Risk Management
What is the #1 goal of risk management?
Stay in the game / protect capital
What is revenge trading?
Trading to make money back instead of following a plan
Why is entering at a key level better than chasing price?
Better risk-to-reward and clearer invalidation
One options contract controls how many shares?
100 shares
What mistake happens when you “just want to be in the move”?
Chasing
If you risk 2% per trade, how many losses in a row would seriously damage your account?
A streak of losses compounds quickly — even 5–6 can hurt badly
What emotion causes you to enter too early?
FOMO
What does confirmation mean in an entry?
Price showing you it wants to move before you enter
What happens to options value as expiration approaches?
Time decay increases
What mistake is taking multiple trades without reviewing the first loss?
What is a kill switch?
A daily max loss where you stop trading completely
Why is boredom dangerous in trading?
It creates forced, low-quality trades
Why should stops be placed where your idea is invalidated, not where you “feel safe”?
Because emotions don’t define structure price does
Why are far OTM options risky for beginners?
Low probability + fast decay
What mistake is widening your stop mid-trade?
Breaking your plan / emotional trading
Why should beginners risk LESS, not more?
Because consistency > growth, and emotions are still untrained
What is overconfidence usually the result of?
A recent winning streak
Why do traders struggle with exits more than entries?
Fear and greed fight each other
Why do options move faster than shares?
Leverage
Why is copying another trader dangerous?
You don’t share their risk tolerance or plan
Why is focusing on R-multiples better than focusing on dollars?
It keeps decisions objective and removes emotional attachment to money
What mindset shift separates consistent traders from inconsistent ones?
Process over outcome
What is more important: a perfect entry or disciplined execution?
Disciplined execution
What matters more than strike price for day trading options?
Liquidity and volume
What is the most expensive mistake traders make long-term?
Not journaling and repeating the same errors