by Ted Nino
The <a href='http://www.weeklyoptionstrading.org'>Weekly Options</a> spread trade has two faces - and thankfully for us option traders, neither face belongs to Babs. But then again, it's almost just as bad (almost)
The first face is the one most new traders are introduced to. When the iron condor and the rookie option trader first meet - usually the picture that is painted of the iron condor is one of magnificence - grandeur - a wonderful, little known, very difficult to lose from investment secret that has been hidden from the general public by market makers who didn't want to let the cat out of the bag. A trade that requires just a few minutes per month to manage - that can kick off incredible returns of over ten percent per month, and on and on and on.
Of course, new option traders go gaga over this strategy - and who could blame them. It seems to be a trade that's almost too good to be real.
And sadly, sooner or later (mostly sooner) they discover that it IS too good to be true.
Kind of.
See here's the deal: The iron condor actually IS a pretty incredible trade. It CAN take very little time to manage. And it CAN produce some very consistent and truly outstanding and impressive returns.
The problem, is that what the rookie option trader WASN'T told upon first meeting the iron condor - is that the iron condor spread has a nasty side that shows it's face every so often. And it's nasty enough to completely destroy everything good that the 'good side' of the iron condor can provide.
It all boils down to the risk to reward ratio of these trades. They have a high probability of winning many small trades - but just ONE loss can completely DESTROY a trading account. And if the one trading these birds don't realize and fully understand this - and more importantly how to properly manage these trades and how to make effective iron condor adjustments - before long they will get creamed and blasted out of the market possibly with a huge, unrecoverable loss.
BUT - it doesn't have to be this way. The secret to success in trading this strategy is to simply be aware of the iron condor's potential danger - and then know how to correctly manage and adjust them so when those rare ugly months come along where the condor shows it's nasty side - we know exactly what to do and we have a plan in place to adjust our way out of danger. This is the MOST important thing to learn about trading this strategy: how to make proper <a href="http://www.youtube.com/watch?v=8j7JdysThY8">iron condor</a> adjustments. For long term reliable profits and consistent success - this is the KEY.
Although <a href="http://www.youtube.com/watch?v=8j7JdysThY8">iron condor</a> trading can be a nifty system to create passive gains, of course like any investment means there are likely dangers option traders should be cognizant of before jumping in. To find out more about how to appropriately trade this technique, go see this <a href='http://www.weeklyoptionstrading.org'>Weekly Options</a> website now.
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New Unique Article!
Title: Iron Condor - Scary Stuff
Author: Ted Nino
Email: theeinfoco@gmail.com
Keywords: iron condor,options trading,stock trading,stock,trading,forex trading,forex,currency trading,stock market,investing,investment,finance,personal finance,wealth building,business
Word Count: 479
Category: forex
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