I'm a rule follower. I've written before about the need for clear-cut trading goals and specific trade plans. Perhaps it will surprise you, then, when I write that there's really no right or wrong in trading.

That's not quite true, of course. Letting losses grow too large is a clear-cut wrong path in trading. However, beyond that, few absolutes can be found in the trading world, whether it's in choosing a trading strategy or the way to manage that trade.

For example, let's consider overall trading plans that denote the type of trades in which a trader will engage. Most of you know that I currently trade mostly negative-vega/positive-theta trades such as butterflies and iron condors, with a far heavier concentration in iron condors. I've decided these trades are right for me and my long-term goals. However, if the Options Industry Council, the OIC, is right, these types of trades aren't necessarily preferable to a different long-term strategy, such as collared long-term investments.

The OIC's website is replete with studies touting the performances of several collaring strategies. The latest one was announced in a September 23, 2009 article. The results showed that over a 10-year period, a collaring strategy employing the Q's reduced risk over a buy-and-hold strategy by 65 percent. An outlined passive collar strategy "returned almost 150 percent, while the QQQ lost one-third of its value." An outlined active collar strategy "returned more than 200 percent," according to the OIC's article.

One isn't preferable to the other? Surely there's a clear choice? I'm afraid not. Those who choose to build wealth by trading butterflies, iron condors and other income-type strategies find that they suffer more angst during a sharp, persistent move such as the recent February sharp downturn than they do in a sideways move. However, their strategies can bring in as much income in downward-trending markets as up-trending ones or even sideways ones, as long as the trend isn't too sharp or prolonged and adequate adjustments are made. Those who invest long term via a collaring strategy will likely find that the strategy outperforms the market during sideways movements and also outperforms (maybe by losing less or perhaps by actually making money, depending on how sharp the move) during downturns. However, that strategy may underperform during strong and persistent bull markets by gaining less than a buy-and-hold strategy. See? No absolute right or wrong.

The investor employing a collaring strategy has a set-and-go type trade with adjustments sometimes made only once a month or even less frequently, depending on whether front- or back-month options are employed for the strategy. Stops can be set. It's possible to work, vacation or enjoy a retirement. However, this investor almost always has a presence in the markets. The income-style trader makes more adjustments but can elect to take two months off to enjoy off-season rates on cruise ships and tour the world.

While I would question the buy-and-hold strategy for my needs and personality, I can understand why some might choose the collaring strategy to meet long-term rather than short-term goals. I frequently advise friends and relatives who own long positions and whose personalities, tax requirements, skill sets or work schedules do not fit the parameters of an active income-style trader to ask their brokers or investment advisers whether collaring strategies might work for them. I do not advise them to take up my style of trading because it wouldn't be right for them.

That's because I know that my way is not the one right way, the shining superior path to a golden future. Income-style traders who do not carefully manage their losses will soon find themselves mired in quicksand.

The discussion can be extended to trade management styles. Trading by the Greeks sounds so erudite, but it isn't intellectually superior to trading by the signals provided by a moving average crossover. I recently listened to Jay Bailey, a mentor with the Sheridan Mentoring program, explain why he doesn't manage by the Greeks. He does keep track, he said, of what the Greeks might be. He uses the Greeks such as delta and theta levels to judge when his risk due to price movement might be growing too large. Perhaps that might be related to the way most of us would look at a profit/loss figure on our brokerage pages. However, he explained in a January 28 session that managing a large position by the Greeks requires managing the whole position at once. In contrast, he believes in putting on discrete positions such as iron condors and following an established trading plan for that iron condor. That allows one to maximize the potential of that particular trade by putting it on and taking it off at a particular time, he says.

When a trade is managed by the Greeks, it may eventually be difficult to determine what the position actually is, so I can understand Bailey's comment. I've never presented myself as an expert but rather as a sojourner with other option traders, inviting others to learn along with me. I'd certainly still list myself as nearer the beginner scale than the expert scale in managing trades by the Greeks, but the concept appeals to me. I'm likely to investigate it in coming months, perhaps in small-lot iron butterfly trades.

But is this type of trade management superior to another? I don't think so. It's easy to get tangled up. It may be harder to puzzle out the pieces of the trade and unwind it when it's either reached a preplanned maximum loss or reached the preplanned profit level. I'd previously traded 10 to 14-day iron butterflies that were a sort of no-touch speculative trade. They either worked or they didn't. If the expiration BE was approached, I exited and took my (usually small) loss. If the speculative butterflies worked, I took my profit. As long as my losses were kept at pre-set manageable levels, was this method inferior to managing a butterfly by the Greeks? Probably not. They were different trades entirely, set up differently with different goals, neither superior to the other.

Iron condor traders are presented with this "which method is right" decision, too, of course, when managing their trades. I adjust an iron condor according to the deltas of the sold strike, as many know. Others adjust according to how close the price of the underlying is to the sold strike. One isn't superior to the other. Some adjust early, and some don't adjust at all, either letting the thing work or fail if the sold strike is closely approached or hit. As I've discussed many times, the trader who adjusts early takes more frequent but smaller losses, and the one who adjusts late or just takes off the iron condor as the too-much-pain level is reached likely takes less frequent but far bigger losses. That bigger loss is just not right for me, for my temperament or my situation. It would undermine my confidence in myself as a trader too much. Others would feel the same about my adjust-early policy, feeling that the more frequent losses, even if smaller, undermine their ability to trade iron condors.

The right strategy and trade-management style for you is the one that fits the amount of time you have to devote to trading, the amount of cash in your trading account, and your specific needs. If you're 19, living at home and trading during the day before you gather up your books at 4:30 each afternoon and set off for your evening college classes, you're probably trading differently than this grandmother of five whose husband is retired. And I'm probably trading differently than the 45-year-old business owner whose work keeps him away from the trading screen during the day, so that trades must be set up each evening.

The various newsletters under the Option Investor umbrella offer a wealth of different style trades on different vehicles. Directional trades, covered calls, credit spreads, iron condors, trades on crude: they're all here. Diversification is offered both in the style of trade and the vehicles employed. Most of the writers are accessible via email.

If there's no one right way to trade options, that means that the ultimate choices are up to you. Investigate what's available on the site. If you read about something interesting, please don't plunge in with huge trades. Paper trade new strategies or familiar strategies on new vehicles or trade them in small lots. Do this until you've experienced a bad month and feel that you managed it well, either bringing in a profit or keeping losses small. Only then can you let yourself increase the size of your trades. Gradually, you'll discover what's right for you. When your lifestyle needs change or when market conditions change, you'll need to gravitate a different direction.

I was just writing about that to another trader. Previous to the last year, when it was time to adjust my iron condors, I bought a back-month long option to hedge and then I started stepping out of the contracts in thirds. Maybe prices would reverse while I was in that process and I wouldn't have to take the loss in all the contracts. If prices didn't reverse and I was eventually forced to step out of all the spreads that were in trouble, I was making some money on the hedge while I was stepping out of those contracts.

This last year, however, we've had different market conditions. The markets headed down sharply and then headed up just as sharply. Stepping out in thirds didn't work so well. I gravitated toward a different direction. When my adjustment levels were approached, I acted more decisively. I didn't hedge with a back-month option. I just took off the whole offending credit spread. I rolled it, either then or after waiting a day or so, depending on market conditions. The previous strategy had worked well in a choppy--even a violently choppy--market because prices could swing away as rapidly as they had swung toward my sold strike. But market conditions changed, so the one right way for me to adjust had to change, too.

It's not easy, this options trading business. Sorry, but it's not. However, it is do-able as long as you concentrate on risk and loss management and find the strategy and trade management style that fits your needs.