Are you a directional trader? If you answered yes, then Options trading can be an ideal way for you to play the markets as opposed to stocks or futures. When you trade options, you get the flexibility of specifying the maximum loss you can stomach upfront; you can even define where you want your options traded at when it expires.

Options trading provide the investor with unmatched advantage not available to other investment vehicles.  This is because option contracts offer the flexibility of placing bets on very definite market outcomes. A good example is that an options trader can place a bet that in 7 months time a particular stock will appreciate or depreciate in value - a two way bet per see.

Should the stocks trade between the forecasted price range in 7 months, the trader loses a preset amount. This options strategy is known as long straddle. Options contracts offer huge leverage. In America, 1 option contract is equivalent to 100 basic shares. In Australia, 1 option contract is sold in multiples of 1000 times the basic commodity or stock.

This means that even with a small grubstake in dollars, an options trader can manage huge stock position. The leverage factor makes options trading very risky for the newbie investor because losses as well as gains are greatly magnified when leverage is applied. As an options buyer, the biggest advantage is that you cannot lose more than your initial account equity.

Options trading allows the investor to gain from every move in the underlying asset - whether up, down or sideways. An options trader can easily participate in the stock market downtrends by purchasing a put option without the risk of margin calls prevalent in Forex by simply shorting the underlying stock.

It has been said that trading options could be less riskier than trading stocks. In order to trade options, you have to open an online options account with an execution only broker. Ensure that the broker offers online options trading, then you can practice trading call options for stocks you anticipate to rise in value, and purchasing put options for stocks you anticipate to fall in value.

Once you become completely familiar with options trading, you can advance to more complicated options strategies.

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Share trading presents a very unique opportunity to make money within a short timeframe. Making money from shares requires that a trader keeps in mind the following essential points.

1.    Research on the target company.
You’re advised to thoroughly research the company you intend to purchase shares from. Research should be done some time before you purchase the shares. Your background research should be founded on factors such as the target company reputation, market capitalization, Market share, and financial results. This information can be easily obtained from the company audited financial results either straight from their website or from financial magazines and newspapers.

2.    External factors that may directly affect the share price.
Making money from shares involves keenness in identifying those factors that have a direct effect on the share price of your target company(s). Share prices are usually depended on a number of external factors and which cause prices to fluctuate on a daily basis. These factors play a huge role is determining the demand for particular shares. External factors like political instability, financial results, scams, and more, can have a big influence in share prices thus warrant attention when investing in shares. Company mergers, management change and acquisitions are also factors to be closely observed.

3.    Timely decisions.
Making the right decisions at the right time is the secret to success in the stock market. Avoid impulse trading and instead focus on objective trading based on empirical data obtained from your research of the market. Impulsive trading could adversely affect your success as a share trader. Impulsive trading always results to losses. Be patient until the time is right to purchase the share at a price you deem appropriate.

4.    Learn the risks.
Shares like any other form of investment presents some risks that any serious trader has to be aware of. Risks associated with share trading are especially high in appreciated markets. Most shares maybe overvalued, hence a decision to purchase shares of a particular company should involve comprehensive study of the said company’s background.  Some of the things worth study are the company’s future plans, products potential etc.

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The popularity and lucrative nature of the stock market has attracted many investors to it, the emerging problem is that most newbie investors usually fail in their trading careers due to lack of knowledge necessary to trading shares successfully, to be a successful stocks investor; one has to learn about share trading from the basics to the advanced, while honing their skills with adequate practice.

Trading shares may seem overwhelming from the onset; especially to the unaccustomed, but the truth of the matter is that you don’t necessarily need an advanced degree in economics or mathematics to learn about share trading. Share trading requires a person who is smart, competent and instinctive, the last factor is especially important because successful share trader requires plenty of it in locating the right purchase at the right time, stock market trend familiarization, identifying good companies to invest in.

There are plenty of trading courses being offered on the internet and a wannabe trader has to know the course that suits him best. Here are some questions that an inspiring trader must answer before buying into any share trading courses on offer;

a)    Do I want to trade stocks or options?
b)    I’m into futures trading or stock options?
c)    Have I considered futures options trading? If yes, then what index and equity options have I considered?

It’s also prudent that an aspiring trader familiarizes him/herself with the various trading styles prior to deciding on a trading course. This will enable the trader to gauge whether the said course sufficiently addresses their needs or not.

Trading courses teach you how to become successful in learning about share trading and realize positive returns from it. Hence share trading courses involve a diploma in share trading and investment and also a higher diploma in the same line.

As a newbie trader, it is important that you select a trading course that fully addresses your trading needs. Beware of course vendors selling so-called “advanced” trading courses that promise magical techniques and instant ways to garner profits from the markets. Remember that you have to master the basics and build your foundation before you venture into fancy and advanced techniques.

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