Tag Archives: trend trading

How To Use Technical Analysis As Part Of Your Options Trading System

Options Trading System Technical Analysis
Options Trading System & Technical Analysis

If you are using an options trading system that doesn’t incorporate at least some basic technical analysis, you could be missing out on some very reliable signals for trade entries and exits. Understanding TA can also take a lot of the guess work out of trading the Options market.

It is very hard to argue which way the trend is heading if the index is making a series of higher tops and bottoms on our chart. Positioning yourself with puts and calls during a trend is like getting carried up an escalator – all you are doing is going with the flow.

Options Trading System – TA + Trend + Options = Profits

But if your options trading system ignores technical analysis, and you are fighting the trend, it makes it harder to be consistently profitable, regardless of whether you’re a buyer or a writer of options.

Following a trend and understanding support and resistance can also allow you to enter positions in additional contracts as the price rises or falls. This lets you compound your profits with less risk than if you ignore technical analysis completely. Always remember – the trend is your friend, so that’s the way you want to trade.

So does an options trading system that incorporates TA work all the time? Of course not, nothing does. You are going to lose on some trades because we can never know for sure what the market is going to do. Technical analysis points us towards probabilities and all we can do is make our decisions based on those.

The beauty of options is that we can always roll out, up or down as required, so if we get the trend wrong, we can adjust the strategy to suit the market. Compare that to a horse race, where once the race has started, you’re stuck with your decision.

Options Trading System – The Best Option For Fast Results

So what options do you have if you’d like to trade options, but you’re not confident in either your technical analysis or trading ability? A great way to cut down the learning curve and become a profitable options trader is to ‘borrow’ a successful trader’s system and use it for yourself. That means you could start trading profitably almost right away.

For many traders, it makes sense to let somebody else spend the hundreds of hours and thousands of dollars it takes to learn options an options trading system that makes money. Then all they have to do is follow the trades as they are announced and get on board.