1.) Remain Calm at all times
Option trading can be leveraged. With leverage, every tiny movements on the underlying asset could amplify the effects on your P/L. What looks like a small movement in the underlying can magnify the price of an option. In times like these, a successful option trader remains calm no matter what the current trading value says. Very often, amateur option trades exits a trade when they witness 50-60% of the value of the option disappear due to such whipsaws. It is important to assess your trading plan when a particular stock is challenging your position.
Most people treat the stock market like a place you could go in and withdraw money at will. There are seasons where professional traders can make a lot of money and there are seasons where they scale back on their trades. A professional trader knows when to Scale-in on high probability setups and wait for the trade to pan out in their favor. Amateur traders rush in a trade everything that moves even if market conditions are too turbulent.
Successful option traders are systematic in identifying trading opportunities, systematic in trade and portfolio management, systematic in execution of every trade, systematic in placing stops, systematic in planning the exits of every trade, and systematic with loss recovery. Unsuccessful option traders will have bad trade management , finding themselves racking up huge losses and making tiny profits all the time.
Successful option traders are highly disciplined sticking to their trading plan with pre-determined stops, entry and exits. With this clarity, they stick to their trading plan with conviction no matter how good or bad their current position is doing. In other words, they are not letting fear of loss and greed for profit alter their trading plan.
Most traders jump from strategies to strategies without focus. Here goes the saying , if you chase two rabbits, you will not catch either one. All option strategies take time to produce results. Therefore, a successful trader is focused on the larger picture of focusing on the execution and investment objectives. More importantly, executing the sensible strategies that fulfill those objectives.