Good morning, traders…
Jeff here.
Trading options is just as much about controlling your emotions as it is about managing your trades.
The real struggle often isn’t with the market — it’s in your own mind. The difficult part is knowing what to do when you’re actively in a trade…
Every trader faces the tough choice of when to sell, the fear of adding to a winning trade, and the emotional ups and downs that come with each trade.
And in a historic market bubble, like the one we’re in now, understanding the mental side of trading is more important than ever.
It’s about making smart decisions that match your trading plan, not your feelings in the moment.
By staying disciplined, you can potentially have massive success in the options market. But if you let your discipline fall to the wayside, you’ll pay the price dearly.
Today, I’m going to share three tips to help you manage your live positions…
Letting Winners Ride
One common problem traders have is selling too soon, often before hitting the target they set in their plan.
The excitement of seeing a profit, mixed with the fear of losing it, can make you exit early.
To fight this, think about taking partial profits by scaling out of your trades.
Selling part of your position, like 50%, when you’re in the green, lets you lock in some gains while still staying in the trade.
For example, if you’re up 100% on an options trade and you sell half of it, you’ll secure your original investment while “playing with house money,” so to speak.
This approach can ease the stress of deciding whether to hold or sell, which is why I send my Burn Notice Alliance members alerts when I start exiting a winning trade.
To protect your gains, move your stop loss to just below the level where you took your first profit.
Avoid placing your stop loss at obvious numbers like round figures, since that’s where many traders set theirs. Instead, place it 10-20 cents below those levels.
Adding to a Position
Many traders hesitate when it comes to adding to a winning trade. The fear of losing profits or buying at a bad price can be overwhelming.
But remember: The goal isn’t to be perfect — it’s to make money.
You don’t need to hit the exact top or bottom to be a great trader. Trying to do so can actually lead to big losses.
Adding to a position should be about increasing your exposure to a good trade, not catching every price move.
That’s why I created my 1-3 star ranking system for the Burn Notice Alliance. When I add a star, it means I’m adding to the trade.
There’s no mystery – I’m transparent about when I’m adding to my positions.
But when you add on your own, start small to build your confidence. You can always add more if the trade goes in your favor.
Being flexible, taking profits, and re-entering can help you grow your position with the trend while managing risk.
Live Trading Emotions
The emotional highs and lows of options trading can be intense.
To succeed in the long run, you need to keep a level head during these emotional swings.
Getting too excited over wins or too upset over losses can mess with your judgment, leading to bad decisions.
Remember that trading is a long-term game, with wins and losses spread out over time. Treat each trade as part of a bigger plan.
If a losing streak starts to hurt your mood, try reducing your position sizes and holding times significantly. Shrink the game.
Trading with just 10% of your normal size can help you focus on the process rather than the outcomes and can limit your losses during a rough patch.
Success in trading often depends on how well you can manage yourself.
By taking partial profits and securing gains, you let your winners run without leaving everything to chance.
Adding to a position isn’t about being perfect but about taking advantage of clear trends.
Above all, managing your emotions and adjusting your strategy during tough times will help keep you in the game.
Trading is a marathon, not a sprint. Stick to the process, and the results will follow.
Happy trading,
Jeff Zananiri
P.S. There’s a SECRET trading opportunity right now that 99.9% of the market is sleeping on…
Wall Street institutions are mispricing trades daily, creating “artificially cheap” opportunities for us to take advantage of…
Spot these glitches and you could see returns of 51%, 107%, and even 630% within 24 hours…*
*Past performance does not indicate future results
