Make Money Trading Options

Have you ever wondered why so many people lose money trading options, even when they think they know what they’re doing? In Make Money Trading Options: Short-Term Strategies for Beginners, veteran trader and author Michael Sincere exposes the traps that swallow new traders and reveals practical, tested methods to turn options trading into a disciplined, strategic endeavor—one where protecting your capital is just as important as making profits.

Sincere contends that the key to success in the options market isn’t about forecasting the future or finding a secret formula—it’s about managing risk, thinking like a scientist, and trading small until you know what works. The book’s central promise is simple: anyone can learn to make money trading options if they develop the right mindset, use verified strategies, and build habits of disciplined experimentation.

Why the Options Market Is a Dangerous Playground

Sincere begins by painting a vivid picture of the modern options market—a fast-moving, emotion-charged arena filled with seasoned professionals, powerful algorithms, and an endless stream of noise. Many newcomers, he warns, enter this world underprepared and overconfident. They believe that reading a few books or watching online tutorials equips them to compete with hedge funds and market makers armed with supercomputers. As he bluntly puts it, “You wouldn’t fly a plane after watching YouTube videos—you’d need real flight hours. Trading is no different.”

That’s where his teaching style stands out: rather than overwhelm you with abstract theories, he tells a story. In Part One, we meet Sam, a retired teacher who loses nearly a third of his savings in a single week because he breaks every rule of sound trading—trading too big, chasing hot tips, and letting emotions replace logic. Through Sam’s misadventures, Sincere turns complex trading principles into memorable lessons: set a plan, manage risk, ignore the hype, and protect your account before thinking about profits.

From Mistakes to Mastery: The Scientist’s Approach

Sincere redefines what it means to learn trading. Instead of gambling on luck, you become a scientist running experiments. You test hypotheses using a paper trading account—a risk-free simulation environment that lets you practice under real market conditions. “Think of the market as your laboratory,” he writes, “and your trades as experiments that reveal what works.” By treating each trade as data rather than drama, you remove ego and emotion from decisions.

This mindset precedes his signature strategy: the Test Trading Strategy. It’s a structured way to find “true winners”—stocks or ETFs that show consistent strength during the day—without risking real money. It teaches you to identify momentum, confirm direction, and only then commit to small trades. Sincere insists that this daily discipline develops instinct through observation, so when you do trade live capital, you’re reacting from training, not guesswork.

Why Risk Management Comes First

A recurring theme throughout the book is this warning: if you can’t manage risk, you can’t survive. Every strategy, chart, and indicator means nothing if you blow up your account. He emphasizes trading small—both in position size and total capital allocation—so losses are bearable. You’ll never eliminate risk, but you can control it. Protecting your money means you live to trade another day.

“Your first goal as a trader,” Sincere insists, “is not to make money—it’s to avoid losing it.” Once you internalize this paradox, you’ll trade with patience instead of panic.

A Toolkit for New and Intermediate Traders

The book moves from philosophy to practicality. You’ll learn how to set up a Watch List of high-quality, liquid stocks; use simulated trades to identify consistent winners; and apply behavioral analysis to read the market’s mood. In Stock Market Behavior Analysis, Sincere introduces intuitive patterns like the “Bullish Steamroller,” “Rocky Road,” and “Sideways Sucker”—memorable names for daily price behaviors that help you spot danger or opportunity long before indicators confirm it.

In later chapters, he builds on foundational skills with targeted methods—like trading SPY and QQQ, applying off-the-wall strategies such as the “long shot” or “countertrend” plays, and integrating basic technical tools like moving averages and RSI. Each strategy reinforces the same framework: observe, test, trade small, and act with discipline. The book’s final sections serve as a crash course for beginners on option mechanics, decoding technical signals, and applying historical wisdom from legendary trader Jesse Livermore.

Why This Matters

Sincere’s mission isn’t to sell certainty but to build competence. He wants you to stop gambling and start learning. By showing you how to recognize your psychological triggers—greed, fear, revenge trading—you gain control over your worst enemy: yourself. Through small-scale experimentation, journaling, and awareness, you turn chaotic markets into manageable systems.

Ultimately, Make Money Trading Options is about self-mastery as much as market mastery. It argues that success in options trading isn’t a destination but a practice—a disciplined pursuit of knowledge, pattern recognition, and emotional balance. Whether you’ve never traded or have lost thousands like Sam, Sincere’s conversational guidance gives you both realism and hope: the market will always be dangerous, but with preparation and patience, it can become your lifelong classroom rather than your downfall.

At the heart of Sincere’s teaching is a cautionary tale—“A Week in the Life of an Options Trader”. It chronicles five days in the trading life of Sam, a recently retired teacher who stumbles into the high-stakes world of options. His story is compelling because it’s painfully familiar: excitement turns to overconfidence, then panic, then ruin.

The Illusion of Easy Money

Sam begins as an eager beginner. With $150,000 in his IRA, he liquidates his safe investments and dives into options after hearing success stories. Like most novices, he’s drawn by potential, not process. His first trade—buying Apple calls before earnings—gives him a fleeting taste of profit. He equates a lucky win with skill, a fatal mistake that triggers the downward spiral. By the end of the first morning, Sam’s convinced he’s found the secret to quick riches.

The Domino Effect of Emotional Trading

Overconfidence turns to chaos. Watching market television for tips, acting on fear, and chasing momentum, Sam buys and sells randomly across Apple, Tesla, and SPY. He replaces strategy with emotion, buying puts when scared, calls when hopeful. He trades large positions because small ones feel meaningless—a classic gambler’s mindset. Each poor decision compounds the last.

By Friday, Sam has lost over 25% of his retirement account. The reader feels his devastation when he tosses his cracked iPad against the wall after Apple’s earnings drop. Yet Sam’s pain serves a pedagogical purpose—it distills years’ worth of mistakes into one unforgettable crash course. (In the tradition of financial educators like Mark Douglas in Trading in the Zone, Sincere leverages failure as the best teacher.)

Thirty-Three Lessons from Sam’s Failure

In Chapter Two, Sincere unpacks Sam’s fiasco into 33 distinct mistakes and their lessons. Each one maps directly to universal trading sins—no plan, poor risk control, emotional reactivity, misunderstanding volatility, taking tips, and trading retirement funds. The top takeaways include:

• Always trade small: use minimal capital until you’ve proven consistency.
• Never risk retirement funds or money you can’t afford to lose.
• Avoid high-emotion environments—turn off the financial news.
• Cut losses quickly; don’t add to losers hoping to recover.
• Learn basic technical analysis before pressing “Buy.”

Together, these lessons expose what most beginners get wrong: they think trading smart means finding the right stock, but in truth, it means managing yourself. Sam fails not because the market is cruel, but because he treats speculation like entertainment instead of disciplined work.

From Cautionary Tale to Curriculum

By dissecting each of Sam’s missteps, Sincere turns anecdote into instruction. He encourages readers to “touch the stove” in small ways—make mistakes with paper money to experience risk without devastation. This method transforms misfortune into memory. As readers absorb Sam’s pain, they internalize each lesson emotionally, not just intellectually.

“Your goal,” Sincere writes, “is not to avoid mistakes, but to make them small and learn from every one.”

Sam’s fictional losses thus become your tuition for real-world success. Sincere’s greatest insight is that good trading is less about prediction and more about restraint—knowing when to trade, how small to trade, and when to step aside entirely.

At the heart of Sincere’s practical approach is the Test Trading Strategy—a structured, low-risk system designed to help you identify winning stocks and timing opportunities before risking real money. It serves as a bridge between theory and experience, turning you from a spectator into a disciplined market observer.

Turning the Market into a Laboratory

Imagine betting on horses only after the race begins and you can see which ones are leading. That’s the metaphor Sincere uses to explain his strategy. By “test trading” stocks in a paper money account, you simulate buying shares early each trading day to observe which ones sustain momentum. You’re not gambling—you’re gathering evidence. Once patterns repeat, you move gradually to small real trades.

Sincere emphasizes setting up a daily routine. Thirty minutes before the market opens, you scan your Watch List (a curated list of 80–90 liquid, high-quality stocks) and identify any that are up by at least one point or one percent in premarket trading. You then place simulated market orders—buying 100 shares each of these candidates. As the day unfolds, you observe which stocks continue climbing (true winners) and which fade quickly. These repeating winners form your future trading targets.

The Power of the Probe

When simulated stocks earn virtual profits—typically $200–$300—you “probe” further by buying five call options on these same stocks (still on paper). If profits rise again, you probe a second time with another five calls. Once both probes succeed, you’ve identified a trend worth trading with real money. This step-by-step test mimics how legendary trader Jesse Livermore used “probing” to verify trends before betting big.

The idea isn’t perfection; it’s pattern recognition. The more you repeat this daily experiment, the better you become at sniffing out consistent movers. Over time, your brain builds intuition for momentum, volatility, and reversals—a skill no book or course can provide on theory alone.

The Psychology Behind Testing

By separating simulation from real money, you also separate learning from fear. Most traders fail not because they lack information, but because fear and greed hijack their decisions. The Test Trading Strategy acts like exposure therapy—it lets you experience the same patterns and pressures without destruction. That confidence later transfers to live trading.

“Never test your luck with real money,” Sincere reminds readers. “Test your strategy first, luck second.”

A System, Not a Shortcut

Unlike common “signal” services that promise instant profits, the Test Trading Strategy demands patience and data collection. It combines quantitative filtering (price and percentage moves) with qualitative judgment (trend strength, sustainability). It rewards consistency over excitement. And whether the market is bullish, bearish, or flat, it teaches you adaptability—because each pattern offers a different playbook.

In practice, this method builds endurance, discipline, and humility—the traits that make real traders survive. In the words of Sincere’s metaphor, “Every trade is a test tube. Treat it as an experiment, not a lottery ticket.” When you apply this mindset, you stop asking, “Will I win?” and start asking, “What will I learn?”—a shift that turns beginners into professionals.

Ultimately, the Test Trading Strategy is both a tool and a philosophy. It gives you a daily laboratory to test emotion, logic, and timing until they align. Once you consistently identify “true winners” in the virtual world, you’re ready for live trades—small, controlled, and disciplined. That progression, Sincere promises, is how ordinary people evolve into confident traders who thrive both in bull markets and during chaos.

Sincere’s concept of Stock Market Behavior Analysis transforms abstract charts into living organisms. Instead of viewing the market as a mathematical system, he treats it like a behavioral study—an arena of crowd psychology driven by emotion, momentum, and mass reaction.

Beyond Technical Analysis

Although technical analysis remains popular, Sincere argues it’s too often misused as a crutch. His alternative—Behavior Analysis—is a simpler, more intuitive tool for identifying market conditions quickly. Using one-minute charts, you look for recognizable patterns that mirror human crowd behavior. Each pattern gets a memorable name:

• Bullish Steamroller: a relentless uptrend that gathers speed through the day, signaling strong institutional buying.
• Bearish Steamroller: the opposite—a steady all-day decline that resists optimism.
• Rocky Road: a volatile, indecisive tug-of-war that punishes impatient traders.
• Sideways Sucker: a dull, narrow-range market that seduces traders into losing on small reversals.
• Spikes: sudden vertical surges up or down—opportunities or traps depending on timing.

By naming these patterns, Sincere makes market watching visual and emotional. You’re not reading lines on a chart—you’re diagnosing mood swings. When you identify a “Bullish Steamroller,” you know you can ride the wave. When you see a “Rocky Road,” you stay out. These heuristics distill years of observation into simple, memorable lessons anyone can apply daily.

Trading the Behavior, Not the Prediction

Instead of predicting where the market will go, you respond to how it’s behaving now. This behavioral lens saves you from fighting the trend—a mistake that destroys many traders. It’s similar to what Jesse Livermore observed a century ago: “The big money is made by sizing up the entire market and staying on the right side.”

Sincere also warns that no pattern is perfect; reversals, especially major “Failed Rallies” or “Failed Sell-Offs,” often occur after emotional extremes. Recognizing when enthusiasm or fear peaks helps you exit before trends flip. You learn to read the market the way a poker player reads opponents—not through prediction, but by recognizing tells.

Emotions vs. Logic

By focusing on behavior, Sincere gives traders permission to think like psychologists rather than prophets. You learn that markets have moods—greedy, fearful, bored—and that successful traders adjust their tactics accordingly. When everyone is euphoric, sell into their greed. When everyone panics, prepare to buy once the fear fades. Emotional awareness becomes your edge.

“If you can keep your head while all around are losing theirs,” Sincere paraphrases Kipling, “you’ll keep more than your money—you’ll keep your future.”

This framework simplifies the chaos. Instead of drowning in indicators, you identify context—Is the market trending, reversing, or stuck? Once you know the environment, you adapt your strategy, buying calls during a Bullish Steamroller or stepping aside during a Sideways Sucker. The outcome: fewer trades, better timing, and fewer emotional meltdowns.

When you’re ready to move beyond individual stocks, Sincere introduces you to two powerhouse ETFs: SPY and QQQ. These exchange-traded funds track the S&P 500 and the NASDAQ 100 and are ideal playgrounds for options traders because of their liquidity, tight bid-ask spreads, and predictable behavior.

Why Trade ETFs Instead of Individual Stocks?

Trading SPY and QQQ reduces single-company risk. Instead of relying on one stock’s news or earnings, you’re speculating on the overall market’s direction. Because ETFs are broad indexes, they move more smoothly and respond directly to macroeconomic shifts—Federal Reserve comments, inflation reports, or large institutional flows. For new traders, this stability makes execution simpler and emotions calmer.

Testing ETF Momentum

Using the same test trading principles, you begin every morning by buying five at-the-money SPY calls and five at-the-money QQQ calls in your paper account. These virtual trades reveal market direction within minutes. If both ETFs trend higher and your paper profits rise, you have immediate confirmation of a strong bullish environment.

Once confirmed, you consider buying a single real call—emphasis on one—and always use a limit order to avoid overpaying. Each trade reinforces fundamental habits: small risk, defined exits, and time stops. Sincere’s “Five-Minute Rule” ensures you recheck your data, chart, and emotions before pressing buy. The message is clear: preparation beats impulse.

Ten Trading Hints from an Options Veteran

• Always trade smaller than you think you should; fear disappears when exposure is manageable.
• Use time stops and loss limits—exit after a set window or amount rather than waiting for disaster.
• Never add to losing positions; averaging down turns traders into gamblers.
• Sell half when in doubt. Taking partial profits locks in gains and calms emotion.
• Avoid trading during chaotic mornings after major economic announcements.

Sincere calls trading SPY/QQQ a “training ground for discipline.” Because their movements reflect the collective behavior of thousands of stocks, you see the true pulse of investor psychology. When these ETFs align with your behavior models—say, during a Bullish Steamroller—you can trade confidently. When they diverge or show mixed signals, you stay out. That restraint, he insists, is the hallmark of maturity.

Learning to trade SPY and QQQ conditions you to manage expectations, timing, and ego. Once you can consistently handle these index-based trades with calm clarity, you’re prepared to tackle more volatile stocks—or simply keep making steady income trading the market itself.

Once you’ve mastered the basics, Sincere gives you permission to experiment—but wisely. In Off-the-Wall Option Strategies, he explores calculated risks: the long shot, countertrend trading, and simple hedges. These methods add nuance without encouraging recklessness.

The Allure of the Long Shot

Buying deep out-of-the-money options is like buying a lottery ticket with slightly better odds. You risk small sums (say, $300–$400) for the chance of thousand-percent gains. But you must treat these trades as rare experiments, not habits. When a market crash or explosive rally happens, these “lottery plays” can deliver windfalls. More often, they expire worthless. Their value is psychological—they remind you that big wins require small risks, not big bets.

Going Against the Herd: Countertrend Trades

Countertrend trading involves betting on reversals during “spike up” or “spike down” events. When euphoria or panic reach extremes, you fade the crowd. For instance, after a vertical morning rally (a “Spike Up”), you might test buy a small put if evidence shows exhaustion. But Sincere warns: these trades require surgical timing and should be rare. The rest of the time, follow the trend, not fight it.

Hedging and Simplicity

For more balanced traders, Sincere introduces a simple hedge—the High-Volatility Straddle. You buy a call and a put on the same stock before major news, expecting volatility. If the stock explodes in either direction, one leg pays off. Yet this works only when volatility is about to expand, not when it’s already high. Otherwise, both legs decay. It’s a tool for learning how volatility impacts option pricing more than a daily moneymaker.

Finally, he closes with the “Simple One-Stock Strategy.” The idea: focus on one strong, popular stock—like Amazon or Apple—and master its rhythm. By trading only one underlying asset repeatedly, you eliminate uncertainty and develop deep intuition. One of Sincere’s anecdotes describes an amateur who made a fortune trading only Amazon calls for four years, simply by following trends and respecting stop losses. Less variety, he concludes, often means more mastery.

Each of these strategies reinforces Sincere’s core principle: you earn the right to take risks only after proving discipline. Experimentation isn’t rebellion—it’s advanced learning through controlled exposure. These “off-the-wall” plays give trading creativity without abandoning caution.

Sincere ends his book on a historical note, retelling the story of Jesse Livermore—arguably the most famous trader in history. Livermore’s life, filled with fortune and tragedy, embodies both the glory and danger of speculation. For every $100 million he made (as in the 1929 crash), he lost it again through overconfidence and overexposure.

The Original Trader-Scientist

Livermore pioneered many of the very methods Sincere now teaches: probing with small trades, following trends, cutting losses, and respecting emotional discipline. He used “pyramiding” to add to winners and created rules for entries and exits before trading—centuries before systematic trading was formalized. Yet his downfall came from violating those same principles: plunging into large bets and letting ego overpower logic.

Sincere distills Livermore’s rules into the “Three P’s”: Pyramiding, Probing, and Plunging. The first two are excellent strategies—scaling into winners and testing ideas with small positions. The third, plunging all in, is deadly. The moral is clear: consistent success in trading isn’t about genius, it’s about humility.

Timeless Wisdom

Livermore taught that money isn’t made by predicting short-term fluctuations but by staying with big trends—the “big swing.” His famous line, quoted by Sincere, captures the essence of patience: “It was never my thinking that made the money, it was my sitting tight.” The challenge, both then and now, is human psychology. Knowing when to sit still requires detachment from greed and fear—the same emotional discipline that Sincere urges throughout his book.

Sincere positions Livermore not as a cautionary ghost but as a mentor. His triumphs show what’s possible through discipline; his failures warn what happens when you abandon rules. Together, they form a legacy that bridges early twentieth-century speculation with modern behavioral finance. The final takeaway: technology changes, but human behavior doesn’t. The trader who masters emotion, strategy, and risk will always stand apart.