If you're going to trade the iron condor option strategy, then you must have a prepared strategy for adjusting iron condors. Make sure you have this 'plan' all mapped out before you even start to ever even think about placing the trade. The worst thing for you is to be wiped out by an unexpected large move in the index or underlying asset. Remember, the way that the iron condor is set up, with it's skewed risk to reward ratio, it could take a few of these - or maybe even just one - to utterly destroy your trading 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. Since the options that are being sold in a strangle play are much farther away from where the underlying is trading at than say in a straddle play - the amount of initial credit brought into the trade is much less as well. Many traders who use this strategy prefer to think of it as two credit spreads: a put spread below the market paired with a call spread above the market. Your paired positions are the condor's wings.
The reason it is so important to have a sound management plan in place before such a move is due to the risk to reward ratio that the iron condor strategy carries with it. This has a lot to do with being profitable with this trading strategy by playing the probabilities to your favor. 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.
Important Iron Condor Keys To Winning.
- Know that there are different ways for adjusting iron condors. There isn't a 'particular' way you you need to do so.
- Protecting your profits and your account should always come first.
- The last thing you want to do is let a small loss grow into a big loss.
- Be accepting (although not excited) about the fact of small losses and never let them beat you down.
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. When there is the potential for loss in you iron condor position, you must always have an adjustment plan ready to put into place.
When I first started trading this strategy, I would find myself making great returns month after month - only to then wind up giving back most of those returns during the 1 or 2 bad months that can occur throughout a normal year. When I came across this super simple way to trade the iron condor option trading strategy, that whole merry go round scenario changed and those crazy months stopped causing me so much trouble. 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.
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. Since the options that are being sold in a strangle play are much farther away from where the underlying is trading at than say in a straddle play - the amount of initial credit brought into the trade is much less as well. Many traders who use this strategy prefer to think of it as two credit spreads: a put spread below the market paired with a call spread above the market. Your paired positions are the condor's wings.
The reason it is so important to have a sound management plan in place before such a move is due to the risk to reward ratio that the iron condor strategy carries with it. This has a lot to do with being profitable with this trading strategy by playing the probabilities to your favor. 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.
Important Iron Condor Keys To Winning.
- Know that there are different ways for adjusting iron condors. There isn't a 'particular' way you you need to do so.
- Protecting your profits and your account should always come first.
- The last thing you want to do is let a small loss grow into a big loss.
- Be accepting (although not excited) about the fact of small losses and never let them beat you down.
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. When there is the potential for loss in you iron condor position, you must always have an adjustment plan ready to put into place.
When I first started trading this strategy, I would find myself making great returns month after month - only to then wind up giving back most of those returns during the 1 or 2 bad months that can occur throughout a normal year. When I came across this super simple way to trade the iron condor option trading strategy, that whole merry go round scenario changed and those crazy months stopped causing me so much trouble. 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 be taught more about how to trade iron condor, then visit www.ironcondoroptiontradingstrategy.com to encounter the most fantastic free tools and training on iron condor .
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