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. If you don't you could get utterly destroyed by a big move in the market or the underlying and you wouldn't have a clue what to do. Just a couple of these can annihilate your account.
Another way of looking at the iron condor is to view it as a sold strangle with purchased wings on the outer edges for protection. The strangle trade is an option trade where the one who is putting the trade either buys or sells an out of the money put and call on either side where the stock being used is trading at. 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.
It's important to have a plan mapped out in advance for adjusting the iron condor you are trading because the risk/reward ratio of this options trading strategy could cause your to experience a loss far greater than your potential reward. The reason for this is because winning trades with the iron condor has a lot to do with discovering a successful approach that plays off the probability advantage that comes with this option strategy. A big move either way - or even just a move in the underlying that is larger than you were expecting - can have disastrous results on your trade and your profits.
Keys to success with trading the iron condor.
- Understand that there a various methods to adjust the iron condor. You do not need to follow any certain 'way' or methodology either. ?
- Protecting your profits and your account should always come first. ?
- 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. Keep in mind how important it is not to put at risk your gains and your trading account balance. Adjusting iron condors must be done according to one or more pre-planned strategies whenever the possibility for a large loss looms.
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. That all changed however when I learned this super easy method for trading the iron condor. After discovering the methods taught at this iron condor website, 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.
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Searching to find out more about how to trade iron condor, then visit www.ironcondoroptiontradingstrategy.com to observe the most fantastic free tools and training on iron condor .
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Category: Currency Trading
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Trading Iron Condor - Riding The Option Iron Condor Spread To Reap Option Paycheck
Category: Currency Trading
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