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If your options trading system doesnt consider some basic rules of technical analysis, you could be missing a lot of profitable options trades. An understanding of technical analysis really will help you remove some of the guess work out of trading. Thats because you wont be fighting the trend whenever you place your trades.

Its quite simple really. Its hard to argue about the direction of the trend if a bar chart is making higher tops and bottoms and the moving averages are rising. When you understand the trend, using put and call options to enter trades in the direction of that trend is like riding up an escalator. All you have to do is get on board and go with the flow.

But if your options trading system ignores technical analysis, and you are fighting the trend, it makes it harder to be consistently profitable, regardless of whether youre a buyer or a seller of options. Following a trend and understanding support and resistance can also allow you to enter positions in additional contracts in the direction of the trend as the price rises or falls. This lets you compound your profits with less risk than if you ignore technical analysis completely. Always remember - the trend is your friend, so thats the way you want to trade.

So does an options trading system that incorporates TA work all the time? Of course not, nothing does. You are going to lose on some trades because we can never know for sure what the market is going to do. Technical analysis points us towards probabilities and all we can do is make our decisions based on those.

The good thing about options is that we can always roll our contracts up, down or out in time if we need to, so if we are on the wrong side of a trade, we can change the strategy to suit. This is an important benefit, because it gives us more time to let the position become possible, rather than simply buying or selling a stock, where the profit or loss is locked in.

So what are your choices if youd like to become a profitable options trader, but youre not confident in your ability to pick the trend or good entry and exit points? An easy way to reduce the learning curve and get started quickly is to model a successful traders system and simply implement it for yourself. That means you could start trading profitably almost right away.

For many traders, it makes sense to let somebody else spend the hundreds of hours and thousands of dollars it takes to learn options an options trading system that makes money. Then all they have to do is follow the trades as they are announced and get on board.