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Hi there investors. I hope I find you doing well today, and that your portfolio is seeing consistent returns. This article on successful option trading is number two in a series of six. Each article is accompanied by a video, and I highly recommend you to watch them all.

Back testing is one of the greatest things that you can ever do as an options trader. Now this task can be rather tedious especially with the software that is offered on the current market. The most popular software out there is Optionvue and the other is Think or Swim, the latter being a brokerage. Now in both of these software packages it takes hours and hours of manual labor to produce back testing results. Recently, San Jose Options has released their new back testing tool called the Options Toolkit. With this software we can turn hours into seconds. If your time is valuable to you, then I would highly recommend this software over anything else on the market.

For instance, I used to spend several hours using other options analytical software to back tests stocks over earnings release dates. I was able to find some winning trades; however, the work was so tedious and boring that I did not have the patience to back test 4000 stocks. Now, with the new San Jose Options back tester, I can turn days in into seconds with the single click of a mouse.

Another step that each option trader must take before finding success is simply trading for many years. Experience is what we call it. The reason that an option trader needs to trade for so long is because the stock market is constantly changing, and in order to see the many faces of the market, we need to trade for many years.

Paper trading is also a great way to learn how to trade options. Again, you can simply open an account at Think or Swim or almost any of their options broker and get a free paper trading account to practice with. Although it might be difficult, it’s actually very important to paper trade for at least six months to a year. As mentioned before it’s very important to have experience over time, and paper trading is one way to acquire experience without risking any money.

In the last part of this video we discuss why it’s important to keep about 25% of your money in cash. Good option traders know how to make adjustments, they know how to lock in profits, and they need this money to do just that. It’s never a good idea to use up all of your capital in your trading account. This can lead to serious problems. So again, if you want to become a good option trader, then leave plenty of money in cash so you can always do what you need to do.

To Become Successful with Option Trading go to the San Jose Options Course at www.sjoptions.com