There are two faces to the iron condor. And thankfully for all us Weekly Options traders - neither face belongs to Babs. However, on second thought - it might be even worse...
See, usually when new option traders first catch wind of the iron condor trade, they completely flip out - believing it's the greatest thing since sliced bread. I know I did. Once I wrapped my head around the method I simply couldn't believe such a trade existed and that no one had ever told me about this thing before. I was convinced this was a holy grail type trade that left very little possibility for losses. Heck, it was just like they all said - it was like being the casino. Just spend a few minutes every month slapping one of these things on and the let it sail to victory - month after month after month...
And so it goes with most new option traders who discover the iron condor. They fall completely in love with it - and having been there once myself, I certainly can't blame them. It's a magical trade that seems way too good to be true.
And there in lies the problem. It IS too good to be real.
Sort of.
See, the iron condor IS a magnificent trade - and it DOES take very little time to manage - and it CAN kick off outstanding returns.
BUT - and a big but here - what the gaga eyed option trader who is so head over heels in love with this trade doesn't yet realize - is that this strategy can get a nasty streak every now and then that if not properly handled can completely annihilate all those amazing returns our unsuspecting trader manage to rack up. And then some...
It all has to do with the iron condors risk to reward ratio - which can give off small win after small win after small win - hypnotizing us traders into complacency - then suddenly out of the blue (again, if you don't know how to make proper iron condor adjustments) smash us over the head with one huge loss utterly destroying our account.
But again - it doesn't have to go down this way. The iron condor can be tamed - and trained - to produce consistent and reliable monthly income - even through the occasional one or two tantrums and fits it might throw around every year. The key is to learn how to correctly manage these trades from the get go - from the day they get put on - AND - how to utilize the various iron condor adjustments that are available to keep these trades profitable and from getting out of hand in whatever market condition. Learning iron condor adjustments is the KEY.
See, usually when new option traders first catch wind of the iron condor trade, they completely flip out - believing it's the greatest thing since sliced bread. I know I did. Once I wrapped my head around the method I simply couldn't believe such a trade existed and that no one had ever told me about this thing before. I was convinced this was a holy grail type trade that left very little possibility for losses. Heck, it was just like they all said - it was like being the casino. Just spend a few minutes every month slapping one of these things on and the let it sail to victory - month after month after month...
And so it goes with most new option traders who discover the iron condor. They fall completely in love with it - and having been there once myself, I certainly can't blame them. It's a magical trade that seems way too good to be true.
And there in lies the problem. It IS too good to be real.
Sort of.
See, the iron condor IS a magnificent trade - and it DOES take very little time to manage - and it CAN kick off outstanding returns.
BUT - and a big but here - what the gaga eyed option trader who is so head over heels in love with this trade doesn't yet realize - is that this strategy can get a nasty streak every now and then that if not properly handled can completely annihilate all those amazing returns our unsuspecting trader manage to rack up. And then some...
It all has to do with the iron condors risk to reward ratio - which can give off small win after small win after small win - hypnotizing us traders into complacency - then suddenly out of the blue (again, if you don't know how to make proper iron condor adjustments) smash us over the head with one huge loss utterly destroying our account.
But again - it doesn't have to go down this way. The iron condor can be tamed - and trained - to produce consistent and reliable monthly income - even through the occasional one or two tantrums and fits it might throw around every year. The key is to learn how to correctly manage these trades from the get go - from the day they get put on - AND - how to utilize the various iron condor adjustments that are available to keep these trades profitable and from getting out of hand in whatever market condition. Learning iron condor adjustments is the KEY.
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To learn more about the iron condor system, go see this training site for tons of free training videos, samples, and tutorials on how to aptly put on, remove, handle and adjust the Weekly Options strategy to generate a steady monthly source of revenue.