With limit orders, there's no guarantee that your order will be filled. But, if the market price meets (or even beats) your criteria, (e.g., "buy X option at $1), it means that if the option trades at 95 cents before it climbs to $1 while the order is active, then you will get into the trade at 95 cents. Sounds good, doesn't it? However, your trade will not be filled if the option never trades below $1.05 for the life of the order.

Skip Amateur Hour

One order type that I caution against in my ChangeWave Options Trader service is the "at-the-opening" order, which specifies that your trade is to be executed at the very start of the trading day…otherwise, it's canceled.

In the options industry, the first hour of trading is referred to as the "amateur hour" for good reason. If the market gets a running start on the day because some blue chip company exceeded earnings before the opening bell, you could end up paying a lot more for a "hot stock" that inevitably will cool off later in afternoon trading.

So, let's say that you want to get into that option trade at $1, but the trading range at the open is between $1.20 and $1.30. Not only will your order not be filled, but it will be canceled immediately because the price wasn't "right" at the open. (However, if that option opens between 95 cents and $1.05, then your order will be filled….)

At-the-opening-only orders are a lot like opening your wallet and saying, "Please take all my money!"

Eliminate Stress With a Sell-Stop

Along with any strategy you use, be sure to always implement a "sell stop." A sell stop order helps investors to avoid further losses or to protect a profit that exists if a stock price continues to drop. A stop order to sell is always placed below the current market price. So, no matter what happens with the trade once it's yours, mastering the trading game will feel more like a game and less like a stressful endeavor!

Schizophrenic–there's no other word for the market this year! Up and down and all-around–like a stomach-churning roller-coaster ride that never ends. And still, you realize that you've got to be in the game–in some form–if you want to reach your financial goals. At ChangeWave Options Trader, we track what the "smart money" is doing with my proprietary HeatSeeker technology...and trade right alongside for some very nice, and fast, profits.