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TL;DR: The right options trading mindset is critical to success. Be prepared for whatever comes next, let go of trading mistakes, and cultivate a short-term memory.

If you’re like most people, your mindset can be easily influenced by news, other people’s biases, and your own past performance. This is completely natural. None of us can predict the future, yet it is the future that holds the keys to building wealth. As a result, we search for answers. We’ll listen to anyone who sounds credible, even if their allegiance lies elsewhere (website traffic, book sales, etc.).

Relying on others to be successful is not the key to building wealth. Your mindset is.

What options trading mindset do you need to be successful?

Being prepared for whatever comes next

Nothing gets your mind in the game better than being prepared. That means two things:

1. Knowing how to process information quickly and efficiently
2. Using the data to help you interpret where the market is moving

For instance, an overbought market can be sold at any moment without advanced warning. A drop of 1-2% on heavy volume could feel like the end of the world. If you are not paying attention, you will be caught off guard.

But if you are paying attention, you could be well positioned to buy the dip.

Remember, opportunities to add names are few and far between. In strong markets, the best trends barely give you a chance to get on board, but if you’re prepared you can capture it.

Letting go of mistakes

Your mindset cannot be positive if you’re constantly thinking about your mistakes. Trading is about probabilities, not perfection. If you’re stuck thinking about the trade that got away, you’re not ready for the next trade. Period.

Shrug off the losing trades and do something different next time.

When I play tennis, I like to say, “I never lose. I either win or I learn.” Same is true in options trading.

Cultivate a short term memory

Thinking about your last trade(s) can really mess with your mind. You could be on a hot winning streak, banking seven winners in a row. This could tempt you to be more aggressive on that next trade. Bad move!

Celebrate your wins, and then quickly move onto the next opportunity.

With the right mindset in place, the market (and the opportunities) will come to you.

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