In order to properly trade the iron condor, you need to have a game plan in place first regarding adjustments. Make sure you have this 'plan' all mapped out before you even start to ever even think about placing the trade. What if the market suddenly had a big move that was unexpected and put your account at risk? All it takes is one big move like this to completely drain out your options trading account.
This trade can also be looked upon as a strangle trade that has been sold only with added wings for protection. A "strangle" is where a trader buys an an out-of-the-money call as well as an out-of-the-money put option. Strangles' premiums are less than those of straddles due to the fact that the contracts are out of the money. This is basically just a call option spread up above where the stock is trading at, and a put option spread position down below where the underlying is trading at. Your paired positions are the condor's wings.
Since the iron condor strategy can deliver losses that far exceed the possible gains (due to the iron condors terrible risk to reward ratio) - it is vital that iron condor traders have a rock solid plan they can follow for when the unplanned move in the market occurs. This has a lot to do with being profitable with this trading strategy by playing the probabilities to your favor. Huge, unexpected movements in the market or the underlying you are trading can have real negative effects on your condor position and your trading account.
Steps to winning with the Iron Condor Option Strategy.
- Understand that there a various methods to adjust the iron condor. There are not any rules either that say you have to do so this way or that way.
- Always be protective of your profits with a conservative approach.
- Don't ever let a tiny loss grow into a big out of control loss.
- Don't get bored with taking small consistent wins.
Your key to success in trading this strategy is consistency in gaining profits. Don't forget that the most important thing is to keep your profits and your trading account safe at all times. Iron Condor adjustments should be used with your trade management plan when the potential for position losses present themselves.
I always used to make great monthly returns trading this strategy for a number of trading cycles in a row - but somehow always seemed to give it all up during the few volatile months that always seem to come along in a year. However, when I learned this ridiculously easy technique for trading the iron condor all that changed. After discovering my method, I now know exactly what to do when a problem month comes along to keep from losing the rest of my iron condor profits I've accumulated throughout the year.
This trade can also be looked upon as a strangle trade that has been sold only with added wings for protection. A "strangle" is where a trader buys an an out-of-the-money call as well as an out-of-the-money put option. Strangles' premiums are less than those of straddles due to the fact that the contracts are out of the money. This is basically just a call option spread up above where the stock is trading at, and a put option spread position down below where the underlying is trading at. Your paired positions are the condor's wings.
Since the iron condor strategy can deliver losses that far exceed the possible gains (due to the iron condors terrible risk to reward ratio) - it is vital that iron condor traders have a rock solid plan they can follow for when the unplanned move in the market occurs. This has a lot to do with being profitable with this trading strategy by playing the probabilities to your favor. Huge, unexpected movements in the market or the underlying you are trading can have real negative effects on your condor position and your trading account.
Steps to winning with the Iron Condor Option Strategy.
- Understand that there a various methods to adjust the iron condor. There are not any rules either that say you have to do so this way or that way.
- Always be protective of your profits with a conservative approach.
- Don't ever let a tiny loss grow into a big out of control loss.
- Don't get bored with taking small consistent wins.
Your key to success in trading this strategy is consistency in gaining profits. Don't forget that the most important thing is to keep your profits and your trading account safe at all times. Iron Condor adjustments should be used with your trade management plan when the potential for position losses present themselves.
I always used to make great monthly returns trading this strategy for a number of trading cycles in a row - but somehow always seemed to give it all up during the few volatile months that always seem to come along in a year. However, when I learned this ridiculously easy technique for trading the iron condor all that changed. After discovering my method, I now know exactly what to do when a problem month comes along to keep from losing the rest of my iron condor profits I've accumulated throughout the year.
About the Author:
To hear much more with reference to this style of trading see this web site. Be certain to watch the no cost instruction video and see the free of charge article here: http://www.ironcondoradjustments.com.
Ditulis oleh:
Unknown - Thursday, November 22, 2012
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