I received this email from a reader this weekend:
Reading that post of your friend, my question is: I am a small trader — really small. I have tried Options rooms before but to no success. They either have you buying so many options of companies you’re bound to win some I guess. I really want to find a group and learn so I can at least make some money. I follow your partner JC and like his work. I guess what I am asking is: can a small trader make it trading options? Thanks for reading. Looking forward to your response…Have great weekend
Here is an expanded version of my response to this reader:
Thank you for reaching out.
“Make it” is a complicated question. It depends what your goal is.
If your goal is to start with a $5000 account and somehow make a living solely by your trading profits, it’s likely you’ll end in extreme frustration. And broke.
If your goal is to start small and consistently build a small portfolio into a larger portfolio without any need to siphon profits out of this account in order to pay your bills…then you have a chance. The key here is having other sources of income.
While I’ve been a trader for 20 years, in the occasions where trading was my ONLY income, I tended to struggle. It’s psychological for me. It’s emotional. I can’t really explain why I suck when everything depends on my trading, but I tend to. On the flip side, for most of my trading career, me and my wife had other jobs. This provided us with a safety net so that we knew, no matter how my trading performed, our bills would still get paid and we’d have food on the table. This is something that cannot be underestimated. This translates to better trading performance. It frees you up to focus on the process of executing a smart trading plan, instead of being influenced by the daily fluctuations of your P/L.
This might not have been the answer you were looking for, but I hope perhaps I gave you some food for thought?
Regarding finding groups to learn from, I’m not sure where you are located, but I would recommend going on meetup.com and looking for local groups in your area that are focused on trading or options. I live in the Denver metro area and there are several of them (one of which I run), and I’ve attended many functions (all are free!), met some amazing people, and learned a lot. You might too.