Rs. 200000 over a period of 20 months. The details are here:
Getting rich should be the aim. We shall be happy even if we achieve some part of the goal. The first step is to become a good and profitable trader.
Most of the options traders fail at this first step itself.
To achieve success in trading one has to set out with:
Having the belief in your methods.
Having knowledge about trading.
Having knowledge about yourself.
And some luck to get it right most of the time.
Once a trader sets out on a journey to profitability, the journey to become rich commences. One may reach the goal or not but the journey shall surely be enjoyable if profits keep on coming regularly.
Getting rich is an aspiration, being profitable is a choice. We can work on the choice. Fulfilling the aspirations is left to destiny.
Let us focus on what we can do. That should serve us well.
Thanks for reading.
Enjoy the holiday today.
Be back tomorrow for Monday trades.