Bullish or Bearish?
This step is directly related to option traders.
You will be getting into some slightly more advanced concepts-- what I consider the "meat and potatoes" of options trading.
If you never plan on trading options ever in your life, then just close this window and wait for the next step. You might want to scroll to the bottom first and pick up the free [pdf] just in case you change your mind.
Are you still here?
When you trade stocks, futures, forex, bonds, mutual funds and etfs.... you care about one thing:
Up or down?
That means you either are biased long or short, and you develop your system from there.
With options, your system will require an extra input: volatility.
So you need to be bullish or bearish on the stock.
And you need to be bullish or bearish on the volatility of the asset.
Price movement is based off two things: trend and volatility.
Trend is the average price change over time.
Volatility is price movement when we remove the trend from the equation.
Having an opinion on both is critical when trading options.
Your Cheat Sheet
From here, you can then start thinking about strategy selection. I won't get into the risks and reward of every single one, but instead provide you with a free pdf of my "Trade Decision Matrix."
This isn't comprehensive and there are plenty of other moving parts, but it's a good place to start.
If you want to keep going with this type of education, my option training course details many of these trading strategies, as well as the implicit risk, reward, and odds behind each one.
I'm not trying to sell you a silver bullet or the Next Big Thing that will guarantee profits.
But if you want the foundations to become a great options trader, my course will accomplish that for you.